Oncology Stakeholders Summit, Spring 2016 - Episode 17

Evidence Blocks: Patient Versus Societal Costs

Ira Klein, MD, MBA, FACP: To the point of acquisition costs and the cost of drugs, and why these entities have come out with these various tools, isn’t it true that in 2014, the rate of rise of drug costs was about 8% or 9%? And back in 2015, and all the years before that, it actually tracked with the overall medical cost rise—in the 3% to 4% range. The 2014 spike really had to do with more people being covered and a novel therapy set in hepatitis C.

We have these tools all coming out that Bruce is asking us to critique. It is kind of a knee-jerk [reaction] to a one-year aberration—it’s not a trend.

Ted Okon, MBA: If you look at the component cost of care—so, think about the pie chart and divvy that up in terms of drug, hospitalization, surgery, radiation, and radiology, and a lot of things—that actually is the largest growing component from 2004 to 2014, according to the Milliman study that was just released.

That component, both on the commercial side as well as the Medicare side, is the number one growing component. It’s grown over that period by over 300% to 400% on the commercial side. But, why it’s grown is because of the biologics. The biologics, which were a very small sliver, now incorporate a bigger piece of that.

The interesting thing is if you look at cancer costs on the commercial side or the Medicare side from 2004 to 2014, and you compare the rate of increase against sore throats and everything else, all patients, commercial and Medicare (according to that study), are essentially the same. Everybody thinks that cancer [cost] is growing by this huge amount. It doesn’t jive. The drug costs are growing and are as big of a component as is radiation; but hospitalizations, surgery, and some other things have actually decreased during that time period, or have grown at a lesser rate.

So that’s why, overall, when you say, “Oh, cancer care costs are doubling and tripling,” that may be [the case] on the drug side but, that specifically, [is the result] of new therapies. It doesn’t let you guys off the hook because there’s still a pricing issue; but, the fact of the matter is that, overall, the rise on both the Medicare and the commercial population is identical. This is sort of a landmark study that surprises people.

Michael Kolodziej, MD: Let’s not forget that the drug cost trend is mitigated by the introduction of generics into the marketplace.

Alan Balch, PhD: I’m totally going to blow that out of the water because I’m going to say one more thing about the Evidence Blocks. Directionally, it’s the right thing in terms of the usability of it, and is something that I think could facilitate (which is what it is designed to do) that conversation between the patient and provider.

It doesn’t get all the way there because of the input problem, and that’s not something NCCN (National Comprehensive Cancer Network) could charge themselves with solving. From an affordability perspective, it does try to capture other things besides the drug. The problem with it is it’s sort of asking a committee to hypothesize about how affordable it is from their perspective. It doesn’t have the same level of evidence and systematic approach that the other segments of the other Evidence Blocks have when it comes to consistency of evidence, quality of evidence, and safety and efficacy. But it’s a start.

From an affordability perspective, it’s looking at it more from that societal point of view—what is the cost to the system? And, again, from a patient perspective, just because you think it’s a 5, it may be very affordable to me. So I think that of all of those things, that’s the one that has the least utility right now from a patient perspective.