Implications of Proposed Medicare Reforms to Counteract High Cancer Drug Prices

The Relationship between Health Insurance and Pharmaceutical Innovation: An Empirical Study Based on Meta-Analysis

The growing research interest in the relationship between health insurance and pharmaceutical innovation is driven by their significant impact on healthcare optimization and pharmaceutical development. The existing literature, however, lacks consensus on this relationship and provides no evidence of the magnitude of a correlation. In this context, this study employs meta-analysis to explore the extent to which health insurance affects pharmaceutical innovation. It analyzes 202 observations from 14 independent research samples, using the regression coefficient of health insurance on pharmaceutical innovation as the effect size. The results reveal that there is a strong positive correlation between health insurance and pharmaceutical innovation (r = 0.367, 95% CI = [0.294, 0.436]). Public health insurance exhibits a stronger promoting effect on pharmaceutical innovation than commercial health insurance. The relationship between health insurance and pharmaceutical innovation is moderated by the country of sample origin, data range, journal type, journal impact factor, type of health insurance, and research perspective. Our research findings further elucidate the relationship mechanism between health insurance and pharmaceutical innovation, providing a valuable reference for future explorations in pharmaceutical fields.

Paying for pharmaceuticals: uniform pricing versus two-part tariffs

Two-part pricing (the Netflix model) has recently been proposed instead of uniform pricing for pharmaceuticals. Under two-part pricing the health plan pays a fixed fee for access to a drug at unit prices equal to marginal costs. Despite two-part pricing being socially efficient, we show that the health plan is worse off when the drug producer is a monopolist, as all surplus is extracted. This result is reversed with competition, as two-part pricing yields higher patient utility and lower drug costs for the health plan. However, if we allow for exclusive contracts, uniform pricing is preferred by the health plan. The choice of payment scheme is also shown to influence on the incentives to spend resources on drastic innovations relative to incremental, me-too innovations.

Two views of cancer medicines: Imagery versus evidence

Despite advertising imagery portraying cancer medicines as offering substantial improvement or cure, most patients can expect modest or no incremental benefit from most new treatments, according to pre-specified criteria. When improvements in overall survival are demonstrated, they average just 2.1 months. Despite limited benefits, drug prices have risen while median household incomes have remained largely unchanged, and these higher prices are poorly correlated with improved outcomes. Better alignment of perception with demonstrated drug benefit could be achieved by limitations on advertising and improved labeling or other disclosures. Reforms are also needed to remove financial incentives to prescribe costlier drugs.

Generic entry of aromatase inhibitors and pharmaceutical access: Initiation of hormonal therapy, timeliness of initiation, and drug choice

BACKGROUND

The trade-offs between innovation and pharmaceutical access are central to the policy debate on drug pricing. High prices may limit access, result in medication underuse, and negatively affect outcomes. Generic drugs make treatments more affordable. Prior research measured access as utilization without a defined population that should receive certain drugs, it is unknown whether generic entry reduces underuse and thus improves access.

OBJECTIVES

To measure changes in access (use, timeliness) with the introduction of three generic aromatase inhibitors (AIs, oral breast cancer drugs) between June 2010 and June 2011.

METHODS

This population-based study included 93,650 older (65+) women diagnosed with hormone receptor-positive breast cancer between 2007 and 2013 in the Surveillance, Epidemiology and End Results-Medicare linked database. We examined changes in access with generic entry for initiation of any adjuvant hormonal therapy drug (AIs or tamoxifen) within one year of diagnosis, time from diagnosis to initiation, and choice of initial therapy.

RESULTS

Among 93,650 newly diagnosed breast cancer cases, 67,372 initiated one of the four drugs. With generic entry, initiation rates increased from 69.5% to 74.3%, but non-initiation remained high (up to 25.7%). After controlling for demographics, clinical factors, and insurance coverage, the probability of initiation increased by 4.6 percentage points (P < 0.001, 95%CI: [4.1,5.2]) after generic entry. With generic entry, estimated time to initiation decreased by 0.3 months (P < 0.001, 95%CI: [0.2,0.3]) from 4.1 months, and the probability of choosing AIs over tamoxifen increased by 5.9 percentage points (P < 0.001, 95%CI: [5.3,6.5]). Patterns did not substantially differ by level of cost-sharing.

CONCLUSIONS

Generic entry of AIs was associated with increased probability of receiving recommended treatments, timeliness of treatment, and the probability of receiving clinically preferred treatments. Price changes with generic entry only partially explained these improvements. High non-initiation rates after generic entry suggest prices are not the sole determinant of access.

Association Between Clinical Value and Financial Cost of Cancer Treatments: A Cross-Sectional Analysis

BACKGROUND

The cost of cancer treatment has increased significantly in recent decades, but it is unclear whether these costs have been associated with commensurate improvement in clinical value. This study aimed to assess the association between the cost of cancer treatment and 4 of the 5 NCCN Evidence Blocks (EB) measures of clinical value: efficacy of regimen/agent, safety of regimen/agent, quality of evidence, and consistency of evidence.

