Opinion
VIEWPOINT
Blase N. Polite, MD, MPP Section of Hematology/ Oncology, Department of Medicine, The University of Chicago, Chicago, Illinois. Mark J. Ratain, MD Section of Hematology/ Oncology, Department of Medicine, The University of Chicago, Chicago, Illinois; and Value in Cancer Care Consortium, Ann Arbor, Michigan. Allen S. Lichter, MD Value in Cancer Care Consortium, Ann Arbor, Michigan.
Corresponding Author: Blase N. Polite, MD, MPP, Section of Hematology/Oncology, Department of Medicine, The University of Chicago, 5841 S Maryland Ave, MC 2116, Chicago, IL 60637 (bpolite@ medicine.bsd.uchicago. edu).
Oncology’s “Hockey Stick” Moment for the Cost of Cancer Drugs—The Climate Is About to Change July 2019 was the hottest month in the world’s history. The alarming increase in global temperature was predicted decades ago and made visible by one of the most famous graphs in history: the “hockey stick” graph showing the rise of global temperatures over 1000 years.1 Despite knowing higher temperatures were unavoidable, the world has done little to stem the inexorable rise of carbon emissions and is reaping the consequences. Oncology is potentially facing its own hockey stick moment when it comes to the cost of cancer drugs. During the active phase of treatment for a patient with cancer in Medicare’s Oncology Care Model,2 antineoplastic drug costs represented more than 50% of the total cost of care in 2018 and are expected to contribute nearly 70% of the total cost of active care by 2025 and more than 80% by 2030, 10 years from now (Figure). What might the practice of oncology look like if the costs of the drugs alone exceed 80% of the cost of taking care of patients with cancer during the active phase of their care? From a payer perspective, there are 3 likely responses to this scenario: (1) radically shift the cost risk of drugs onto patients and clinicians, (2) control drug use in a draconian fashion, and/or (3) attempt to directly control drug prices. In the first response, payers ask patients to bear an increasingly larger percentage of the total cost of the drugs through the mechanism of coinsurance and high deductibles. This cost would rise to the point at which increasing numbers of patients could not afford to fill their prescriptions or come into an infusion suite. Alternatively, or simultaneously, payers can bundle the costs of cancer at the clinician level, meaning that oncologists become responsible for paying for drug costs from this bundled payment. A variation of this approach is currently being pursued by the Centers for Medicare & Medicaid Services in the Oncology Care Model and the proposed Oncology Care First Model.2 Many oncology practices will quickly find these payment models to have unacceptable risks and will exit the anticancer drug delivery system altogether. With this payer response, receipt of anticancer therapy will become far more disjointed and challenging. In the second response, payers could use an extreme version of the current prior-authorization regulatory approach. Clinicians would need to hire even more staff to get a drug approved for administration, and the time, effort, and cost required to do so would cripple patient throughput. The anticancer drug delivery system would slow to a crawl. The third response would require a consortium of payers to use their oligopoly power to directly negotiate lower prices for oncology drugs, comparable to those in Western Europe. We note that this would not
jamaoncology.com
be a sufficient solution because oncology drug sales in Western Europe are expected to increase approximately 10% annually as well.3 Achieving more rigid price controls would require Medicare and other payers to be willing to say no to a cancer drug approved by the US Food and Drug Administration at the price being charged. The political pressure to cover such drugs would almost certainly undermine any real negotiating authority. Any solution that relies solely on one of the actors in the drug distribution and delivery system is doomed to failure because no one wants to be the “bad guy.” What is needed is a convener with power (likely the US federal government using its leverage under Medicare) to require all of the other actors to come to an agreement on how to measure value and then implement a value-based payment system that incorporates this definition in a meaningful way. Consensus on linking the value of oncology drugs to drug pricing is not new. In England, the National Institute for Clinical Excellence sets payment based on value, and drugs that fall outside their parameters are not paid for.4 Other groups—such as the Institute for Clinical and Economic Review,5 American Society for Clinical Oncology, and European Society for Medical Oncology—have independently come up with value measurements.6 Once a consensus on value metrics has been achieved, attention can next turn to the creation of valuebased pathways that have impactful positive and negative economic consequences for clinicians. Significant deviations from the pathways would result in financial penalties, whereas adherence would result in bonuses. If oncologists are provided with incentives to not prescribe drugs deemed to be of low value, pressure to lower prices will follow. Pharmaceutical companies will begin to focus development on those drugs likely to be deemed highly valuable by setting higher bars for traditional efficacy outcomes. Alternatively, they could lower the prices of less efficacious drugs to meet the value threshold. However, value-based pathway development alone, like negotiation of lower prices for oncology drugs by a consortium of payers, would not be a sufficient solution. If only a single drug or a single class of drugs is effective for a given clinical situation, then oncologists will be compelled to prescribe it on the pharmaceutical industry’s terms. We can augment the downward price pressure gained from value pathways by supporting the new discipline of interventional pharmacoeconomics, 7 potentially unifying medical oncologists and payers around the world. Oncology drugs have been developed for decades by using the paradigm of maximally (Reprinted) JAMA Oncology Published online October 1, 2020
© 2020 American Medical Association. All rights reserved.
