Oral Chemotherapy Poses Financial Burden to Patients
May 7, 2009 — Oral chemotherapeutic agents are becoming increasingly available, giving patients a convenient and noninvasive treatment option. However, although oral drugs might be on the cusp of heralding in a new era in cancer care, both private and public insurance plans in the United States frequently require patients to shoulder a large burden of the cost for these agents. Another issue is patient adherence to oral therapy, which in some cases stems from the inability to pay for the drugs.
For cancer patients in the United States, there is a big difference in how much they have to pay toward the cost of an oral drug and how much they have to pay for an intravenous product that is administered in the physician’s office or clinic.
The primary reason for this inequity is that oral chemotherapy is generally covered under a prescription benefit, which tends to require higher copayments. Intravenous infusions, however, are traditionally covered under a medical benefit that tends to be more generous in its coverage.
“The original intention of copayments and coinsurance was to limit unnecessary and inappropriate unitization of drugs,” said David L. Knowlton, MA, a member of the board of directors of the HealthWell Foundation, a national nonprofit organization that provides financial assistance to underinsured patients with chronic or life-threatening illnesses to cover certain out-of-pocket costs. “It was never meant to interfere with life-saving treatment. But unfortunately, the intent has shifted from utilization to cost.”
The HealthWell Foundation was established in 2003, and Mr. Knowlton contends that the situation for patients has worsened since that time. “Five or 10 years ago, if a patient had any copay, it was about $5 or $10,” said Mr. Knowlton.
He noted that although some copayments have remained low, particularly for generics, some patients can have out-of-pocket costs of hundreds or even thousands of dollars a month.
The gap in insurance coverage is becoming more problematic, especially when lives are depending on it, Mr. Knowlton explained in an interview. “Medicare patients also face uneven coverage for chemotherapy.”
Prior to the advent of Medicare Part D, coverage of oral chemotherapeutics was limited to oral drugs that had injectable counterparts that were covered under Medicare Part B, such as capecitabine (Xeloda). Part D coverage is not provided within the traditional Medicare program, and beneficiaries must enroll in 1 of the many Part D plans offered by private companies. Although virtually all oral cancer chemotherapies are included in formularies, out-of-pocket costs can vary by type of cancer, the mix of drugs prescribed, and the Part D benefit design.
“Health plans are finding that the only place to gain leverage is in increasing copays and deductibles” Mr. Knowlton commented. He pointed out that although he is not opposed to copays in theory, what is happening now is shifting cost. “It’s not cutting down utilization on unnecessary treatment . . . but simply shifting the cost over to the patient,” he said. “And it doesn’t make sense to put high copays on a drug that someone really needs, because in the long run, noncompliance may cost the health plan more money than paying for the drug.”
Why Are Costs Rising?
Patients face a double-edged sword when it comes to rising out-of-pocket costs; the rising prices of drugs, coupled with a larger out-of-pocket expenditure. Oral chemotherapy agents have been available for decades, but during the past few years, there has been an accelerated expansion in their development. According to a March 2008 National Comprehensive Cancer Network (NCCN) Task Force Report, an estimated one quarter of the 400 antineoplastic agents currently in the pipeline are planned as oral drugs (J Natl Compr Canc Netw. 2008;6[Suppl 3]:S1-S14).
The new oral chemotherapy drugs are considerably more expensive than those developed before1996. As an example, the NCCN report notes that the annual cost of lenalidomide (Revlimid) for a patient with multiple myeloma is $74,000. Imatinib (Gleevec), used to treat chronic myelogenous leukemia, ranges in cost from $29,000 to $57,000, depending on dosage, and accounts for the largest percentage of spending on oral chemotherapeutic agents. Although oral drugs still constitute only a small proportion of total pharmacy-benefit costs, spending on these agents more than doubled between 2002 and 2006, from 0.3% to 0.7%.
Medicare Part D
Individuals 65 years and older comprised more than 750,000 of the 1.4 million new cancer cases in the United States in 2008, and estimates from the National Cancer Institute state that Medicare accounted for 45% of all spending on cancer treatment in 2004. Therefore, Medicare’s handling of oral cancer drugs affects a large percentage of cancer patients. In addition, private insurers often take their cues from Medicare.
As it was originally set up, Medicare Part D covered the first $2000, with a 25% copay, followed by a $2850 coverage gap known as the “donut hole,” for which the beneficiary must pay out of pocket. When the $2850 has been fully paid, the beneficiary is then responsible for 5% of the remaining costs. This cycle restarts at the beginning of every calendar year. Because of the high cost of many oral cancer drugs, some patients will enter the donut hole after a single prescription.
In 2008, the Kaiser Family Foundation reported that these amounts had risen. The standard Part D benefit has a $275 deductible and 25% coinsurance up to an initial coverage limit of $2510 in total drug costs. The donut hole has now increased to $3216, which enrollees must pay out of pocket.