METHODS

This is a cross-sectional, observational study. We obtained NCCN EB ratings for all recommended, first-line, and/or maintenance treatments for the 30 most prevalent cancers in the United States and calculated direct pharmacologic treatment costs (drug acquisition, administration fees, guideline-concordant supportive care medications) using Medicare reimbursement rates in January 2019. We used generalized estimating equations to estimate the association between NCCN EB measures and treatment cost with clustering at the level of the treatment indication.

RESULTS

A total of 1,386 treatments were included. Among time-unlimited treatments (those administered on an ongoing basis without a predetermined stopping point), monthly cost was positively associated with efficacy ($3,036; 95% CI, $1,782 to $4,289) and quality of evidence ($1,509; 95% CI, $171 to $2,847) but negatively associated with safety (-$1,470; 95% CI, -$2,790 to -$151) and consistency of evidence (-$2,003; 95% CI, -$3,420 to -$586). Among time-limited treatments (those administered for a predetermined interval or number of cycles), no NCCN EB measure was significantly associated with treatment cost.

CONCLUSIONS

An association between NCCN EB measures and treatment cost was inconsistent, and the magnitude of the association was small compared with the degree of cost variation among treatments with the same EB scores. The clinical value of cancer treatments does not seem to be a primary determinant of treatment cost.

Implementation of a chemotherapy stewardship process

Purpose

To design and implement a chemotherapy stewardship process to optimize the location of chemotherapy administration in an effort to decrease the number of inappropriate inpatient anticancer regimen administrations and decrease institutional costs associated with inpatient administration.

Summary

As the costs of anticancer agents continue to rise, it is crucial that multidisciplinary efforts are aimed at managing anticancer medication utilization; this is especially important for high-cost medications, medications whose use requires increased monitoring due to safety concerns, and medications that do not exert effects quickly and, as such, can be more appropriately administered in the outpatient setting. It is imperative that pharmacists play a role in managing chemotherapy medication utilization, as pharmacists provide expertise in formulary management, a vast knowledge of financial impact and reimbursement processes, and clinical knowledge that can help predict the expected effectiveness and adverse effects of each anticancer regimen. Our institution sought to develop and implement a multidisciplinary chemotherapy stewardship program targeting the optimization of site of anticancer agent administration with a goal of decreasing both cost and inappropriate utilization of high-cost, high-risk anticancer agents.

Conclusion

Implementation of a chemotherapy stewardship service may decrease the number of inappropriate inpatient anticancer regimen administrations and decrease inpatient resource use, thereby decreasing costs to institutions. The concept of a chemotherapy stewardship process was well received by multidisciplinary healthcare colleagues, and a collaborative approach should be used to design and implement such processes.

Cancer drug development: The missing links

IMPACT STATEMENT

The success rate for cancer drugs which enter into phase 1 clinical trials is utterly less. Why the vast majority of drugs fail is not understood but suggests that pre-clinical studies are not adequate for human diseases. In 1975, as per the Tufts Center for the Study of Drug Development, pharmaceutical industries expended 100 million dollars for research and development of the average FDA approved drug. By 2005, this figure had more than quadrupled, to $1.3 billion. In order to recover their high and risky investment cost, pharmaceutical companies charge more for their products. However, there exists no correlation between drug development cost and actual sale of the drug. This high drug development cost could be due to the reason that all patients might not respond to the drug. Hence, a given drug has to be tested in large number of patients to show drug benefits and obtain significant results.

Economic Impact of Oral Therapies for Chronic Lymphocytic Leukemia-the Burden of Novelty

PURPOSE OF REVIEW

Small molecule tyrosine kinase inhibitors (TKIs) and BCL2 inhibitors are oral targeted therapies that have changed the treatment approach to patients with chronic lymphocytic leukemia (CLL). The aim of this review is to summarize the relevant literature on the economic impact of oral novel therapies for the treatment of CLL and discuss the underlying factors and suggested solutions for high drug prices.

RECENT FINDINGS

The cost of therapy for CLL has increased substantially since the introduction of oral therapies. This increase in cost is caused by multiple factors including cost of drug development, alternate reimbursement patterns, lack of transparency, and lack of free market competition. Oral therapies for CLL have dramatically increased costs for both patients and payers. Some solutions to overcome this include value-based pricing, transparency, and legal action that allow Medicare to negotiate drug prices with manufacturers.