Downloaded From: https://jamanetwork.com/ by a Western University User on 10/10/2020
E1
Opinion Viewpoint
ARTICLE INFORMATION Published Online: October 1, 2020. doi:10.1001/jamaoncol.2020.1828 Conflict of Interest Disclosures: Dr Polite reported receiving assistance with travel expenses from Tapestry Pharmaceuticals and the Institute for Clinical and Economic Review and grants from Merck outside the submitted work. Dr Ratain reported receiving grants and personal fees from AbbVie, grants from Dicerna Pharmaceuticals and Genentech, other support from BeiGene, personal fees from Aptevo Therapeutics, Ascentage Pharma, Cyclacel Pharmaceuticals, Elion Oncology, Shionogi, Pneuma Respiratory; has served as a consult for Accord, Actavis, Amerigen, Apotex, Argentum, BPI Labs, Belcher, Breckenridge, Celltrion, Dr. Reddy’s, Fresenius Kabi, Glenmark, Hetero, Hospira, Mylan, Par, Roxane, Sandoz, and Teva (generic manufacturers) outside the submitted work; patents to US6395481B1 and EP1629111B1 were issued, licensed, and with royalties paid, a patent to US8877723B2 was issued, and a patent to US20160239636A1 is pending; and serves as the director and treasurer of the Value in Cancer Care Consortium. Dr Lichter reported being a paid member of a clinical advisory committee for Ascentage Pharmaceuticals, a paid member of the Board of Directors for Cellworks, and receiving consulting fees from Interga Connect outside the submitted work.
E2
Figure. Chemotherapy Costs as a Proportion of All Other Costs During Active Treatment in the Oncology Care Model (OCM) OCM expenditures per episode, $ (thousands)
tolerated dose and the corresponding assumption that “more is better.” However, it is increasingly recognized that this paradigm is wrong and that many oncology drugs are labeled at a dose well in excess of the maximally effective dose. This was recently exemplified by a study of low-dose abiraterone,8 which demonstrated that a 75% dose reduction has comparable efficacy in the treatment of metastatic prostate cancer. Combining this low-dose option with a generic version of abiraterone has reduced the cost of a year of treatment by 90%.9 Similar opportunities abound for many other important oncology drugs, such as ibrutinib and the checkpoint inhibitors.7 We believe a payment system that meaningfully incorporates value-based pathways and incentivizes interventional pharmacoeconomic practices would not only help avoid the doomsday scenario we have projected but will actually lead to better care for our patients. Much as with the current climate change issue, the work we put in now can produce a better—or less catastrophic— outcome in the future. We have tools available. Now the choice is whether or not to deploy them.
200 180
Chemotherapy
160
Other Part D drugs
140
Other expenditures
120 100 80 60 40 20 0 2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Year
Adapted using data from the American Association of Medical Colleges OCM Collaborative (2012-2019 aggregate data).
