Clinical Progress and Coverage Policies in Immuno-Oncology - Episode 21
Michael Kolodziej, MD: As we think about the value, to a health plan, of these novel therapies, it’s most appropriate to think about the total cost of care. But there’s an illusion that you can price your agent whatever you want, as long as you win in the total-cost-of-care model. Let me tell you why that’s an illusion: if your sticker price is $150,000—and before you introduce your drug, the total cost of care is $120,000—you cannot save your way to prosperity. It does not work; the math simply doesn’t work.
Now, the real question is, do we cure people? Because all bets are off if we cure people, right? So, then we have to start thinking about cost of care over a much longer horizon, as opposed to how much it costs in the next year. This changes the discussion altogether. Do we like the idea that people are not going to be hospitalized for symptoms of disease or toxicity of traditional therapy? You betcha. I think every health plan, every doctor, likes that idea a lot. But to argue that there are adequate cost offsets, certainly based on what we know about efficacy today, it’s really hard to make that argument.
I think everybody should be concerned a little bit about the potential impact of alternative payment models, where physicians are held at risk for total cost of care, particularly if drugs are included, because of the temptation to undertreat if you make the decision that an expensive therapy is not in your budget. There is a straightforward solution to that, and the straightforward solution is to remove the cost of the therapeutic from the episode, but to still identify appropriate use through, for example, a clinical pathways program or something akin to that. That way, you take care of the under-treatment challenge, use evidence-based care, provide a construct for clinical decision making, provide a construct for collecting real-world evidence, and don’t punish the doctor for making the right decision. I think we’ve got to go in a direction like that because otherwise, patients are the losers and we don’t want to do that.