As Prospect of Risk for Doctors Looms, Cost Conversation Shifts in Cancer Care

Three years after Memorial Sloan Kettering Cancer Center refused to add Zaltrap to its formulary due to cost, value is part of the national conversation in cancer care. The new question is what will happen when physicians assume risk.

More than 3 years have passed since the famous episode at Memorial Sloan Kettering Cancer Center, when the pharmacy committee’s oncologists told Peter S. Bach, MD, MAPP, that they would not put the colorectal cancer drug Zaltrap on the hospital’s formulary. It cost twice as much as a similar drug and offered no real advantage. An op-ed that Bach wrote with 2 fellow physicians for The New York Times forced Zaltrap’s manufacturer to cut its price—and kicked off a national conversation about the cost of cancer drugs that continues to this day.

That discussion continued Friday when Bach joined the panel, “Reimbursement Challenges for Oncology Innovations: Who Pays?” which opened the second day of Patient-Centered Oncology Care 2015, presented by The American Journal of Managed Care in Baltimore, Maryland.

Taking part were S. Yousuf Zafar, MD, MHS, an oncologist and health services expert at Duke Cancer Institute who studies the cost of cancer care; John Fox, MD, MHA, senior medical director and associate vice president for medical affairs at Priority Health; and Dan Klein, MHS, president and CEO of the Patient Access Network Foundation, which helps patients fund copayments for expensive specialty therapies. Bruce Feinberg, DO, an oncologist and chief medical officer at Cardinal Health Specialty Solutions, served as moderator.

Since the Zaltrap episode, Bach has introduced the “Drug Abacus,” an online tool to help patients think about a drug’s value. Both the American Society of Clinical Oncology and the National Comprehensive Cancer Network have introduced value calculators. Discussions of cost, once off-limits for doctors, are considered essential when it’s clear that a six-figure therapy will only offer a weeks, perhaps months of life.

But that doesn’t mean that doctors enjoy having those conversations, Zafar said. “As an oncologist whose interested in value, I’m in a really interesting position,” he said, describing how he’s found himself in the clinic prescribing drugs he knows will offer marginal value.

When it comes to discussing cost and value of cancer drugs, Zafar said, “There’s two conversations.”

“First, you think about the value to society … we love the idea of performance-based coverage. But there’s that second discussion in the clinic, where I’ve got to put some that out of my mind as I discuss the cost to the patient.”

Like many other physicians, Zafar said, he finds himself having to address cost, “but we weren’t trained to do that. It’s our job to protect the patient from harm.”

The definition of “harm” is shifting, however. Zafar’s own research, and that of others, shows that cancer patients experience financial stress that leads to other problems, which can include poor adherence to oral therapies that they take at home.

Rules of the Market Don’t Apply

“I come from a market-oriented background, and for some period of time believed that we could get the market to function,” said Bach, as he started the discussion of what’s happened to cancer drug prices. “It doesn’t seem to be working out that way.”

He described how many have used the example of the different hepatitis C drugs—how Sovaldi came on the market at $1000 a pill, but once the drug had competition, pharmacy benefit managers were able to strike exclusivity deals to pay much less. That doesn’t really apply in cancer care, Bach said.

Drug development is advancing quickly, so substitutions aren’t always possible. And drugs that have been on the market for years keep rising in price. Bach cited the example of Gleevec, a standard treatment for forms of leukemia, which he said has gone up in price 5% each year, except for a one-time 2% drop when a competitor reached the market. When it comes to cancer therapy, he said, “We have too few purchasers and too few providers.”

Fox, the payer on the panel, introduced the idea of paying for outcomes. “We pay a lot of money for drugs that aren’t appropriate and don’t work,” he said. Payers would welcome relationships with drug manufacturers who would agree to prices based on whether the drug worked, not “whatever price they demand.”

What’s the Role of the Patient?

Feinberg asked whether patients are capable of taking an active role in shared decision-making about value. “Is it too much of a burden? he asked.

Klein said that a conversation about value implies there are high and low cost options, but that’s not always true. “In oncology or hepatitis C there aren’t always substitutions available, so it’s not a fair questions to ask,” he said.

Today, an “insured” patient typically still has plenty to pay out of pocket. The Affordable Care Act has given millions health coverage, but Klein said many with modest incomes also have high deductibles and co-insurance, and drugs in the specialty tiers can have high cost-sharing for cancer or hepatitis C.

The PAN Foundation exists because too many people could not gain access to innovative therapies, even with insurance. “PAN plays a role that no one else fills,” he said. Some have asked whether patients truly feel the burden when a charity helps pay part of their costs, but Klein says that’s absurd. “The deductibles and copays are so high it’s not even a question of a moral hazard anymore.” For a patient on Medicare earning 200% of the federal poverty line, they’re spending 15% of their income “just to get through the donut hole,” he said.

“Skin in the Game”

Fox wondered whether choices about therapies would change as reimbursement formulas shift, requiring physicians to assume more financial risk. “What decisions will physicians make when they have some skin in the game?”

Feinberg, and then Bach, raised the possibility that in some cases there might be an incentive to withhold therapy, just as some wonder if physicians have incentives to prescribe too much under the “buy and bill” formula that exists today.

Zafar said incentives and disincentives work today, but not always in the way people think. “I see it every day. The vast majority of the community oncologists are treating patients the way they need to be treated,” he said. There have been times when a community oncologist has referred a patient to Duke, because the small practice could not afford to cover an expensive medication a patient needed. Zafar has been told, “Duke’s going to cover it.”

If there’s more focus on what patients want, Fox said, he believes more attention will be paid to palliative care. “We need to understand what patients want, what families want, and eliminate what patients and families don’t want.”

Bach returned to a theme that set off the national conversation: the drug prices are simply too high. “Oncology is the only sector where the manufacturers set their own price,” he said.