Oncology Drugs Dominate Medical Benefit Spend

Across commercial insurance, Medicare, and Medicaid populations, oncology is the top category of spend, and the drug pipeline has increasing specific and complex therapies.

Oncology is a safe bet as the top spend category for the next few years, said Sneha Sharma, PharmD, director, specialty clinical solutions, Magellan Rx, said in Las Vegas during the Asembia Specialty Pharmacy Summit, held May 2-5.

During her presentation, Sharma ran through the trends in the commercial, Medicare, and Medicaid populations, and oncology was the top spend category in all 3. Starting with commercial, she noted that oncology trends approximately 15% higher in per-member per-month (PMPM) spend than other categories.

“This keeps in line with the trend that oncology is becoming its own entity,” Sharma said.

The top 5 categories of spend in commercial were oncology, biologic drugs for autoimmune disorders (BDAIDs; eg, Crohn disease, ulcerative colitis), multiple sclerosis, ophthalmic injections, and asthma/chronic obstructive pulmonary disease.

Overall, the top 5 categories made up 70% of the medical benefit PMPM, with oncology making up 46% on its own.

In the Medicare population, oncology is again the top spend and utilization category, and the PMPM between oncology and all other therapies differs by as much as 35%. The COVID-19 lockdowns and stay-at-home orders had a bigger impact on oncology claims in this population compared with the commercial population, Sharma noted.

The top 5 categories of spend in Medicare were oncology, followed by ophthalmic injections, hematology, bone resorption inhibitors, and BDAIDs. These 5 categories made up 80% of the medical benefit PMPM, with oncology making up 59% alone.

Finally, looking at the Medicaid space, Sharma noted the varying patient trends and needs. “With the influx of unemployment and economic upheaval that we saw due to COVID, Medicaid saw some large increases in their medical benefit PMPM spend at about a 7% increase in PMPM,” she said.

There was a little variation in the top 5 categories of spend, although oncology was still at the top. The other 4 were BDAIDs, rare diseases, multiple sclerosis, and immune globulin. These top 5 categories made up 62% of the medical benefit PMPM, and oncology made up 37% alone.

Sharma noted that while there were variabilities across lines of business, oncology was the exception. However, oncology utilization was down 4.8% in commercial, 9.3% in Medicare, and 13.8% in Medicaid compared with prepandemic levels in 2019.

Looking ahead at the drug pipeline, Sharma focused on gene therapies and oncology drugs because these categories will continue to drive spend. “Payers are most concerned with the trend in oncology and impact of gene therapy,” she said. “These 2 high-cost, high-impact categories have robust pipelines and unique management requirements.”

Among the drugs she highlighted in the pipeline were:

  • Betibeglogene autotemcel to treat transfusion-dependent beta-thalassemia and sickle cell disease. This intravenous (IV) drug has a Prescription Drug User Fee Act (PDUFA) date of August 19, 2022, and the cost could be $1.8 million.
  • Fidanacogene elaparvovec to treat hemophilia B. While there are hemophilia drugs on the market, this is a gene therapy, and it treats a rarer form of hemophilia. The drug is also delivered intravenously. The pivotal trial concludes May 2022, with results expected in the first quarter of 2023.
  • Trastuzumab biosimilar to treat HER2-positive breast cancer, metastatic gastric cancer, or gastroesophageal junction adenocarcinoma. This IV administered drug has an expected approval timeline of the third quarter 2022. There has been a new trastuzumab biosimilar approval every 1 to 2 years, Sharma said, and “it's very exciting to have more choices.”
  • Tecliztamab to treat relapsed or refractory multiple myeloma. This off-the-shelf B-cell maturation antigen is delivered intravenously and is being evaluated as both a monotherapy and in combination therapy, and the preliminary results indicate it may have a substantial improvement on at least 1 end point over current therapy, Sharma said.

“Drugs within our gene therapy and oncology pipelines are becoming more specific, somewhat complicated, and fulfilling needs in patient populations where standard nonspecific therapies or no therapies have existed,” Sharma said. “We must continue to evaluate and manage these trends with programs that we know are working or continue to find informative strategies for high-cost specialty drugs.”