Addressing The High Cost Of Drugs For Oncology Patients

Policy

Addressing The High Cost Of Drugs For Oncology Patients: A National Priority

Introduction

Skyrocketing drug prices are becoming the norm for innovative and potentially lifesaving therapy, especially in oncology.  The recently approved breast cancer drug, Ibrance™, was released at a price point of just under $10,000/month. The prices for non-generic drugs are higher in the United States than anywhere else in the world. Why are we seeing a steep rise in drug costs? The US does not regulate access to new drugs, nor does it regulate costs. Additionally, the US is the only nation that allows direct to consumer advertising of prescription drugs, and the only country that prohibits federal agencies from directly negotiating for lower drug prices.

The Society of Gynecologic Oncology (SGO) is comprised of medical practitioners who provide care to women with gynecologic malignancies (ovary, uterus, cervix, vulva and vagina). We are concerned that financial hardships due to accelerating drug costs (“financial toxicity”) will lead to a greater chasm in access among patients already suffering from the burden of disease, if major changes to the healthcare system are not made. The SGO acknowledges that the costs to bring a drug from discovery to market are high and should be taken into consideration in the development of policies in the area. Nevertheless, we propose the following changes to improve the availability of drugs for our patients at a reasonable and fair cost:

  • Allow Medicare to negotiate prices.

Current law prohibits Medicare from directly negotiating drug prices with drug companies, unlike the Department of Veteran’s Administration, which can negotiate these prices on behalf of US veterans. European nations also have the ability to negotiate drug prices with manufacturers and, as a result, spend, on average, half of what the US spends each year on prescription drugs. Medicare direct negotiation of drug prices has been projected to save between $229 billion and $541 billion over a decade. Options for how these types of negotiation could occur need to be explored.

  • Encourage transparency from pharmaceutical companies in setting prices.

The precise mechanism by which a pharmaceutical company determines the price for a new drug for which it holds marketing exclusivity is invariably proprietary and closely guarded. A comprehensive survey of the food and drug literature reveals little to no information as to how new drug prices for non-generic drugs are set. Current federal law under the 1938 Food, Drug and Cosmetic Act does not allow the US Food and Drug Administration to demand access to pricing information during the new drug approval (NDA) process, and the NDA application never contains this information. Marketing approval decisions by FDA never consider drug price, and there is no transparency in the process that companies use to set their prices.

  • Improve access to lower cost chemotherapy agents through generics.

Legislation regarding access to generic and biosimilar versions of chemotherapy drugs is complex to say the least; laws involving the Federal Food, Drug and Cosmetic Act and Patent Law are all involved. This is not to say that it is not worth the effort: a recent study in India calculated a cost savings of US$843 million per year by switching to the generic version of several commonly used chemotherapy agents. At the same time, we cannot ignore the fact that bringing new drugs to market is an expensive undertaking for pharmaceutical companies, and they rely on exclusivity to regain what was spent in the process. This is clearly a complex issue that will require input from all parties (physicians, patients, legislators, and pharmaceutical companies) to remedy. The SGO supports efforts by stakeholders to prevent those pharmaceutical industry practices that would systematically exclude readily available generic drugs from cancer patients.

  • Develop a federal working group at the Centers for Medicare and Medicaid Services (CMS) to study value-based pricing.

 Value-based pricing (VBP) is a pricing strategy which focuses on the value of a product to the consumer rather than the cost of development of that product in the determination of the product’s price.  Due to the rapidly rising costs of new oncology medications entering the marketplace, VBP is currently being considered as one of several strategies that may help control the high costs of these medications. A goal of the working group is to examine the potential role of VBP with regard to medications used in the field of gynecologic oncology and to establish a methodology for cost determination of these medications.  The application of VBP to the pricing of cancer medications would involve a thorough evaluation of the benefits (i.e. value) of a medication with regard to its impact on life expectancy, quality of life and adverse effects. This is information that ought to be readily available to patients and their caregivers, including physicians. The VBP group will work in collaboration with the pharmaceutical industry and will include patients and patient advocates as their voices are critical to this discussion.

  • Better Align Drug Supply with Dosing Recommendations

Drug dosing is frequently based on metrics relating to body surface area or body weight (ideal, actual, ideal-adjusted, etc), although others are at a fixed dose. Outside the latter situation, dosing for a population will generally follow a normal distribution requiring individual modification. Limitations of vial dose availability, including the frequent practice of single dose packs, leads to a significant waste and ultimate overspending by end-users. Since Federal guidelines on drug quantity in single dose packs are vague or contradictory, interaction of all stakeholders could better align use and minimize per-patient waste. In one recent estimate, providing just 1 additional vial dose for the top 20 administered drugs in the US could save $2 billion dollars per year.

The above recommendations have one aim: to ensure access by our patients to effective drugs at a reasonable cost. This problem must be attacked from all angles in order to solve it. With the positive cooperation of the federal government, pharmaceutical industry, patients, advocacy groups and physicians, progress can be made and the SGO looks forward to engaging in the process.

Appendix:

http://www.oecd.org/els/pharmaceuticalpricingpoliciesinaglobalmarket.htm

https://www.ncpssm.org/PublicPolicy/Medicare/Documents/ArticleID/1138/Issue-Brief-Medicare-Drug-Negotiation-and-Rebates

http://www.cepr.net/documents/publications/medicare-drug-2012-12.pdf

http://jop.ascopubs.org/content/10/4/e208.full