This report shows that among people who are eligible for charitable assistance to cover out-of-pocket (OOP) prescription drug expenses, those with cancer have higher per-claim and per-person OOP costs than their counterparts with other health conditions.
The American Cancer Society estimates that about 1.7 million Americans will receive a cancer diagnosis in 2016, and about 596,000 people will die from cancer this year. Although these statistics may seem bleak, the United States has witnessed major reductions in cancer mortality in recent decades. The drop in cancer mortality is largely attributable to 3 factors: reductions in smoking, improvements in early detection (screening), and the availability of better cancer treatments. Together, these factors contributed to a 23% reduction in cancer mortality between 1991 and 2012.1
Given the marked improvements in cancer mortality—arguably the most important indication of progress in the fight against cancer—why do warnings about the threat of cancer to the public health seem to be increasing, rather than decreasing over time? One reason is the dramatic increase in patients’ out-of-pocket (OOP) cancer treatment costs that arise from several sources: insurance premiums, co-payments, coinsurance, deductibles, and tiered formularies. In addition to costs that are directly associated with care, indirect OOP costs add to the burden. These include factors such as lost income and travel expenses for both patients and caregivers. Despite the many sources of OOP costs for cancer patients, OOP costs for cancer medications have received the most attention, in part due to the marked increases in the cost of cancer drugs. National data show that retail expenditures on prescription cancer medications increased 5-fold in the decade between 2001 and 2011, from $2.0 billion to $10.0 billion.2
Increased spending on cancer drugs is driven by a combination of factors, including an aging US population and complex changes in the oncology drug development pipeline and marketplace. The latter involve:
Although these trends account for much of the recent increase in spending for cancer drugs, many of the medications that are involved in the debate over skyrocketing cancer drug costs are the same drugs that are responsible for marked improvements in cancer outcomes.3
It is against this complex backdrop that the increasing cost of cancer medications has received attention from the federal government,4 advocacy organizations,5 and professional societies.6 For patients, increased OOP costs associated with cancer medications directly impact financial well-being, especially among patients who have low incomes and those who are uninsured or underinsured. One high-profile study that analyzed data from 1995 to 2009 in Washington State showed that cancer patients had bankruptcy rates that were 2.65 times higher than people without cancer; a sobering reflection of the financial strain that a cancer diagnosis places on many families.7 A more recent study of financial hardship among people with cancer (borrowing money or going into debt, filing for bankruptcy, being unable to cover OOP costs, or making other financial sacrifices) showed that 20.4% of cancer survivors experienced 1 or more of these hardships. Among these individuals, 7.1% had to borrow money to pay for cancer treatment, 11.9% could not cover OOP cancer treatment expenses, and 9.4% made other financial sacrifices to deal with their cancer diagnosis.8 The growing literature on the financial impact of cancer leaves little debate concerning both the short- and long-term impact of this diagnosis among economically vulnerable patients and their families.
It is perhaps not surprising that the term “financial toxicity” has taken root to describe the consequence to patients who choose cancer treatments with high OOP.9 Although national data provide a glimpse into the characteristics of relatively small numbers of economically vulnerable cancer patients, overall, very little is known about these individuals—and there are few published data that exclusively focus on this group. Using a unique data source, the objective of our report is to provide an overview of this patient population.
DATA UTILIZED FOR CURRENT ANALYSIS
The Patient Access Network (PAN) Foundation is an independent, national 501(c)(3) organization that assists federally and commercially insured individuals living with chronic, lifethreatening, and rare diseases, with their OOP costs for prescribed medications.10 Patients who seek support from PAN must demonstrate eligibility by providing required information to a call center, or online through self-service portals on PAN’s website.11 During the application process, patients provide demographic and insurance information. Support is reserved for people whose household income is less than or equal to 400% or 500% of the federal poverty level (FPL). FPL is calculated based on reported total household income and the number of people living in the patient’s household. Once a patient is determined to be eligible for support from PAN, claims can be immediately submitted to PAN. Pharmacies, physician practices, and other entities that dispense prescriptions submit claims to PAN and are reimbursed for eligible patients’ OOP drug expenses. Claims that were filed by pharmacies are for self-administered prescription drugs that are covered under Medicare Part D, while physician-based claims are for Medicare Part B prescription drugs that are typically administered by physicians in a hospital or office setting. PAN maintains a database that details patient-level information on these claims.
