Smarter Oncology Management Needed as Costs Continue to Climb

With oncology now the largest cost center for health plans, experts at the Academy of Managed Care Pharmacy (AMCP) 2026 meeting in Nashville, Tennessee, urged payers to rethink cancer care management as new therapies, longer treatment durations, and fragmented oversight drive unsustainable spending.¹

The Case for Smarter Oncology Management Strategies

Beth Isaac, PharmD, senior vice president of clinical success and strategy at OncoHealth, kicked off the session, “Mind the Gap: Rethinking Oncology Management Before It’s Too Late,” by advocating for more robust oncology management since oncology is now the top spend category for most health plans. Specifically, cancer drugs account for between 50% and 60% of total cancer spend and continue to increase year after year.

Isaac noted that cost is driven by various factors, including more FDA approvals and label expansions. Other drivers include longer treatment duration, increased use of combination regimens, and earlier-line use of expensive therapies, such as bispecifics and chimeric antigen receptor T-cell therapies. She added that 80% of oncologists feel overwhelmed by the rapid changes, underscoring the need for stronger oncology management.

“This is why oncology management is not only needed but, in my experience so far, really helpful in guiding providers towards that evidence-based medicine and decisions, ensuring that we're treating the right patient with the right drug but at the right time,” Isaac said.

With these advancements, treatment regimens have shifted from being covered solely under the medical benefits to spanning both medical and pharmacy benefits. However, reviews often remain fragmented across stakeholders, which can lead to overlapping toxicities and a higher total cost of care. She argued for a holistic, cross-benefit utilization management model that evaluates entire protocols rather than individual drugs.

Traditional utilization management teams are often composed of non-specialists. However, Isaac noted that using oncologists, oncology-certified nurses, and board-certified oncology pharmacists (BCOPs) improves decision-making and peer-to-peer conversations while reducing denials, appeals, and administrative burden. This is especially important as high-cost pipeline therapies, particularly in breast and bladder cancers, are expected to add further pressure.

With this new model, she suggested reframing the core utilization management question from “does this drug meet medical necessity?” to “does this intervention deliver value across the care continuum?”

Isaac next summarized a McKinsey & Company analysis, which demonstrated the potential of value-based care models.² The analysis suggested that between $50 and $60 billion could be saved through value-based specialty care. This approach prioritizes patient outcomes and overall value rather than single-drug decisions, taking a more holistic view of the patient journey and treatment impact.¹ While it is conceptually straightforward, Isaac emphasized that, operationally, it is very complex.

“The idea makes sense: care based on outcomes and value vs a singular drug protocol or episode of care, but this requires trust, partnership, and alignment across stakeholders, and, ultimately, a willingness to change the model,” Isaac concluded.

Soft Steering Offers a New Path to Oncology Savings

Adam Hoye-Simek, PharmD, RPh, pharmacy director at Devoted Health Plan, followed up by introducing soft steering as a strategy to reduce oncology drug spend. He explained that payers face many constraints, including continuity-of-care rules and limited cost visibility for prescribers, which make traditional cost control difficult.

One solution is soft steering, also known as lower-cost alternative programs, which works within these constraints by identifying lower-net-cost, clinically equivalent alternatives and encouraging voluntary switching. It aims to reduce spend while preserving provider choice, with no denials or hard-step therapy.

Hoye-Simek noted that there are 5 steps to running a soft steering program, the first being to identify opportunities at the population level. With this step, pharmacists flag drugs or drug classes where a cheaper, clinically similar alternative exists. Next comes actuarial validation, where actuaries model net cost, including rebates, risk adjustment, and reinsurance, to confirm real savings.

The third step is clinical review at the patient level, in which clinicians ensure the suggested switch is safe and appropriate, with no prior failures or contraindications. After that comes outreach, when technicians and pharmacists contact providers, members, and/or pharmacies with the alternative option. The fifth and final step is to monitor conversions, meaning stakeholders track which switches occur and address any issues that may have emerged.

He highlighted typical soft-steering targets in oncology, including brand-to-generic switches when possible and formulation changes when one has a lower net-total cost. Others include dose/vial optimization and bio-rounding to reduce waste, as well as switching from a reference biologic to a biosimilar.

Hoye-Simek added that organizations can either build these programs internally or partner with vendors. Although using a vendor comes with faster startup and existing infrastructure, the organizations pay a margin, a third party touches their members, and they still must validate that their opportunities match their formulary and financials.

In contrast, with an internal build, organizations have full control, and all savings are retained. However, he noted that it requires significant staff and time to design, pilot, and scale the model.

“You still do all the actuarial work,” Hoye-Simek concluded. “The pilot to scale lifetime can take a little bit longer, depending on how fast your organization is.”

Site-of-Care Redirection as a Tool for Oncology Cost Management

Kelly Romo, PharmD, BCOP, manager of oncology medical drug management and customer initiatives at Blue Cross Blue Shield of Michigan (BCBSM), then shifted to hard steering as a strategy to manage oncology costs by mandating site-of-care shifts for certain infused therapies.

The program aims to move appropriate treatments from higher-cost hospital outpatient settings to lower-cost alternatives, such as home infusion, physician offices, or ambulatory infusion centers.

Romo shared implementation examples of hard steering from BCBSM but noted that it is a regional plan, so its solutions may not apply to all organizations. The initiative was launched in 2022 with a limited set of immunotherapies. It was rolled out in phases, first to health maintenance organization members, then to preferred provider organization populations after operational refinements.

To ease transitions, existing patients were temporarily grandfathered. She explained that exceptions are routinely made for pediatric cases, complex combination regimens, and access barriers such as rural geography or unsuitable home settings.

Romo emphasized that drug selection prioritizes safety, broad availability, and meaningful cost savings, with the program now encompassing dozens of therapies, including biosimilars. Extensive prelaunch planning, including geomapping and early provider and member communication, helped maintain access without increasing travel burden.

While initial provider resistance was strong, she noted that ongoing engagement and adjusted contracting strategies improved adoption; many patients reported having positive experiences, particularly with home infusion.

Operationally, Romo highlighted that the program requires close monitoring, including case-by-case reviews and attention to reimbursement dynamics, especially for biosimilars. Flexibility is also needed for out-of-state members and evolving care scenarios.

“Sometimes, we have to work with [out-of-state] providers to maybe allow [patients] an exception, or maybe we have to work with them to find a location where they can be administered,” Romo said. “Having those open conversations with providers out of state is really important.”

Beyond the site of care, Romo next highlighted additional strategies to manage oncology utilization. For checkpoint inhibitors, approaches include enforcing evidence-based treatment durations and applying indication-specific management to address overuse.

Meanwhile, the growing availability of subcutaneous formulations is reshaping care delivery by significantly reducing administration time and often lowering infusion-related reactions. She highlighted that adoption of these alternatives is increasing, though payer decisions remain dependent on total cost, including drug pricing, administration resources, and future biosimilar competition.

Together, Isaac, Hoye-Simek, and Romo stressed that as oncology costs continue to rise, health plans must adopt smarter utilization management, steering strategies, and value-based care models to control spend without compromising care quality.

References

1. Hoye-Simek A, Isaac B, Romo K, Bobolts LR. Mind the gap: rethinking oncology management before it’s too late. Presented at: AMCP 2026; April 13-16, 2026; Nashville, TN.
2. Kunte A, Patel A, Abou-Atme Z, Flynn A. Specialty risk: The next frontier of value-based care. McKinsey & Company. July 22, 2025. Accessed April 16, 2026. https://www.mckinsey.com/industries/healthcare/our-insights/specialty-risk-the-next-frontier-of-value-based-care