Value and Cost of Myeloma Therapy

Major advances have occurred in the treatment of multiple myeloma, including several new drugs that typically cost more than $100,000 per year. Although the gains in myeloma therapy improve overall survival considerably, they are available to only a fraction of the population of patients with myeloma in the world because of regulatory barriers and cost. Myeloma is an example of what is happening in cancer on a much larger scale. Many of the problems discussed call for a wider discussion across all cancers, but they are amplified in myeloma because of the need for multidrug regimens that combine three or more expensive new drugs for prolonged periods of time. In this article, the reasons for the high cost of cancer drugs and possible solutions are examined. The lack of correlation of value and price, the remarkable rise in prices of existing old medications over time, and the lack of access to lifesaving drugs across various countries are also discussed.

Trajectories of Injectable Cancer Drug Costs After Launch in the United States

Purpose

Cancer drug prices at launch have increased in recent years. It is unclear how individual drug prices change over time after launch and what market determinants influence these changes. We measured the price trajectories of a cohort of cancer drugs after their launch into the US market and assessed the influence of market structure on price changes.

Methods

We studied the changes in mean monthly costs for a cohort of 24 patented, injectable anticancer drugs that were approved by the US Food and Drug Administration between 1996 and 2012. To account for discounts and rebates, we used the average sales prices published by the Centers for Medicare and Medicaid Services. Costs were adjusted to US general and health-related inflation rates. For each drug, we calculated the cumulative and annual drug cost changes. We then used a multivariable regression model to evaluate the association between market and cost changes over time.

Results

With a mean follow-up period of 8 years, the mean percent change in cost for all drugs was +25% (range, −14% to +96%). After adjusting for inflation, the mean cost change was +18% (range, −16% to +59%). Rituximab and trastuzumab followed a similar pattern in cost increases over time, and the inflation-adjusted monthly costs rose since approval by 49% and 44%, respectively. New supplemental US Food and Drug Administration approvals, new off-label indications, and new competitors did not influence the annual cost change rates.

Conclusion

Anticancer drug costs may change substantially after launch. Regardless of competition or supplemental indications, there is a steady increase in costs of patented anticancer agents over time. New regulations may be needed to prevent additional increases in drug costs after launch.

Higher Priced Older Pharmaceuticals: How Should We Respond?

We and our patients have been aware of the high cost of medications in the United States for decades; however, we are now witnessing a relatively new phenomenon: exponential price increases for some older pharmaceuticals that have been available for years. To assist practitioners in how to respond to the issue of higher priced pharmaceuticals, an interprofessional session was developed and held at CHEST 2016 in Los Angeles. The session proceedings and a few updates are presented here to summarize what pulmonologists; a sarcoidosis expert; a retired executive of a medical society, an executive of a pharmaceutical company and of a pharmacy; and an ethicist advise that we do about the problem. Because the comments presented at the session and in this manuscript represent the opinions of each author, this commentary in essence is a compilation of nine editorials. It does not represent a comprehensive discussion of the field of pricing of drugs. In reflecting upon the answers to the questions posed, and regardless of their sector of health care, all participants stated that they focused on the patient. However, actually providing patient-focused care (ie, the care defined from the patient's perspective) is another matter. To significantly improve patient satisfaction and health-care outcomes, patient-focused care needs to embody the 3 Cs of (1) communication, (2) continuity of care, and (3) concordance of expectations (ie, finding the common ground). Therefore, we discuss how the 3 Cs apply to responses to higher priced pharmaceuticals.

Breakthroughs in modern cancer therapy and elusive cardiotoxicity: Critical research-practice gaps, challenges, and insights

To date, five cancer treatment modalities have been defined. The three traditional modalities of cancer treatment are surgery, radiotherapy, and conventional chemotherapy, and the two modern modalities include molecularly targeted therapy (the fourth modality) and immunotherapy (the fifth modality). The cardiotoxicity associated with conventional chemotherapy and radiotherapy is well known. Similar adverse cardiac events are resurging with the fourth modality. Aside from the conventional and newer targeted agents, even the most newly developed, immune‐based therapeutic modalities of anticancer treatment (the fifth modality), e.g., immune checkpoint inhibitors and chimeric antigen receptor (CAR) T‐cell therapy, have unfortunately led to potentially lethal cardiotoxicity in patients. Cardiac complications represent unresolved and potentially life‐threatening conditions in cancer survivors, while effective clinical management remains quite challenging. As a consequence, morbidity and mortality related to cardiac complications now threaten to offset some favorable benefits of modern cancer treatments in cancer‐related survival, regardless of the oncologic prognosis. This review focuses on identifying critical research‐practice gaps, addressing real‐world challenges and pinpointing real‐time insights in general terms under the context of clinical cardiotoxicity induced by the fourth and fifth modalities of cancer treatment. The information ranges from basic science to clinical management in the field of cardio‐oncology and crosses the interface between oncology and onco‐pharmacology. The complexity of the ongoing clinical problem is addressed at different levels. A better understanding of these research‐practice gaps may advance research initiatives on the development of mechanism‐based diagnoses and treatments for the effective clinical management of cardiotoxicity.

