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Workshop Summary
Pages 1-50

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From page 1...
... The goals of these workshops are to encourage dialogue among stakeholders, raise awareness of the issues, and to generate ideas for potential solutions to existing challenges. Although many elements contribute to the cost of cancer care, one important component is the cost of new cancer drugs, which has been escalating rapidly in recent years.
From page 2...
... Thus, to improve cancer care, there is a need to consider patient access to appropriate cancer drugs and other treatments broadly. To explore the issue of cancer drug costs and patient access to affordable, appropriate drug therapies, the NCPF convened a workshop1 on ensuring patient access to affordable cancer drugs on June 9, 2014, in Washington, DC.
From page 3...
... NEW LANDSCAPE OF CANCER CARE Several speakers described the new landscape of cancer care that is marked by skyrocketing costs, drug shortages, and loss of many community oncology practices as they migrate to hospitals. Workshop participants discussed the role that many different stakeholders could take in addressing these challenges, including patients and care providers, health care ­ ayers, and pharmaceutical manufacturers.
From page 4...
... •  se cost sharing to encourage patients to select high-performing U providers and care settings (Mark Fendrick, University of Michigan; Eric Hammelman, Avalere Health) •  se value-based insurance designs in which the cost-sharing level U depends on the clinical benefit, not acquisition price, of the service (Mark Fendrick; Patricia Danzon, University of Pennsylvania)
From page 5...
... •  ive pharmaceutical firms a guaranteed price on the market in place G of patent protection for long periods of time (Lee Newcomer) Address drug shortages •  ccelerate or prioritize regulatory support for low-cost cancer drugs A or those with supply issues (Peyton Howell, Yousuf Zafar)
From page 6...
... . FIGURE 2  Monthly and median costs of cancer drugs at the time of the Food and Drug Administration (FDA)
From page 7...
... However, cancer patients often have much greater than average out-of-pocket expenses, with one study finding they may pay $4,000 to $5,000 per year for their cancer care (Bernard et al., 2011)
From page 8...
... Peyton Howell, senior vice president and president, global sourcing and manufacturer relations for AmerisourceBergen added, "The cost crisis is really due not just to patients who are not insured, but also due to patients who are underinsured." Bruce Gould, vice president of the Community Oncology Alliance, stressed, "A lot of the administrative burden of our practice is getting these underinsured or uninsured patients access to care through co-pay foundations and foundations that supply free drugs, etc." Kolodziej said that with the Patient Protection and Affordable Care Act (ACA) , "the maximum out-of-pocket expense is reached in the first month of treatment, and deductibles and coinsurance become irrelevant.
From page 9...
... "I'm not really certain that outof-pocket costs for cancer care will necessarily decrease with the Affordable Care Act," Zafar said, "and as a result, patients are having difficulty paying their medical bills." Data suggest that between one out of three and one out of five patients report difficulty paying their medical bills (Kaiser Family ­ Foundation and Kaiser Health Research and Educational Trust, 2013)
From page 10...
... Migration of Private Practices to Hospitals Out-of-pocket costs are also increasing due to the rising migration of community oncology practices to hospitals. Just within 2013, 288 clinics closed, Gould noted, and four recent studies reveal that the cost of care, including both radiation therapy and chemotherapy, is higher in the hospital outpatient department compared to the oncologist's office.
From page 11...
... SOURCES: Gould presentation, June 9, 2014; Community Oncology Practice Impact Report, Community Oncology Alliance, July 2013; Results of Analyses for Chemotherapy Administration Utilization and Chemotherapy Drug Utilization, 2005-2011 for Medicare Fee-for-Service Beneficiaries, The Moran Company, May 2013. Hammelman added that physicians are required by Medicare to submit a code for their services and are reimbursed based on that fee code, whereas hospitals are not scrutinized as carefully and instead of submitting a code, they are reimbursed a percentage of what they charge, regardless of the reason for the charge.
