“During the active phase of treatment for a patient with cancer in Medicare’s Oncology Care Model, 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.
[..] 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. Other groups—such as the Institute for Clinical and Economic Review, American Society for Clinical Oncology, and European Society for Medical Oncology—have independently come up with value measurements.
Once a consensus on value metrics has been achieved, attention can next turn to the creation of value-based 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, potentially unifying medical oncologists and payers around the world. Oncology drugs have been developed for decades by using the paradigm of maximally 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, 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%. Similar opportunities abound for many other important oncology drugs, such as ibrutinib and the checkpoint inhibitors.”
Full article, Polite BN, Ratain MJ and Lichter AS. JAMA Oncology 2020.10.1