PAN maintains a number of disease funds that provide support for OOP medication expenses for specific health conditions. Fluctuations in resources for these disease funds result in some year-to-year variability in which financial resources are available to support OOP medication expenses for specific conditions. Between 2011 and 2016, 84 funds provided support for OOP health expenses for distinct conditions, and of these, 33 provided support for various cancers.
This report presents descriptive data on trends over time in PAN’s support of OOP medication expenses for cancer patients. The analytic data set covers the period from January 1, 2011, through December 31, 2015. The variables of central interest included:
Patients with more than 1 diagnosis could access multiple disease funds, patients could have multiple claims in a given year, and patients could receive support over multiple years.
The analysis data set contains information for 834,819 patients who received support from PAN for OOP medication expenses between 2011 and 2015. Among these individuals, there were 2,917,524 claims, 80.6% of which originated from pharmacies and 14.2% from physician offices.
During the 5-year study period, there was a 13-fold increase in the number of individuals who received OOP support from PAN, and these numbers increased markedly for both cancerrelated and noncancer—related illnesses. In 2011, PAN provided support to 14,373 individuals for cancer-related OOP expenses, and the number rose to 159,130 in 2015 (). Overall, 41.6% of people who received support from PAN between 2011 and 2015 were patients with cancer who directed PAN support toward OOP expenses for their cancer drugs. Medicare was the primary source of insurance for 91% of patients with cancer who received support from PAN for their OOP drug costs, and there was a dramatic increase in the number of Medicare beneficiaries receiving OOP support for their cancer medications during the study period (): from 11,453 patients in 2011 to 275,481 patients in 2015.
The total number of claims for patients with cancer rose from 33,871 in 2011 to 572,407 in 2015—a 17-fold increase. Cancer medications accounted for 39% of the total number of claims during the study period ().
PAN provided $2.1 billion in support for OOP medication expenses between 2011 and 2015, with a sharp upward trend beginning in 2013. Support for cancer medications rose from $60 billion in 2011 to $542 billion in 2015 (). Although 39% of all claims between 2011 and 2015 were for cancer drugs, these claims accounted for 55% of all OOP financial support that PAN provided during this time. Throughout the study period, patients with cancer had higher OOP costs for their medications, both on a per-claim and a per-person basis ().
During the study period, the proportion of claims from patients with cancer to cover OOP medication expenses that originated from a pharmacy was lower than that of patients with other conditions (72.7% vs 85.7%, respectively); interestingly, the proportion of the pharmacy claims increased steadily over time—from 39.9% in 2011 to 76.4% in 2015 (). Although the average number of pharmacy claims was lower throughout the study period among patients with cancer compared with their counterparts with other health conditions (2.4 vs 3.1 claims), the average number of pharmacy claims among patients with cancer rose steadily during this time while pharmacy claims increased less dramatically among patients without cancer ().
Increasingly, large numbers of economically vulnerable patients are utilizing charitable assistance to cover their OOP medication expenses. Recognizing this trend, PAN convened a roundtable in February 2016 to explore the challenges imposed by cost sharing on patients and families. The roundtable covered a variety of topics, including the special circumstances faced by those diagnosed with cancer. These patients, along with their families, must often choose between access-ing the life-saving benefits of the newest treatments, and the financial ruin that results from the OOP expenses that come with this access.12
New research among Medicare beneficiaries—the group that receives the vast majority of charitable assistance from PAN—demonstrates the link between high cost sharing and access to effective cancer treatment.13 The new report shows that among beneficiaries who were newly diagnosed with chronic myeloid leukemia (CML), those with low cost sharing (less than or equal to $5 throughout the year) were more likely than those with high cost sharing (greater than $2600 per fill) to initiate therapy with oral tyrosine kinase inhibitors, a new class of targeted cancer therapy that offers most CML patients the opportunity to enjoy a near normal life span.14 The latter report puts CML patients’ OOP costs into sharp focus, and offers appropriate context for the data presented in the current report, which describe all cancer patients who received charitable assistance for OOP medication costs over a recent 5-year period.
