Oncology Market Access in 2018 from Health-System Perspectives
Although the future of cancer care appears bright, there is significant concern on the part of payers, patients, and providers on the relative value of these novel and emerging treatments. As therapies continue to become more innovative, approaches to treatment and contracting for these agents may need to become more innovative as well. Research continues to focus on smaller patient populations and there has been a noticeable shift from large-volume cancers to small-volume/niche tumor populations.
Personalized medicine has led to a stratification of patient types based on their unique cancer biomarkers. As new therapies become available for these patients, the life cycle of existing products continues to shrink. With combination treatments, costs may continue to grow even as outcomes improve. Within the United States, the availability of new therapies, the use of combination treatments, and the resulting longer lifespans have been significant cost drivers.
However, the question remains as to whether the costs justify a modest improvement in overall survival (OS) or progression-free survival (PFS), which are 2 of the most common metrics used to assess response to cancer treatment. In a recent article by Pauwels et al, these questions were reviewed in greater detail. The study authors conducted interviews with representatives of 13 pharmaceutical companies and 2 pharmaceutical industry groups. When asked about clinical value, one interviewee stated:
This statement begs the question as to who should be involved in price setting and clinical value. In a perfect world, each country and its health care system carefully balances budgets, price, and perceived value. Pharmaceutical companies, providers, and payers all want the same thing, which is improved health and reduced morbidity and mortality. Pharmaceutical companies must also make a profit. Marketing authorization requires a partnership to assess the value of a product and set a price commensurate with disease state costs and profit.
Payers have often responded, outside of a partnership model, by shifting cost to the member in an effort to defray spending, often relying on patient assistance and other cost-sharing programs. Plans have also implemented restrictive coverage policies with rigorous drug utilization review to ensure appropriate utilization within patient populations. Payers have also provided more plan oversight on access to office-administered medications by requiring specialty pharmacy involvement and billing for drugs through the plan’s pharmacy benefit, rather than the medical benefit.
What will be the response from pharma? As plans become more sensitive to increasing cost and inflationary trends, manufacturers must consider the use of innovative contracting strategies in order to avoid step edits, as well as to gain preferred reimbursement positions within a plan. Negotiation of access to products with large market share should be done before more steps are added to the reimbursement process. Patient-focused strategies are also important to ensure appropriate access based on patient out-of-pocket expenditures.
Health systems, including integrated delivery networks, are in an excellent position to develop contract models that focus on value to the patient and to the payer. The health system supply chain has historically negotiated discounts and/or rebates based on volume and preferential tiering. As manufacturers enter the value-based contract space, they are developing most of the criteria in-house. Many integrated delivery networks can assist manufacturers in development through a collaborative approach that helps to meet the needs of both entities. Health systems and payers are in a position as well to integrate medical and pharmacy claims data, creating a more holistic approach to viewing patient treatment. There is a significant opportunity to follow patients through, and beyond, their treatment journey to document the true value of a therapy. Unique contracting models may provide reimbursement to the payer and to the patient should a therapy not achieve its expected outcome. This is crucially important with cancer, in which extending duration and quality of life are vital to patient care.
1. Cancer Statistics was originally published by the National Cancer Institute. https://www.cancer.gov/about-cancer/understanding/statistics. Accessed 3/21/2018.
2. SEER Incidence and US Mortality Trends, 2004-2013. Updated September Sept 12, 2016. https://seer.cancer.gov/archive/csr/1975_2013/ Accessed 3/21/2018
3. Jawadekar, M. Emerging Oncology Drugs in Pharma R&D Pipeline. https://pharma.elsevier.com/pharma-rd/emerging-oncology-drugs-pharma-rd-pipeline/ Accessed 3/21/2018
4. Kaiser Health News. Cascade of Costs Could Push CAR-T Therapy to $1.5M per Patient. Oct 17, 2017. https://endpts.com/cascade-of-costs-could-push-new-gene-therapy-above-1-million-per-patient/ Accessed 3/21/2018
5. Pauwels, K, Huys, I, Casteels, M, Simoens, S. Industry Perspectives on Market Access of Innovative Drugs: The Relevance for Oncology Drugs. Front Pharmacol 2016: Jun 1.
6. Weber, S, Shewbrooks, R. Managed Markets Access: 5 Oncology Payment Trends Revealed: How to Stay Ahead of Uncertainty. https://www.pm360online.com/managed-markets-access-5-oncology-payment-trends-revealed-how-to-stay-ahead-of-uncertainty/ Accessed 3/20/2018