From page 12...
... Even if you're not on therapy right now, you're paying for this at the moment as this trend continues to happen," he stressed. FACTORS INFLUENCING CANCER CARE ACCESS AND COSTS Workshop participants discussed a number of factors affecting access to cancer drugs and increased costs, including • Drug pricing practices and the increased cost of developing new  drugs; • Shortages of older generic drugs;  • Consolidation of practices; and  • Reimbursement incentives that foster the use of higher cost drugs  and the shift of site of care from the community to the hospital setting.
From page 13...
... Consequently, the market volume for each cancer drug, that is, the number of patients who can use it, has halved or decreased by one-third between 2001 and 2013, about the same period of time during which the price of cancer drugs has skyrocketed (Meyrowitz et al., 2014)
From page 14...
... "That's a very small and niche patient population from which you have to recoup your cost," Bastian said. Zafar suggested that the cause of the dramatic rise in cancer drug prices in recent years is due to biologic agents replacing traditional cytotoxic agents.
From page 15...
... For example, most cancer drug shortages are for injectable generics, which, due to their complexity to manufacture, require more investment by the manufacturer. But the low TABLE 1  Response of Oncologists to the Shortage of Chemotherapy Drugs Adaptation % Switched chemotherapy regimen 78.4 Substituted a drug partway through treatment regimen 76.7 Delayed treatment 43.2 Excluded some patients 36.9 Omitted doses 29.0 Reduced doses 19.9 Referred patients to another practice 16.5 SOURCES: Howell presentation, June 9, 2014; Emanuel et al., 2013.
From page 16...
... , and then this dramatic reduction, such that people exit the space from a manufacturing perspective," she stressed. Further compounding drug shortages are the delays due to acquiring approval from the FDA for an Abbreviated New Drug Application (ANDA)
From page 17...
... One study suggested that when cancer drugs go off patent, oncologists shift to
From page 18...
... He added, however, that "no one is really standing up to defend ‘buy and bill,' but instead arguing that the reimbursement laws we have right now provide inadequate support for care coordination and the complex disease management required for high-quality cancer care. You're giving something up if you don't pay for this care and ASP plus six is really inadequate to cover costs and the risk for purchasing and maintaining expensive cancer drugs." Some practices need to keep $1 million worth of chemotherapy drugs in their inventory, he noted.
From page 19...
... Sequestration introduced additional reduced reimbursement rates, not only because of the 2 percent reduced reimbursement rate for drugs, but a 2 percent reduced reimbursement rate for administration services, with practices offering radiology services receiving further cuts in their reimbursements. The CMS reimbursement rate for physicians administering cancer drugs has also decreased due to a new method the agency used to determine reimbursement for such services that was based on the Physician Practice Expense Survey done by the American Medical Association.
From page 20...
... . Several workshop speakers noted that it has substantially affected the market of cancer care and furthered consolidation of private practices and their migration to hospitals.
From page 21...
... . Conti remarked, "These affiliated clinics appear to be serving increasingly wealthy and less indigent patient populations over time, a trend that accelerated after around 2008.
From page 22...
... She suggested this fostered both physician mergers and affiliations amongst themselves, as well as physician practice affiliations with hospitals and hospital mergers, all of which have substantially increased since 2010, when HRSA began allowing subcontracting with commercial pharmacies. Conti speculated that when drug manufacturers set their launch price of new drugs, they are likely considering the increasing availability of 340B discounts and pricing their products higher to compensate.
From page 23...
... "When we have consolidated providers, they have ­ arket m power and are able to name their price and you have to pay it," Conti noted. Hartstein added, "The changes in CMS payments have shifted the incentives and many physician practices have consequently become hospital outpatient departments." The most common current trend is for private practices to align with hospitals because it offers the most benefits for both physicians and hospitals, but not necessarily for patients, Gould said.
From page 24...