In 2011, PAN provided charitable assistance for OOP medication expenses to 14,373 cancer patients who were at or below 500% of the FPL. This number had risen to nearly 160,000 in 2015, and in that year, patients received more than $542 million to cover the OOP costs of their medications. These findings, along with the observation that OOP drug costs were higher for patients with cancer than for their counterparts with other health conditions, provide further evidence concerning the financial hardship faced by those being treated for cancer.
In 2015, less than half (40.5%) of the individuals who received charitable assistance from PAN to cover their OOP drug costs had cancer, yet their claims accounted for more than half (52.2%) of all funds that were disbursed that year. It was, therefore, not surprising that OOP medication costs for patients with cancer were higher on both a per-claim and perpatient basis compared with patients with other conditions, and these trends were evident throughout the 5 years of our study. Our data—which reflect the experience of an especially vulnerable segment of the patient population—demonstrate that OOP costs for drugs have a disproportionate impact on cancer patients relative to economically challenged people with other health problems. Our findings are consistent with a growing body of literature that focuses on the financial toxicity of a cancer diagnosis, and the specific role that is played by OOP drug costs among cancer patients.1,15,16 Our data also show that the per-patient annual cost of OOP support for cancer drugs was considerably higher than the same support for non-cancer drugs, and this gap increased during the 5 years between 2011 and 2015. This finding suggests that the “financial burden gap” is increasing among patients with cancer— even those who are economically vulnerable enough to be eligible for charitable assistance for their OOP medication costs.
Although the vast majority of claims for charitable support to cover OOP costs for cancer medications is currently directed at pharmacy claims, the proportion of these claims has risen steadily—from 39.9% of all claims in 2011 to 76.4% of claims in 2015. We observed a parallel increase in the average number of pharmacy claims per cancer patient during this time—0.94 claims per patient in 2011 to 2.7 claims per patient in 2015. As expected, the shift toward increasing pharmacy claims was accompanied by a corresponding decrease in the proportion of cancer drug claims originating from physician offices. This pattern likely reflects a relative increase in utilization of new oral medications and a relative decrease in chemotherapies that are typically administered in hospital- or office-based settings. These cancer-specific trends were also discussed during our recent Cost-Sharing Roundtable.12 Our findings are consistent with the rapid approval of new oral cancer medications that are dispensed from pharmacies. Of the 21 oncolyticdrugs that were approved in 2015, 12 were oral formulations. As of June, 2016, 3 of the 5 drugs that have been approved for cancer are oral medications.17
Cost sharing has far-reaching implications concerning the connection between access and health. A report from the Robert Wood Johnson Foundation found that increased cost sharing was associated with adverse health outcomes for vulnerable populations including the elderly, chronically ill, and those on public assistance programs.18 Cost sharing creates a 2-class system with respect to pharmaceutical access. People who can afford their OOP drug costs can access the full spectrum of health benefits from recent advances in biotechnology and drug development, whereas those with insufficient resources to cover their OOP drug costs must settle for medications that may be less effective than newer options; alternatively, patients may have to forgo the medications altogether.
PAN’s database of individuals who meet income-based criteria for receipt of charitable assistance with their OOP drug costs provides an opportunity to understand trends in the need and disposition of this assistance in large samples of economically vulnerable patients. These data show that the number of charitable grants to assist with OOP cancer treatment costs has increased dramatically, and that OOP costs for drugs have a disproportionate impact on people with cancer. Helaine E. Resnick PhD, MPH, is president, Resnick, Chodorow and Associates, Silver Spring, MD.
Bruce Barth is manager of Data Analytics and Reporting, Patient Access Network Foundation, Washington, DC.
Daniel Klein, MHS, is president and chief executive officer, Patient Access Network Foundation, Washington, DC.