Oral Cancer Drugs Deserve Parity

Some cancer patients are walking away empty handed from the pharmacy because of the high cost of some medications.

A study linking the size of copayments to patient abandonment of oral cancer drugs released last week put a spotlight on the uncomfortable truth. Among the many findings: 25% of patients didn't purchase their prescription medication when they learned copayments or cost-sharing would require them to pay more than $500.

One of the drivers of high copayments is the high cost of cancer drug treatments. Medco Health Solutions has released a drug trend report that says cancer drugs are expected to see sharp increases in spending and use by 2013. More than 90% of cancer drugs approved since 2004 cost more than $20,000 for a 12-week course of therapy, that report says.

Another cost driver is the method that health plans use to provide coverage for cancer drugs. Chemotherapy is usually covered as part of medical benefit while oral cancer drugs are covered under pharmacy formularies and benefits. In general that means oral cancer drugs can be more expensive than non-oral chemotherapy treatments.

A few years ago, just when oral drugs were beginning to gain acceptance among physicians and patients, health plans began creating a specialty tier in their drug formularies for the expensive, biologic medications used to treat diseases like cancer. Oral cancer drugs found their way into this tier where the drugs carry significant copayments – often more than $100 – and may include cost sharing, which means the patients pays a fixed percent of the total cost of the drug.

Add to that mix the proliferation of high-deductible health plans, which place more of the cost burden for medical care on enrollees, and it's no wonder sick people are forced to make tough choices.

While no one thinks it's helpful for a patient to skip medications or not comply with a treatment regimen, real solutions to this problem are lacking. With oral cancer drugs accounting for 25% to 35% of the drugs in the cancer drug pipeline this is a parity issue and it's not going away.

I reached out to several health plans to explain why benefits for oral cancer drugs are paid from pharmacy while injectable cancer drugs are part of medical benefits. The silence was deafening; I didn't even get the classic "no comment." So I turned to Susan Pisano, a spokesperson for America's Health Insurance Plans, the advocacy group for health plans. Her explanation was simple: "It's because of the way the drugs are administered. Traditionally, injectables are a medical benefit."

She said there has been discussion within the health plan industry regarding shifting oral cancer drugs to the medical benefit but not much has happened on that front. She added that the assumption that the shift would automatically lower the cost of oral cancer drugs wasn't always valid. Without being too specific, she said, "there are instances where a member would end up paying more for their drugs."

Pisano noted that health plans have taken many steps to help hold down drug costs for their members, including bulk purchasing, but at the end of the day "[you] have to wonder why a cancer drug would cost $20,000."

That statement was the cue for a spokesperson at the Pharmaceutical Research and Manufacturers of America to wonder why patients pay a much higher share of total out-of-pocket costs for drugs than other medical services. In a press statement, deputy vice president Karl Uhlendorf said, "data from the Agency for Healthcare Research and Quality show that on average insured patients pay out of pocket about 4% of inpatient hospital costs, 16% of physician costs, and 27% of prescription drug costs."

He added that "given the high cost of these new oral medications, the implications for cancer patients of mandating full parity for oral and injectable chemotherapy medications is still unknown."

Like other disease-based interest groups, the American Cancer Society is keeping an eye on the essential benefits list being developed by the Institute of Medicine as part of the requirements of the Affordable Care Act. The hope is that the list will include some statements in support of evidence-based treatments for cancer that can be used to convince health plans to change their stance on oral cancer drugs.

Doctors aren't sitting around while their patient struggle to pay for these drugs. There are physician groups that lobby manufacturers to get free drugs for patients. And oncologists do have the fall back position of traditional chemotherapy if oral cancer drugs become too cost prohibitive. But physicians will tell you that the advantage of oral cancer medications, in addition to fewer side effects, is that they are more targeted to specific cancers and are often more effective.

There have been some legislative efforts to bring parity to oral cancer drugs so that insurance companies treat them the same way as injectable cancer drugs.

The American Cancer Society takes a cautious approach to oral parity. Stephen Finan, senior director of policy for the American Cancer Society Cancer Action Network, said in an e-mail that the group is monitoring the issue "to better understand how health plans are handling coverage for both oral and injectable treatments -- specifically to make sure that affordability isn't challenged through increased premiums, stricter utilization management tools or exclusion of anti-cancer medications from formularies to contain costs."