Additional Contributions: We thank Theresa Dreyer, MPH (American Association of Medical Colleges [AAMC]), and Alyssa Dahl, MPH (DataGen), for their assistance in data acquisition and Marcus Paschall, MBA (The University of Chicago), for his help with data forecasting and visualization. There was no financial compensation for these contributions. We also thank the AAMC and DataGen for data support. REFERENCES 1. Houghton JT, Ding Y, Griggs DJ, et al, eds. Climate Change 2001: The Scientific Basis: Contribution of Working Group I to the Third Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press; 2001. 2. Centers for Medicare & Medicaid Services. Informal request for information on proposed Oncology Care First model. Accessed February 23, 2020. https://innovation.cms.gov/Files/x/ocfinformalrfi.pdf 3. Van Arnum P. Gauging the opportunities in the oncology drug market. DCAT Value Chain Insights. Published June 5, 2019. Accessed March 3, 2020. https://www.dcatvci.org/5977-gauging-theopportunities-in-the-oncology-drug-market
5. Cohen J. ICER’s growing impact on drug pricing and reimbursement. Forbes. Published April 17, 2019. Accessed February 23, 2020. https://www. forbes.com/sites/joshuacohen/2019/04/17/icersgrowing-impact-on-drug-pricing-andreimbursement/#52d2fed46b53 6. Cherny NI, de Vries EGE, Dafni U, et al. Comparative assessment of clinical benefit using the ESMO–Magnitude of Clinical Benefit Scale version 1.1 and the ASCO Value Framework Net Health Benefit score. J Clin Oncol. 2019;37(4):336349. doi:10.1200/JCO.18.00729 7. Ratain MJ, Goldstein DA, Lichter AS. Interventional pharmacoeconomics—a new discipline for a cost-constrained environment. JAMA Oncol. 2019;5:1097-1098. doi:10.1001/ jamaoncol.2019.1341 8. Szmulewitz RZ, Peer CJ, Ibraheem A, et al. Prospective international randomized phase II study of low-dose abiraterone with food versus standard dose abiraterone in castration-resistant prostate cancer. J Clin Oncol. 2018;36(14):1389-1395. doi:10.1200/JCO.2017.76.4381 9. Tannock IF. Improving treatment for advanced prostate cancer. N Engl J Med. 2019;381(2):176-177. doi:10.1056/NEJMe1906363
4. Rawlins MD. National Institute for Clinical Excellence: NICE works. J R Soc Med. 2015;108(6): 211-219. doi:10.1177/0141076815587658
JAMA Oncology Published online October 1, 2020 (Reprinted)
© 2020 American Medical Association. All rights reserved.
Downloaded From: https://jamanetwork.com/ by a Western University User on 10/10/2020
jamaoncology.com
VIEWPOINT
Blase N. Polite, MD, MPP Section of Hematology/ Oncology, Department of Medicine, The University of Chicago, Chicago, Illinois. Mark J. Ratain, MD Section of Hematology/ Oncology, Department of Medicine, The University of Chicago, Chicago, Illinois; and Value in Cancer Care Consortium, Ann Arbor, Michigan. Allen S. Lichter, MD Value in Cancer Care Consortium, Ann Arbor, Michigan.
Corresponding Author: Blase N. Polite, MD, MPP, Section of Hematology/Oncology, Department of Medicine, The University of Chicago, 5841 S Maryland Ave, MC 2116, Chicago, IL 60637 (bpolite@ medicine.bsd.uchicago. edu).
Oncology’s “Hockey Stick” Moment for the Cost of Cancer Drugs—The Climate Is About to Change July 2019 was the hottest month in the world’s history. The alarming increase in global temperature was predicted decades ago and made visible by one of the most famous graphs in history: the “hockey stick” graph showing the rise of global temperatures over 1000 years.1 Despite knowing higher temperatures were unavoidable, the world has done little to stem the inexorable rise of carbon emissions and is reaping the consequences. Oncology is potentially facing its own hockey stick moment when it comes to the cost of cancer drugs. During the active phase of treatment for a patient with cancer in Medicare’s Oncology Care Model,2 antineoplastic drug costs represented more than 50% of the total cost of care in 2018 and are expected to contribute nearly 70% of the total cost of active care by 2025 and more than 80% by 2030, 10 years from now (Figure). What might the practice of oncology look like if the costs of the drugs alone exceed 80% of the cost of taking care of patients with cancer during the active phase of their care? From a payer perspective, there are 3 likely responses to this scenario: (1) radically shift the cost risk of drugs onto patients and clinicians, (2) control drug use in a draconian fashion, and/or (3) attempt to directly control drug prices. In the first response, payers ask patients to bear an increasingly larger percentage of the total cost of the drugs through the mechanism of coinsurance and high deductibles. This cost would rise to the point at which increasing numbers of patients could not afford to fill their prescriptions or come into an infusion suite. Alternatively, or simultaneously, payers can bundle the costs of cancer at the clinician level, meaning that oncologists become responsible for paying for drug costs from this bundled payment. A variation of this approach is currently being pursued by the Centers for Medicare & Medicaid Services in the Oncology Care