... Many U.S. community oncology clinics have closed, report that they are struggling financially, are sending patients elsewhere, have a hospital agreement, or have merged or been acquired by another entity.
From page 25...
... Fendrick stressed that "More care is often not better care. As someone who has been challenged on the floor of Capitol Hill as a rationer, my response is that I ration harmful care." He suggested eliminating care for which the evidence convincingly shows a lack of value or potential harm to BOX 3 Value-Based Assessments in the United Kingdom Kalipso Chalkidou reported that Great Britain's National Health Service (NHS)
From page 26...
... More than 60 medical specialties are participating in Choosing Wisely campaigns. Nasso stressed, "We must collectively change the discussion on health care costs from ‘how much' to ‘how well' because we have enough money in the system.
From page 27...
... He cautioned that in the developing world when patents were violated, it destroyed the architecture and investment case for these therapy areas. Some workshop participants suggested more specific potential solutions to improve patient access to cancer care and to lower the costs of that care.
From page 28...
... ­ endrick added, "The evidence is overwhelming in cancer that the F consumer doesn't care about overall costs, so we should start aligning the consumer incentive around what they are paying to what they are buying." Many workshop participants suggested that value-based insurance designs and frank conversations with patients about the costs and benefits of their treatment options might help lower the excessive costs of cancer care. Traditionally, insurance companies incentivize patients and physicians to choose a lower cost but equally effective drug by establishing tiered cost-sharing rates, in which patients have a smaller co-pay for lower cost drugs than for more expensive drugs.
From page 29...
... But he noted the challenge in oncology is that "even if you pick a service to be high or low value, that service depends on who gets it, who provides it, and where." He concluded his presentation by suggesting valuebased insurance designs be applied to oncology by imposing no more than modest cost sharing to high-value services, and by reducing cost sharing in accordance with patient- or disease-specific characteristics. "This idea of making sure people have a lower cost share if they test positive for a marker that indicates a higher likelihood of a medication success is a no brainer and something that both providers and plans can implement," Fendrick said.
From page 30...
... "Value-based insurance design implemented even in a baby-step way should be part of the solution to enhancing efficiency in cancer care, and such cost containment efforts should not produce preventable reductions in quality of care," Fendrick concluded. But Kevin Olson, executive medical director at Providence Cancer Center, noted that "consensus on value definition is lacking," especially when it comes to making value assessments of end-of-life cancer care.
From page 31...
... Instead she suggested that patient advocates not currently undergoing cancer care take more of a role in advocating for lower cost drugs and other cancer therapies. Nasso also stressed that physicians can have honest discussions with their patients about the value of their care options -- to communicate the evidence so they understand, for example, that "response" does not mean they are going to be cured.
From page 32...
... Her study found that the largest predictor of diffusion of cancer drugs was the underlying mortality of the cancer itself. Bastian said another study found that patients are willing to pay for just the hope that their cancer will be cured (Lakdawalla et al., 2012)
From page 33...
... Many of the newer oral cancer drugs are quite expensive, which causes out-of-pocket costs to be in the thousands of dollars for many patients. Recognizing this, 34 states and the District of Columbia have passed oral parity laws with the requirement that the reimbursement benefit for oral chemotherapy drugs cannot be any lower than the benefit for intravenously administered cancer
From page 34...
... "Our practice administrator jokes that when the patients come in they're going to be given a hat with what payer they have so we can use the right guidelines for them," he said. He added that the approach the Community Oncology Alliance takes is to view the total care of the patient, not just the drugs they are prescribed.
From page 35...
... Bastian noted that such laws are an opportunity to significantly lower cancer drugs costs. "If you could reduce the price of 50 percent of the market share by 20 to 30 percent, I don't think we'd even be having this discussion right now," he said.
From page 36...
... "It's irrational and unsustainable and does not adequately compensate those other important aspects of care," he said. Nasso emphasized that reducing the cost of cancer drugs will be just part of the solution, and she agreed that the supportive care physicians provide to their cancer patients should be reimbursed at a higher rate.
