Pharmacy Benefits With Rising Costs of Cancer Care

At the 2022 Oncology Clinical Pathways Congress, one topic of discussion was the rising costs of cancer care. Sibel Blau, MD, Medical Director at Northwest Medical Specialties, PLLC, presented “Pharmacy Benefits in Value-Based Pathways,” supported by James Gelfand, President of the ERISA Industry Committee (ERIC).

From 2013 to 2018, spending on drug costs doubled from $29.4 billion to $56.7 billion in the United States. One reason for this is the increased number of pharmacy benefit managers (PBMs), third-party administrators of prescription drug programs covered by a plan sponsor.

“We created the PBMs, we built them, and then we didn’t really create any rules for them, so they created their own rules,” Gelfand said. “A PBM has a profound effect on the care a patient receives. Those rules are not going to drive value for the patient. A PBM does not have a fiduciary duty to the patient. The PBMs’ fiduciary duties are to the stockholders.”

The growth of PBMs’ influence has had a direct result on skyrocketing drug costs, Dr Blau said. And PBMs exert a considerable influence on injectable biosimilars and intravenous chemotherapies.

“These high drug prices created this monstrous development in the last several years,” she said. “Revenues are so high, so incredibly lucrative, that PBMs continue to grow. Market share in 2018—you look at CVS Caremark, Express Scripts, OptumRX—they have huge market shares. They started exerting more influence into the injectables and intravenous chemotherapies as well. So there is more and more coming into our practices, as we providers are getting less and less powerful, and this is also shifting to the patients’ pockets.”

Local, independent oncology delivers high quality and lower costs in cancer clinics in patients’ neighborhoods, Dr Blau said. But there are challenges with PBMs, the variability with payers on choices of drugs and biosimilars, APM programs, and of course, drug pricing and margins. As such, she said, independent oncologists must deal with the paradox of drug margins vs value-based care.

“Drug pricing margin is always a fight,” she said. “People talk about this, we are incentivized by the margins. No, we have to have the margins to operate our clinics to be able to provide care so we don’t close our doors.”

Dr Blau is one of the founders of the Quality Cancer Care Alliance Network (QCCA), an organization of “fiercely independent” community oncology practices dedicated to leveraging their combined knowledge to improve clinical outcomes and the cancer care delivery system. Founded in 2015, the QCCA has grown and expanded, with the strategic goals of integrating and aggregating clinical data, research, value-based care, educational programs, and operational excellence. The QCCA now boasts one of the most complete community-based cancer data sets in the world, caring for more than 1.2 million patients.

“The core value here for a clinically integrated network was value-based care,” Dr Blau said. “How can we improve our efforts in our practices that are so nimble, so powerless when it comes to big resources that big institutions have, yet together we can actually strengthen it.”

QCCA’s leadership includes an array of experts in the field, such as Fred Schnell, MD, who serves as the Director of Clinical Integration for QCCA and spearheads a team focusing on value-based care pathways.

“The value-based care is not only on the pathways, but based on total cost of care,” Dr Blau added. “We have the preferred pathways, but the ‘fiercely independent’ means that the practices are still free to higher levels of compliance because their hands are tied right now with PBMs and payers.”

Health Economic Outcomes Research is also a key component in the QCCA’s recently established research network, known as Exigent.

“HEOR is so important,” Dr Blau said. “You can take the real-world data and information that comes from that, and that information changes the behavior. Value-based care includes research. Research is the most important because we have to be finding … the most economical ways.”

Gelfand followed Dr Blau to discuss ERIC’s mission of advocating for large employer plan sponsors. While the represented companies are wide ranging, they all have one thing in common—employee benefits.

“What we do for them, we lobby in Washington, DC, Capitol Hill, and the Administration to try to change the laws, change the rules to enable them to drive more value from their benefits program, specifically in their health benefits programs,” Gelfand said.

One of the topics of discussion in Washington is changing the rules for PBMs that would ultimately help payers and providers. Proposed legislative packages include transparency, spread pricing, rebates and discounts, fiduciary responsibility, bona fide fees, and compensation reporting.

“Congress is interested in PBM issues,” Gelfand said. “As someone who’s been working on this since 2018, I can tell you that the environment in Washington, DC, has changed quite a bit. You’ve already started to see some limited but promising proposals on PBMs move forward in Congress. You had a major piece of legislation pass the House of Representatives that included PBM transparency, and I do think that provision will become law by the end of the year.

“You can see there’s an awareness of things like this on Capitol Hill and the time is coming very soon, the rules for PBMs will be changed and it will be good for providers and patients and payers alike.”