Model and the proposed Oncology Care First Model.2 Many oncology practices will quickly find these payment models to have unacceptable risks and will exit the anticancer drug delivery system altogether. With this payer response, receipt of anticancer therapy will become far more disjointed and challenging. In the second response, payers could use an extreme version of the current prior-authorization regulatory approach. Clinicians would need to hire even more staff to get a drug approved for administration, and the time, effort, and cost required to do so would cripple patient throughput. The anticancer drug delivery system would slow to a crawl. The third response would require a consortium of payers to use their oligopoly power to directly negotiate lower prices for oncology drugs, comparable to those in Western Europe. We note that this would not
jamaoncology.com
be a sufficient solution because oncology drug sales in Western Europe are expected to increase approximately 10% annually as well.3 Achieving more rigid price controls would require Medicare and other payers to be willing to say no to a cancer drug approved by the US Food and Drug Administration at the price being charged. The political pressure to cover such drugs would almost certainly undermine any real negotiating authority. Any solution that relies solely on one of the actors in the drug distribution and delivery system is doomed to failure because no one wants to be the “bad guy.” What is needed is a convener with power (likely the US federal government using its leverage under Medicare) to require all of the other actors to come to an agreement on how to measure value and then implement a value-based payment system that incorporates this definition in a meaningful way. Consensus on linking the value of oncology drugs to drug pricing is not new. In England, the National Institute for Clinical Excellence sets payment based on value, and drugs that fall outside their parameters are not paid for.4 Other groups—such as the Institute for Clinical and Economic Review,5 American Society for Clinical Oncology, and European Society for Medical Oncology—have independently come up with value measurements.6 Once a consensus on value metrics has been achieved, attention can next turn to the creation of valuebased pathways that have impactful positive and negative economic consequences for clinicians. Significant deviations from the pathways would result in financial penalties, whereas adherence would result in bonuses. If oncologists are provided with incentives to not prescribe drugs deemed to be of low value, pressure to lower prices will follow. Pharmaceutical companies will begin to focus development on those drugs likely to be deemed highly valuable by setting higher bars for traditional efficacy outcomes. Alternatively, they could lower the prices of less efficacious drugs to meet the value threshold. However, value-based pathway development alone, like negotiation of lower prices for oncology drugs by a consortium of payers, would not be a sufficient solution. If only a single drug or a single class of drugs is effective for a given clinical situation, then oncologists will be compelled to prescribe it on the pharmaceutical industry’s terms. We can augment the downward price pressure gained from value pathways by supporting the new discipline of interventional pharmacoeconomics, 7 potentially unifying medical oncologists and payers around the world. Oncology drugs have been developed for decades by using the paradigm of maximally (Reprinted) JAMA Oncology Published online October 1, 2020
© 2020 American Medical Association. All rights reserved.
Downloaded From: https://jamanetwork.com/ by a Western University User on 10/10/2020
E1
Opinion Viewpoint
ARTICLE INFORMATION Published Online: October 1, 2020. doi:10.1001/jamaoncol.2020.1828 Conflict of Interest Disclosures: Dr Polite reported receiving assistance with travel expenses from Tapestry Pharmaceuticals and the Institute for Clinical and Economic Review and grants from Merck outside the submitted work. Dr Ratain reported receiving grants and personal fees from AbbVie, grants from Dicerna Pharmaceuticals and Genentech, other support from BeiGene, personal fees from Aptevo Therapeutics, Ascentage Pharma, Cyclacel Pharmaceuticals, Elion Oncology, Shionogi, Pneuma Respiratory; has served as a consult for Accord, Actavis, Amerigen, Apotex, Argentum, BPI Labs, Belcher, Breckenridge, Celltrion, Dr. Reddy’s, Fresenius Kabi, Glenmark, Hetero, Hospira, Mylan, Par, Roxane, Sandoz, and Teva (generic manufacturers) outside the submitted work; patents to US6395481B1 and EP1629111B1 were issued, licensed, and with royalties paid, a patent to US8877723B2 was issued, and a patent to US20160239636A1 is pending; and serves as the director and treasurer of the Value in Cancer Care Consortium. Dr Lichter reported being a paid member of a clinical advisory committee for Ascentage Pharmaceuticals, a paid member of the Board of Directors for Cellworks, and receiving consulting fees from Interga Connect outside the submitted work.
