Managed Care’s Role in Oncology

Minneapolis—In recent years, pharmaceutical companies have developed numerous expensive oncology drugs to stabilize patients with cancer, a trend expected to continue throughout this decade. Although the majority of products are covered under the medical benefit, the increasing use of oral therapies has shifted more of the drugs and costs into the pharmacy benefit. With growing oncology-related costs and debates surrounding the value of some oncology drugs, payers are adopting techniques used in other chronic diseases, such as diabetes, hypertension, and asthma. These new approaches to oncology benefits management and suggestions for improving them were discussed during a satellite symposium at the AMCP meeting titled The Evolving Oncology Pharmacy Paradigm: Emerging Strategies for Managed Care Professionals. David H. Vesole, MD, PhD, codirector of Hackensack University Medical Center’s Myeloma Division in New Jersey, began the session with an overview of multiple myeloma (MM), a cancer of the plasma cells in the bone marrow. There are 2 types of MM: 15% of patients have asymptomatic myeloma and 85% have symptomatic myeloma. In the United States, 60,000 people have MM. The median age is 71 years. Each year, there are an additional 20,500 cases of MM as well as 11,000 MM-related deaths. African Americans are twice as likely to have MM, whereas the ratio of females to males with MM is 3 to 2. “It’s a relatively rare disorder, but this is a disease increasing in numbers,” Dr. Vesole said. Dr. Vesole spoke about MM treatment guidelines from the National Comprehensive Cancer Network and the American Society of Clinical Oncology as well as the US Food and Drug Administration (FDA)-approved drugs intended to treat MM. In 1962, the FDA approved melphalan, but the organization did not approve another MM drug until May 2003 (bortezomib for patients with relapsed MM). Since, the FDA has approved thalidomide (used in combination with dexamethasone); lenalidomide (also used with dexamethasone); pegylated liposomal doxorubicin (used with bortezomib); and bortezomib for patients with newly diagnosed MM. During his presentation, Dr. Vesole discussed numerous recent trials involving the FDA-approved drugs. Although he said there are conflicting data and challenges in interpreting data, Dr. Vesole found that patients taking the new drugs are more likely to have complete remission, which used to be rare for those who did not undergo a transplant. “We do have the ability to get complete remission,” Dr. Vesole said. “But we still have a long way to go [to improve treatment].” David G. Frame, PharmD, hematology/oncology and bone marrow transplant clinical specialist at the University of Michigan health system, followed with a discussion of oncology pharmacy management. According to the National Cancer Institute, 11.7 million people in the United States have cancer, with 60% ≥65 years of age. In addition, 67% of adult cancer patients will be alive in 5 years and >77% of children with cancer will be alive in 10 years. The economic burden of cancer is also costly, according to Dr. Frame. In 2008, the American Cancer Society estimated the total cost at $228.1 billion, of which $93.2 billion was direct medical costs, $18.8 billion was indirect morbidity costs, and $116.1 billion was indirect mortality costs. Dr. Frame said that 5 of every 1000 health plan enrollees are diagnosed with cancer each year. Many oncology therapies cost between $5000 and $10,000 per month, and oncology pharmacy is the third largest specialty pharmacy category behind multiple sclerosis and rheumatoid arthritis. According to Dr. Frame, cancer therapies could become the most expensive specialty pharmacy category in the next few years because of the large number of oncology drugs in the pipeline. For instance, he said there are 8 molecules in phase 2 or phase 3 trials intended to treat MM. Dr. Frame cited the April 2010 Express Scripts drug trend report that indicated the average per member per month (PMPM) cost of oncology therapies was $21.58 in 2010. The PMPM is expected to increase to $33.50 in 2012 and $70 in 2016. In traditional oncology pharmacy management, a physician bought the chemotherapeutic products, stored the drugs, administered them in the office, billed the payer directly, and received reimbursement based on the drug’s average wholesale price (AWP). The cancer therapies were provided in the medical benefit. Since Medicare’s decision in 2005 to use the average sales price (ASP) instead of AWP, many payers now reimburse based on the ASP, which is 49% lower than AWP, according to Dr. Frame. He also said the ASP normally does not cover the physicians’ or pharmacists’ costs, so payers have been shifting the costs to patients via copays and coinsurance. In addition, oral cancer therapies are now normally covered under the pharmacy benefit, and higher-cost cancer drugs are placed in a higher tier on the formulary. C. Daniel Mullins, PhD, professor in the University of Maryland School of Pharmacy’s Pharmaceutical Health Services Research Department, followed by addressing techniques managed care organizations utilize to determine cost-effectiveness and survival in MM treatments. Payers normally consider oncology’s value proposition different from other diseases, according to Dr. Mullins. The cost-effectiveness threshold is higher for cancer therapies ($100,000 per quality-adjusted life-year [QALY]) compared with most other therapies ($50,000 per QALY). Dr. Mullins also said there were 2 areas of wasteful spending: treating when there is no benefit and treating beyond benefit. Cancer treatments are also expensive. Dr. Mullins cited a financial model used in a 2007 Blood article that compared the costs of selected MM therapies. The researchers found that bortezomib had a total cost of $33,829, a combination of bortezomib and doxorubicin cost $47,929, a combination of lenalidomide and dexamethasone cost $71,672, and a combination of thalidomide and dexamethasone cost $46,588. A major issue for payers is that there is a lack of useful data related to oncology therapies, according to Dr. Mullins. He said many of the trials that are frequently cited are not randomized, contain selection bias, and do not include patient-reported outcomes. Thus, he said patients do not know what therapies are most effective and safe; oncologists do not have access to therapies supported by strong evidence; and payers make coverage and reimbursement decisions based on poor evidence. Jeffrey D. Dunn, PharmD, MBA, formulary and contract manager for SelectHealth, Inc, followed with an explanation of how managed care professionals can utilize better oncology pharmacy management processes. Whereas people used to rarely question the price and value of oncology treatments, cancer therapies are now being closely scrutinized and are subject to more strict payment reforms and quality measures, he said. According to Dr. Dunn, health plans are typically designed to manage costs through restricting utilization of resources and having independent medical and pharmacy designs. They also use cost-sharing to influence utilization. Although benefit designs for many disease categories are shifting coverage from the medical to the pharmacy benefit, plans have been reluctant to implement the changes in oncology, according to Dr. Dunn. In coming years, though, he believes plans will utilize more copay and coinsurance models and specialty tiers for oncology medications. However, according to Dr. Dunn’s research, patient cost-sharing has not effectively cut costs in oncology care. For instance, a study showed that unless patient out-of-pocket costs are uncapped, coinsurance did not affect the plan’s sponsor costs. Another trial found that when out-of-pocket costs reach $1000, patient adherence declines, although Dr. Dunn said there is little evidence that high out-of-pocket costs lead to poor outcomes. “We need better ways to address the costs [of oncology therapies],” Dr. Dunn said. When considering how to improve their oncology pharmacy management, plans should consider several options, according to Dr. Dunn, including incentive programs for members as well as providers, integrating specialty pharmacy, utilizing data management and information technology, and implementing case management techniques and patient support programs. Dr. Dunn suggested a value-based approach, which some employer plan sponsors have already applied. Value-based designs focus on achieving better outcomes through medication adherence and compliance with treatment management. Dr. Dunn cited a report from the Center for Health Value Innovation that said value-based designs utilize data and technology to improve health, productivity, quality, and financial trends. According to Dr. Dunn, plans can achieve improved results by waiving or reducing patients’ out-of-pocket costs; providing evidence-based preventive care, services, and products; promoting medication adherence for chronic conditions; and incentivizing patients to use a specific provider or service. “The key [to value-based design] is technology,” Dr. Dunn said. “Hopefully we see a better return on investment. In theory, [value-based designs] are a great idea.” The Patient Protection and Affordable Care Act also includes several provisions aimed at giving healthcare professionals more data and more information to improve care and cut unnecessary costs. For instance, the bill allocated >$1 billion for comparative effectiveness research (CER) that Dr. Dunn said would provide more information about clinical guidelines, provider reimbursement, coverage decisions, and cost-sharing. However, Dr. Dunn said many CER programs do not include cost comparisons, which are necessary to make informed decisions. “We have a long way to go to understand [CER],” Dr. Dunn said. Dr. Dunn predicted that in the next few years, there would also be a shift from fee-for-service payment to fee-for-outcomes payment and that providers would be compensated through pay-for-performance models based on quality and outcomes measurements. Although Dr. Dunn said oncology pharmacy would play a major role in the future, challenges exist with limited outcomes data, ethical concerns, and limited resources. Dr. Dunn said collaboration among providers, plans, and employers is the key to implementing new benefit designs and that managed care can help bring all of the stakeholders together. The oncology designs should include biosimilars and expensive specialty therapies, according to Dr. Dunn. “Oncology’s tough,” Dr. Dunn said. “We have limited outcomes data, and it’s an emotional disease state.… [Oncology pharmacy] will be a huge issue for patients and plans going forward. We’re going to need to be more financially responsible than ever before.”