From page 37...
... "Establish payment rates based on your own data and patient populations," he stressed. Hartstein noted that the ACA created the Bundled Care for Payments Improvement Initiative, which includes four innovative new payment models.
From page 38...
... But Conti cautioned against generalizing this example to oncology because "we don't have great quality metrics for much of the outcomes related to cancer care, so we're stuck with process measures, which may or may not be correlated with outcomes. The opportunity for gaming and also for stinting looms its head in those cases." Feeley noted that a bundled payment model designed specifically for cancer care was not addressed in the ACA, and an IOM report found no current evidence for the effectiveness of such a model in controlling costs of cancer treatment (IOM, 2013c)
From page 39...
... care received in the hospital outpatient setting is significantly higher than that in the physician office. For a very small investment, community oncology can be preserved and again help provide expert care close to the patient's home." Hartstein reported that the Medicare Payment Advisory Committee (MedPAC)
From page 40...
... Zafar suggested accelerating or prioritizing regulatory support for low-cost cancer drugs or those with supply issues. He noted that a few private payers have changed their reimbursement rate so it is higher for generic or low-cost products.
From page 41...
... If prelaunch outcomes evidence is limited, there could be provisional reimbursement, with postlaunch data collection and price adjustment if needed. Kolodziej concurred that value-based pricing for cancer drugs was a useful approach, saying "You get what you pay for -- if it works, you get paid a little bit more, and if it doesn't work, you don't get paid so much." He pointed out that a lot of money is currently wasted on cancer therapies that do not work, giving the example of five new oral treatments for kidney cancer, which cost about $10,000 per month, but often do not substantially change patient outcomes.
From page 42...
... . Bastian noted that less than 40 percent of oncology drugs are brought to the market with comparative effectiveness data (Goldberg et al., 2011)
From page 43...
... This will be 5 to 10 years of work, but we have to be honest about being able to publicly report our outcomes and compete on price," he said. Schilsky noted that cancer drugs are typically introduced into the market­ lace after a study in patients with advanced disease in whom p the value is likely to be the most difficult to demonstrate and the com­ parator may often be best supportive care or placebo.
From page 44...
... However, implementation was inconsistent as there were no codes for curable versus incurable cancer. When it became apparent that cancer costs were escalating at an unsustainable rate, and that cancer spending was occurring dispropor tionately in the past 6 months of life where it would not be of greatest value, Oregon Medicaid asked the Health Evidence Review Commission (then called the Oregon Health Services Commission)
From page 45...
... The ACA expanded the budget of Medicaid to allow coverage of more patients, but with the expectation that savings from more effective care delivery will offset less federal money in the future, so the expansion could be sustainably affordable. As a result, the Oregon Health Evidence Review Commission convened another task force last year, which modified the previous guideline so that now treatment with intent to prolong survival is not covered for patients with: •  rogressive metastatic cancer and severe comorbidities ­ nrelated P u to the cancer that result in significant impairment in two or more major organ systems which would affect efficacy and/or toxicity of therapy, or •  continued decline, in spite of best available therapy, with a A nonreversible performance score of <50 percent (as defined by Karnofsky and Burchenal, 1949)
From page 46...
... In his summary of the proceedings, Bach noted "We are paying a very high premium in the United States to avoid some conversations that other countries were willing to have about the goals of health care and whether they will fit in the budget." Several workshop participants suggested ways to contain cancer care costs, including innovative ways to deliver, assess, and pay for cancer care, and helping patients understand the costs of their treatments. Some of these proposals are currently being developed or tested in pilot programs.
From page 47...
... 2009. Limits on Medicare's ability to control rising spending on cancer drugs.
From page 48...
... 2013. Survey of oncologists about shortages of cancer drugs.
From page 49...
... 2013. Survey of oncologists about shortages of cancer drugs.


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