Precision Drug Utilization Management: The Future of Oncology Medication Management

J Clin Pathways. 2022;8(5):16-17. doi:10.25270/jcp.2022.6.4

In 2020, the national costs for cancer care in the United States increased from an estimated $190.2 billion in 2015 to $208.9 billion and is expected to rise to $246 billion by 2030.^1,2 This rise in costs is due in part to the following confounding factors, including a growing number of people surviving cancer (nearly 17 million cancer survivors in 2020), an aging population, population growth, and advances in therapies and care.² 

This exponential spending growth in oncology has resulted in myriad utilization management strategies by both payers and providers to control costs, especially drug costs. Drug utilization management (DUM), while prevalent in the nononcology space since the early 1990s, has not been a major practice in oncology until recently due to the complexity of the oncology treatment landscape. In 1995, spending for oncology medications made up only 3% of the total drug expenditure in the United States. That number climbed to 15% in 2020.³ With this increased oncology spending, there is now a priority to use DUM strategies to help curtail costs without adversely impacting patient quality and outcomes and standardizing treatment where appropriate. 

Current DUM strategies include prior authorization, step therapy, drug quantity supply limitations, member cost sharing, closed specialty pharmacy networks, formulary tiering, and adjusted drug reimbursement to lower expenditures.⁴ Emerging DUM strategies to further curtail costs include the use of pathways and guidelines, the extensive use of exclusion lists, implementing value-based contracts, and the implementation of second specialty tiering in Medicare, which includes splitting specialty drugs between a nonpreferred specialty tier and a preferred specialty tier with the preferred tier carrying lower cost-sharing obligations than the nonpreferred tier.⁵ Some organizations are even going a step further in the management of drug costs and care by leveraging data from electronic health records (EHRs), advanced analytics, and artificial intelligence to identify variations in treatment patterns among clinicians for the same cancer type and gaining insights into therapies that are yielding the best outcomes at the lowest cost.⁶ Other factors that have contributed to the focus on DUM include practice consolidations, hospital acquisitions, evolution of the reimbursement system including value-based options, and payer cancer sophistication. 

HOW ARE DUM PRACTICES BEING USED IN THE REAL WORLD?

Institution-Payer Alignment

An example of a very dynamic marketplace with both payer and provider consolidation is Pittsburgh, Pennsylvania, where Highmark is the predominant payer in the area. University of Pittsburgh Medical Center (UPMC) is the predominant provider group. This mega group was formed in the mid-1990s when a largest private practice group in Pittsburgh and the UPMC oncology department merged. In this market structure, both the payer and the provider have a dominant position with UPMC developing internal pathways that support both provider- and payer-driven choice. Incentivizing the marketplace to develop payer policies to align with provider prescribing preferences allows for equal distribution of payer and provider power.

Regional Provider Power

The state of Florida represents regional provider dominance with Florida Cancer Specialists (FCS) and Moffitt Cancer Center regionally controlling separate market spaces. Each organization has chosen different paths in developing DUM tools and processes. Moffitt has developed an internal pathway program that is driven by their individual cancer teams and integrated with their oncology pharmacy and therapeutics (P&T) committee. This allows the organization to keep up with the latest cancer treatment while monitoring the clinical and economic value to the patient. FCS have taken a different approach with an EHR-based system utilizing formulary and treatment plans to drive practice efficiency and patient outcomes. The system is driven by input from their internal P&T committee, which determines preferences for specific drugs and treatment plans. This platform allows them to align with commercial payers as they seek adequate reimbursement for appropriate patient care. With the dynamic nature of the practice acquisition market, influence is in constant motion, and with that, regional power shifts continue to occur.

Commercial Payer and Health System Dominance

Commercial payer dominance has morphed with the advent of pharmacy benefit managers (PBMs) and the first formulary exclusions in 2011. Oncology drugs were not involved in these exclusion lists until 2014. Between 2014 and 2020, 63 oncology, hematologic, and antineoplastic/immunosuppressant medicines were excluded from at least 1 or more of the 3 most well-known PBMs: CVS Caremark, Express Scripts, and OptumRx. This accounted for 6.7% of all formulary exclusions. Of these 63 drugs, 38 of them were single-source medications with no direct alternatives. Excluding these medications substantially increases out-of-pocket costs for patients with plans that include deductibles or coinsurance and does not account for any rebates or discounts received by the PBMs.⁷ Recent oral drug entries are shifting a portion of this dominance back to the provider by restricting access from PBMs and encouraging local dispensing from medically integrated pharmacies and dispensaries. In addition to exclusion lists, some payers and health systems are leveraging analytics to determine which therapies should be on formulary and part of pathway programs. For example, Meridian Health and their analytics partner COTA, in partnership with Blue Cross Blue Shield of New Jersey, created the “lanes of care” in breast cancer, which are predetermined sets of treatment protocols developed based on a 3-year review of breast cancer patients and various data points and methods of treatment. Lanes with similar results were then evaluated on their cost-effectiveness. This resulted in reducing variations in breast cancer treatment, improved outcomes, and lower overall costs.⁸ Other organizations such as CVS Health, Flatiron, Kaiser Permanente, and many others are increasingly leveraging data analytics in similar ways.

