Health Policy Check Up News

Three Current Oncology Conversations

According to the Centers for Medicare and Medicaid Innovation (CMS Innovation Center) “cancer diagnoses comprise some of the most common and devastating diseases in the United States: more than 1.6 million people and diagnosed with cancer each year in this country.” Of this statistic, the American Cancer Society estimates 595,690 will die this year. While these trends show us that more work is needed to improve patient outcomes in this disease state, it is encouraging to see increased conversations in both the news and policy realm about the need to confront this challenge and arrive at a positive solution. In recognizing the Specialty Pharmacy Times’ annual oncology edition, I thought it would be appropriate to examine three of the latest policy conversations involving oncology.

The first conversation involves cost containment. CMS surprised the industry with its March announcement of its Medicare Part B Payment Model otherwise known as the Part B demo. In this demo, CMS proposed a “two phase model that would test whether alternative drug payment designs will lead to a reduction in Medicare expenditures, while preserving or enhancing the quality of care provided to Medicare beneficiaries. The first phase would involve changing the 6 percent add-on to Average Sales Price (ASP) that we use to make drug payments under Part B to 2.5 percent plus a flat fee. The second phase would implement value based purchasing tools similar to those employed by commercial health plans, pharmacy benefit managers, hospitals and other entities that manage health benefits and drug utilization.” Physicians in phase 1 will be placed in groups based on their zip codes and will receive a flat fee of $16.80. Phase 2 is expected to limit a patient’s out of pocket cost sharing; however; details on this needs to be expanded on. If finalized, the model is expected to last five years.

The demo was a result of discussions that stemmed from the Medicare Payment Advisory Commission’s (MedPAC) investigation into physician reimbursement for oncology drugs. The Commission who is a nonpartisan legislative agency that provides Congress with policy recommendations on Medicare examined the ASP plus 6% model and were skeptical as they believed physicians could make more money by administering the more expensive product that may or may not have an improved effect on the patient’s outcome over the lower-priced drug.

While many groups have come out in opposition to the demo, Avalere has published a report that finds that the proposed Medicare payment changes for physician-administered drugs would reduce reimbursement for those that cost more than $480 per day in 2016. The analysis also shows that seven of the 10 drugs that constitute the largest reduction in reimbursement are used to treat cancer. Meanwhile, some primary care physicians, who tend to use lower cost drugs, would be paid more. At this point, it is unclear whether prescribers will be incentivized to fall in line with the goals of the demoand how this CMS proposal will coincide with the agency’s own five-year Oncology Care Model that will invest in physician-led practices who care for patients receiving chemotherapy.

The second policy conversation centers on the impact of waste. According to a March 2016 study titled Overspending driven by oversized single dose vials of cancer drugs, researchers at Memorial Sloan Kettering Cancer Center estimate that there is nearly $3 billion in wasted oncology medications. The study which analyzed the profits of drug manufacturers, oncology physicians and hospitals, examined the top 20 drugs for multiple cancer types packaged in single dose vials and for which the dose is dependent on the patient’s weight. “Based on the available vial sizes in the U.S., the researchers estimated that makers of those 20 drugs this year will receive an extra $1.84 billion from charges for unused medicine, or about 10 percent of their expected U.S. sales. Insurers and cancer patients will pay at least another $1 billion on unused medicine in 2016, based on the markups hospitals and doctors charge over a vial’s price every time they infuse patients with those cancer drugs, the researchers concluded.” The problem lies in the packages oftentimes containing more medication than patients need. While the obvious call to many is to require manufacturers to produce cancer drugs in different vial sizes, policy concerns such as scheduling for distribution to patients, as well as storage and handling requirements for oncology drugs that are biologics (products engineered from living cells compared to a chemically composed pills) remain.

The aforementioned report did not go unnoticed in the policy realm. Shortly after the release of the report, Senators Amy Klobuchar (D-MN) and Jeanne Shaheen (D-NH) wrote a letter to Food and Drug (FDA) Commissioner Dr. Robert Califf urging the FDA to examine the dosage size of cancer drugs. On the state level, while several state legislatures have for years attempted to create drug return, reuse and recycling laws, Washington state this spring has enacted legislation which seems to find a workable solution to cancer drug waste. HB 2458 was recently enacted and effective January 1, 2017, will allow cancer patients to donate their unused drugs to people in need that may not be able to financially afford it. The legislation could simultaneously reduce costs and improve patient outcomes.

The last policy conversation centers on one of many innovative policy solutions. Vice President Joe Biden (D-DE) has been personally invested in finding a cure for cancer as during recent budget negotiations, he lobbied for an increase in appropriations in cancer research funding as part of his pledge to find a “moonshot” to end cancer. During President Obama’s last State of the Union address, the President officially tasked the Vice President with overseeing his moonshot goal. With his last year in office as Vice President, Mr. Biden will be working to find federal funding to help in gene sequencing as well as trying to develop a data sharing program for researchers to communicate on different therapies.

Moonshot 2020 whose official name is the National Immunotherapy Coalition is a coalition being led by Patrick Soon-Shiong who is bringing together academia, insurers and competing drug and biotech manufacturers together to combine several immunotherapy treatments to overwhelm cancer cells rather than having these companies work in isolation. The plan is to make 60 novel and approved cancer therapies and enable rapid testing of new combination protocols.

According to the Coalition, the initiative aims to explore a new paradigm in cancer care by initiating randomized Phase II trials in patients at all stages in 20 tumor types in 20,000 patients within the next 36 months. All 20,000 patients will have their tumors genetically sequenced, and the plan is to create a patient registry where drug makers can search for specific patients that fit their trial criteria. These findings will inform Phase III trials and the aspirational moonshot to develop an effective vaccine-based immunotherapy to combat cancer by 2020.

In conclusion, these aforementioned policy discussions are a sample of many that are occurring in the United States as we look for out of the box thinking to confront the growing challenges within oncology. The road ahead is never smooth, but I like many take solace in the fact that the answer lies in the continued and tireless cooperation of government, academia and private enterprise. Contact us for more information.