Addressing the challenge of high-priced prescription drugs in the era of precision medicine: A systematic review of drug life cycles, therapeutic drug markets and regulatory frameworks

CONTEXT

Recent public outcry has highlighted the rising cost of prescription drugs worldwide, which in several disease areas outpaces other health care expenditures and results in a suboptimal global availability of essential medicines.

METHOD

A systematic review of Pubmed, the Financial Times, the New York Times, the Wall Street Journal and the Guardian was performed to identify articles related to the pricing of medicines.

FINDINGS

Changes in drug life cycles have dramatically affected patent medicine markets, which have long been considered a self-evident and self-sustainable source of income for highly profitable drug companies. Market failure in combination with high merger and acquisition activity in the sector have allowed price increases for even off-patent drugs. With market interventions and the introduction of QALY measures in health care, governments have tried to influence drug prices, but often encounter unintended consequences. Patent reform legislation, reference pricing, outcome-based pricing and incentivizing physicians and pharmacists to prescribe low-cost drugs are among the most promising short-term policy options. Due to the lack of systematic research on the effectiveness of policy measures, an increasing number of ad hoc decisions have been made with counterproductive effects on the availability of essential drugs. Future challenges demand new policies, for which recommendations are offered.

CONCLUSION

A fertile ground for high-priced drugs has been created by changes in drug life-cycle dynamics, the unintended effects of patent legislation, government policy measures and orphan drug programs. There is an urgent need for regulatory reform to curtail prices and safeguard equitable access to innovative medicines.

Clinical Evidence Supporting US Food and Drug Administration Approval of Otolaryngologic Prescription Drug Indications, 2005-2014

Objective The US Food and Drug Administration (FDA) approves indications for prescription drugs based on premarket pivotal clinical studies designed to demonstrate safety and efficacy. We characterized the pivotal studies supporting FDA approval of otolaryngologic prescription drug indications. Study Design Retrospective cross-sectional analysis. Setting Publicly available FDA documents. Subjects Recently approved (2005-2014) prescription drug indications for conditions treated by otolaryngologists or their multidisciplinary teams. Drugs could be authorized for treatment of otolaryngologic disease upon initial approval (original indications) or thereafter via supplemental applications (supplemental indications). Methods Pivotal studies were categorized by enrollment, randomization, blinding, comparator type, and primary endpoint. Results Between 2005 and 2014, the FDA approved 48 otolaryngologic prescription drug indications based on 64 pivotal studies, including 21 original indications (19 drugs, 31 studies) and 27 supplemental indications (18 drugs, 33 studies). Median enrollment was 299 patients (interquartile range, 198-613) for original indications and 197 patients (interquartile range, 64-442) for supplemental indications. Most indications were supported by ≥1 randomized study (original: 20/21 [95%], supplemental: 21/27 [78%]) and ≥1 double-blinded study (original: 14/21 [67%], supplemental: 17/27 [63%]). About half of original indications (9/21 [43%]) and one-quarter of supplemental indications (7/27 [26%]) were supported by ≥1 active-controlled study. Nearly half (original: 8/21 [38%], supplemental: 14/27 [52%]) of all indications were approved based exclusively on studies using surrogate markers as primary endpoints. Conclusion The quality of clinical evidence supporting FDA approval of otolaryngologic prescription drug indications varied widely. Otolaryngologists should consider limitations in premarket evidence when helping patients make informed treatment decisions about newly approved drugs.

Next-generation multiple myeloma treatment: a pharmacoeconomic perspective

Advances in the diagnosis and treatment of multiple myeloma have come at a rapid pace, especially with several new drugs entering the market in the last few years. However, access to and affordability of new treatments poses a major challenge, both in the United States and around the world. High costs of life-saving drugs are detrimental to both the personal finances of the individual patient, as well as society which must bear the increasing costs in terms of increased health insurance premiums, taxes, or both. The challenges are not unique to myeloma, but are commonly encountered in several other cancers as well. But to some extent these pharmacoeconomic concerns are amplified in myeloma due to the need for multidrug regimens that combine 2 or more expensive new drugs, continuous therapy, and the prolonged disease course in most patients. We examine current myeloma therapy from a pharmacoeconomic perspective, and discuss the costs involved. We outline the underlying reasons why cancer drugs are so expensive, the measures that are required to lower cost, and propose potential ways in which costs can be reduced while still delivering high-quality care.

For Advanced Cancer, What Treatment Is Next?

This article is the second in a series on palliative care developed in collaboration with the Hospice and Palliative Nurses Association (HPNA; http://hpna.advancingexpertcare.org). The HPNA aims to guide nurses in preventing and relieving suffering and in giving the best possible care to patients and families, regardless of the stage of disease or the need for other therapies. The HPNA offers education, certification, advocacy, leadership, and research.