E2
Figure. Chemotherapy Costs as a Proportion of All Other Costs During Active Treatment in the Oncology Care Model (OCM) OCM expenditures per episode, $ (thousands)
tolerated dose and the corresponding assumption that “more is better.” However, it is increasingly recognized that this paradigm is wrong and that many oncology drugs are labeled at a dose well in excess of the maximally effective dose. This was recently exemplified by a study of low-dose abiraterone,8 which demonstrated that a 75% dose reduction has comparable efficacy in the treatment of metastatic prostate cancer. Combining this low-dose option with a generic version of abiraterone has reduced the cost of a year of treatment by 90%.9 Similar opportunities abound for many other important oncology drugs, such as ibrutinib and the checkpoint inhibitors.7 We believe a payment system that meaningfully incorporates value-based pathways and incentivizes interventional pharmacoeconomic practices would not only help avoid the doomsday scenario we have projected but will actually lead to better care for our patients. Much as with the current climate change issue, the work we put in now can produce a better—or less catastrophic— outcome in the future. We have tools available. Now the choice is whether or not to deploy them.
200 180
Chemotherapy
160
Other Part D drugs
140
Other expenditures
120 100 80 60 40 20 0 2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
Year
Adapted using data from the American Association of Medical Colleges OCM Collaborative (2012-2019 aggregate data).
Additional Contributions: We thank Theresa Dreyer, MPH (American Association of Medical Colleges [AAMC]), and Alyssa Dahl, MPH (DataGen), for their assistance in data acquisition and Marcus Paschall, MBA (The University of Chicago), for his help with data forecasting and visualization. There was no financial compensation for these contributions. We also thank the AAMC and DataGen for data support. REFERENCES 1. Houghton JT, Ding Y, Griggs DJ, et al, eds. Climate Change 2001: The Scientific Basis: Contribution of Working Group I to the Third Assessment Report of the Intergovernmental Panel on Climate Change. Cambridge University Press; 2001. 2. Centers for Medicare & Medicaid Services. Informal request for information on proposed Oncology Care First model. Accessed February 23, 2020. https://innovation.cms.gov/Files/x/ocfinformalrfi.pdf 3. Van Arnum P. Gauging the opportunities in the oncology drug market. DCAT Value Chain Insights. Published June 5, 2019. Accessed March 3, 2020. https://www.dcatvci.org/5977-gauging-theopportunities-in-the-oncology-drug-market
5. Cohen J. ICER’s growing impact on drug pricing and reimbursement. Forbes. Published April 17, 2019. Accessed February 23, 2020. https://www. forbes.com/sites/joshuacohen/2019/04/17/icersgrowing-impact-on-drug-pricing-andreimbursement/#52d2fed46b53 6. Cherny NI, de Vries EGE, Dafni U, et al. Comparative assessment of clinical benefit using the ESMO–Magnitude of Clinical Benefit Scale version 1.1 and the ASCO Value Framework Net Health Benefit score. J Clin Oncol. 2019;37(4):336349. doi:10.1200/JCO.18.00729 7. Ratain MJ, Goldstein DA, Lichter AS. Interventional pharmacoeconomics—a new discipline for a cost-constrained environment. JAMA Oncol. 2019;5:1097-1098. doi:10.1001/ jamaoncol.2019.1341 8. Szmulewitz RZ, Peer CJ, Ibraheem A, et al. Prospective international randomized phase II study of low-dose abiraterone with food versus standard dose abiraterone in castration-resistant prostate cancer. J Clin Oncol. 2018;36(14):1389-1395. doi:10.1200/JCO.2017.76.4381 9. Tannock IF. Improving treatment for advanced prostate cancer. N Engl J Med. 2019;381(2):176-177. doi:10.1056/NEJMe1906363
4. Rawlins MD. National Institute for Clinical Excellence: NICE works. J R Soc Med. 2015;108(6): 211-219. doi:10.1177/0141076815587658
JAMA Oncology Published online October 1, 2020 (Reprinted)
© 2020 American Medical Association. All rights reserved.
Downloaded From: https://jamanetwork.com/ by a Western University User on 10/10/2020
jamaoncology.com
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