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Oncologists Debate High Cost of Cancer Drugs

Doctors should address overall cost of cancer care, not just prices of medications, expert says

A panel of prominent oncologists has published a manifesto that points to the advent of $100,000 drugs and their effect on patient finances as indicators of out-of-control prices, according to a report from FierceHealthcare. The consensus statement appears in the August issue of the Mayo Clinic Proceedings.

In response, the pharmaceutical industry released data supporting the calculation that drugs and chemotherapy account for only 20% of the cost of cancer care and 1% of all health care spending.

Ted Okon, executive director of the nonprofit group Community Oncology Alliance, told FierceHealthcare writer Tinker Ready that doctors should be addressing the overall cost of cancer care, not just the price of chemotherapy and medications. His interpretation of the data suggests that drugs make up 25% of the cost of treating Medicare cancer patients and a larger percentage of private-pay patients. He agreed that the price of cancer drugs is unsustainable and needs to be addressed.

When cancer patients are faced with high costs and copays, the expert panel notes, they “have to make difficult choices between spending their incomes (and liquidating assets) on potentially lifesaving therapies or foregoing treatment to provide for family necessities (food, housing, education).”

The panel also points out that many of the players in the health care system, including hospitals, “can be financially conflicted when it comes to discussing rational drug prices.” The authors call for a “cancer patient-based grassroots movement” to push for changes to allow Medicare to negotiate drug prices and allow patients to import lower-cost drugs from Canada.

In addition to medications, the cost of cancer care can include surgery, lab tests, office visits, and imaging. In 2014, doctors at MD Anderson treated 127,00 patients, performed 69,506 hours of surgery, and ordered 12 million lab tests and more than a half million diagnostic imaging procedures.

Okon’s organization represents oncologists who practice outside of the hospital setting. He said that the hospital-based doctors who signed on to the Mayo article should recognize and address not just the cost of drugs, but also the cost of services, such as inpatient and emergency department care.

“You have to look at total costs of care and not just a sliver,” he said. “You have to look at your own institutions.”

Okon’s critique comes at a time when oncologists, like other specialists, are closing private practices and affiliating with hospitals. He also linked his concerns to the long-running debate over the federally mandated 340B drug discount plan for disproportionate-share hospitals. The latest development in that fight is a federal government report that found that Medicare Part B spending was higher per beneficiary at hospitals with the 340B discount.

Lowell E. Schnipper, MD, clinical director of the Beth Israel Deaconess Medical Center Cancer Center, said the issue of cancer care costs is “really complex. The short answer is that the rising costs associated with cancer care are multifactorial.”

Drugs may not be the driving factor in cancer costs, but the price of medications is growing much more rapidly on an annual basis than the cost of any other aspect of cancer care, he said.

The whole cancer treatment paradigm is undergoing a shift, according to Len Lichtenfeld, MD, deputy chief medical officer of the American Cancer Society in Atlanta, Georgia. Much of the outpatient care is moving to hospital settings. There, some facilities are still in the fee-for-service mode, while others are looking toward oncology medical homes and accountable care organizations (ACOs) as ways to deliver care more effectively and efficiently.

“Whether we are at the tipping point or not, I can’t say, but clearly we are in a place where cancer care is very expensive, and all of us have to be conscious of what we do and how we do it,” Lichtfeld commented.

Hospitals will have a larger role and will take on more financial risk with the shift toward ACOs, he said.

Sources: FierceHealthcare; August 3, 2015; and Mayo Clinic Proceedings; August 2015.

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