Large Oncology Practice With Purchased or Independent DUM Practices

In an effort to adhere to value-based models such as the Oncology Care Model (OCM) and other value-based payer contracts, providers have moved to developing and maintaining pathways, treatment plans, and formularies of their own accord.  The US Oncology Network is one of the leading conglomerates of community-based provider networks. US Oncology, a McKesson-owned company, develops and maintains value pathways powered by the National Comprehensive Cancer Network (NCCN). These pathways are developed and reviewed by key opinion leaders within each disease state. Practices both within and outside of the US Oncology Network can then navigate these pathways to standardize treatment decisions and reduce costs. Furthermore, practices can add depth to these pathways by incentivizing pathway adherence with predetermined goals and report card readouts. ClinicalPath provides this same type of pathways program that other leading oncology centers of excellence use to navigate the ever-changing and challenging world of oncology treatment strategy.

But who wins out when both payer and provider have pathways, especially when those pathways do not align? How does the decision effect cost to the provider and to the patient? These questions start to pinpoint the importance of payer-provider alignment and the importance of relationships across the health care spectrum.

These examples demonstrate the various paths and strategies payers, health systems, and provider groups are taking to address cancer care spending and costs, which in turn impact provider drug treatment choice and decisions. Although formularies and EHRs can manage what is available to be prescribed, pathways offer management precision by cancer type and lines of therapy. As products and treatments are recognized to be interchangeable due to similar clinical outcomes and mechanisms of action, providers are and will continue to be encouraged to select the most appropriate therapies—accounting for clinical considerations, cost, and other factors. Drug preferences and restrictions will also be based on factors such as experience with the drug, ease of use, and payer/provider influence. This will eventually result in certain treatments being excluded or relegated to a line of therapy that sequences the treatment after similar but preferred options.

IMPACT

As a result of these current and emerging DUM strategies, pharmaceutical companies will need to align their clinical and economic value propositions with the decision makers’ criteria such that their treatment is available to be prescribed by the provider within the chosen system type (pathways, treatment plans, and formularies) and that it is optimally positioned. Are there unique patient populations the regimen serves due to either efficacy or safety? Are there economic rationales due to acquisition costs, cost recovery, or total cost of care that differentiate value? Do the decision makers have experience with the treatment and adequately understand the value proposition vs competing treatments?

The continued developments in precision medicine, new therapies, and new technologies and their increasing costs, combined with the growth of the aging US population, will continue to put pressure on budgets for cancer care. Providers and payers will therefore continue to find ways to achieve value, delivering quality care within budgetary constraints, leveraging increasingly sophisticated DUM strategies in their approaches to help achieve these goals. Thus, pharmaceutical companies will be tasked now more than ever with the responsibility to demonstrate how their products and treatments will be part of the solution to help manage cancer care for patients, providers, and payers if they do not want to be sidelined in this evolving quest for value-based care! 

References

1. National Cancer Institute. Financial burden of cancer care. National Institutes of Health website. Updated April 2022. Accessed May 12, 2022. https://progressreport.cancer.gov/after/economic_burden

2. Cavallo J. National cost of cancer care in the United States expected to Rise to $246 billion by 2030. ASCO Post website. Updated June 30, 2020. Accessed May 12, 2022. https://ascopost.com/news/june-2020/national-cost-of-cancer-care-in-the-united-states-expected-to-rise-to-over-246-billion-by-2030

3. Lindhorst J. The evolution of the oncology pharmacy. Pharmacy Times website. February 2022. Accessed May 12, 2022. https://www.pharmacytimes.com/view/the-evolution-of-the-oncology-pharmacy

4. Rosenberg J. Utilization management in oncology: current strategies and a path forward. American Journal of Managed Care website. Accessed June 7, 2022. https://www.ajmc.com/view/utilization-management-in-oncology-current-strategies-and-a-path-forward

5. CMS.gov. Changes to Medicare Advantage and Part D will provide better coverage, more access and improved transparency for Medicare beneficiaries. Published January 15, 2021. Accessed May 12, 2022. https://www.cms.gov/newsroom/press-releases/changes-medicare-advantage-and-part-d-will-provide-better-coverage-more-access-and-improved

6. Caffrey M. Use of COTA Nodal Address highlights variance in cancer care cost: an interview with Donald M. Berwick, MD, MPP. American Journal of Managed Care website. Published February 2021. Accessed May 12, 2022. https://www.ajmc.com/view/use-of-cota-nodal-address-highlights-variance-in-cancer-care-cost-an-interview-with-donald-m-berwick-md-mpp 

7. Xcenda. Skyrocketing growth in PBM formulary exclusions raises concerns about patient access. Xcenda website. Published September 2020. Accessed May 12, 2022. https://www.xcenda.com/-/media/assets/xcenda/english/content-assets/white-papers-issue-briefs-studies-pdf/xcenda_pbm_exclusion_whitepaper_9-20.pdf 

8. Morse S. Physicians build bundled payments system for breast cancer. Healthcare IT News website. Published January 22, 2018. Accessed May 12, 2022. https://www.healthcareitnews.com/news/physicians-build-bundled-payments-system-breast-cancer