An analysis released in December 2008 by Avalere Health, a Washington, DC–based advisory-services company, and the American Cancer Society Cancer Action Network (ACS CAN), reported that cancer patients enrolled in Medicare Part D plans will have increased out-of-pocket expenses for oral drugs and face increased restrictions on access to them in 2009. Medicare stand-alone prescription drug plans (PDPs) have been increasingly and consistently shifting name-brand oral cancer drugs to higher formulary tiers over the past 4 years.
The majority of PDPs have now positioned these agents on tier 4, which is often a plan’s specialty tier and can charge coinsurance up to 33%. According to the Avalere–ACS CAN report, imatinib, sunitinib (Sutent), and erlotinib (Tarceva) all increased their coinsurance amounts, from 27% in 2006 to 33% in 2009. At the same time, copayment for generic tamoxifen remained stable, at just under $5.50.
The Avalere–ACS CAN report also found that in addition to altering tier placement, PDPs are increasing their use of prior authorization to control access to branded cancer drugs. As an example, imatinib had the largest increase in the number of PDPs requiring prior authorization, from 40% in 2006 to 76% in 2009. Erlotinib was a close second, with 62% of PDPs requiring prior authorization in 2009, up from 35% in 2006.
The difference in cost can be dramatic between oral and intravenous drugs.
“The difference in cost can be dramatic between oral and intravenous drugs,” said Lauren Barnes, vice president of product reimbursement and commercialization at Avalere Health. “Part B has a 20% copay, but supplemental insurance can completely cover that. Part D doesn’t permit supplemental insurance, and patients are 100% responsible for the donut hole.”
Tiered pricing is also common in private/commercial plans outside of Medicare. A 2007 analysis of prescription drug trends from the Kaiser Family Foundation found that 75% of people with employer-sponsored coverage had a cost-sharing arrangement with 3 or 4 tiers. This was over 2.5 times the proportion in 2000 (27%). Copayments for preferred drugs, including those in a formulary or preferred drug list, such as a brand-name drug without a generic substitute, increased by 67%, from an average of $15 in 2000 to $25 in 2007. Although the average copayment for a tier 4 drug was $71, coinsurance for tier 4 drugs averaged 20% to 25%.
Effect on Compliance
Adherence to an oral chemotherapeutic regimen can be a challenging commitment for many patients, with cost being just 1 of myriad factors, said Len Lichtenfeld, MD, MACP, deputy chief medical officer for the national office of the American Cancer Society. “It has been believed that most patients with cancer would take the drugs as prescribed, due to the nature of the illness. But that has not been the case.”
Although it was believed that cancer patients would be particularly motivated to comply with therapeutic guidelines, Dr. Lichtenfeld pointed out that adherence can be quite variable. “For example, tamoxifen has been in use since the 1990s, and research shows that patients have not been taking it as directed,” he told Medscape Oncology. “Some of the oral regimens can get very complicated, even for the most motivated patients and caregivers.”
In adult ambulatory care, overall adherence to chronic medication therapy is generally fair to poor, according to the NCCN report. Compliance rates for oral chemotherapy has been shown to vary considerably, ranging from less than 20% to 100%, and can be particularly challenging in certain populations, such as adolescents.
Adherence to parenteral therapy is far more straightforward because it is administered in a controlled environment. Conversely, compliance with oral therapy is a more complex and multifaceted issue. In a 2002 analysis (J Natl Cancer Inst. 2002;94:652-661), Eric P. Winer, MD, of the Dana-Farber Cancer Institute in Boston, Massachusetts, and colleagues found that factors associated with nonadherence to oral medication regimens — complex treatment protocols, inadequate supervision, dissatisfaction with care, inadequate social support — required substantial changes in behavior.
The paper was published prior to the implementation of Medicare Part D, and there has been an increase in the number of oral cancer drugs available since that time. In that paper, the authors reported that there was limited information available on the effect of the cost of therapy on adherence.
“I don’t think we know how much cost plays a role in compliance, but it is an issue that cannot be ignored,” Dr. Winer told Medscape Oncology. “This is particularly true with a potentially growing population of uninsured in our present economic environment, a growing population of underinsured, which includes those who fall into the Medicare donut hole, and the increasing cost of many anticancer agents.”
This is an issue that is going to have to be dealt with, said Dr. Lichtenfeld. “We are going to have more oral drugs and that is going to influence the economics of cancer care and how we deliver it,” he said. “We need to understand what is happening in the real world and how patients will be able to afford these therapies and stay compliant with them.”
On the Legislative Front
There is gathering momentum to change the system, according to Ms. Barnes of Avalere Health, but no quick fixes. One option is to move oral chemotherapy from a pharmacy benefit to a medical benefit, which would improve coverage and reduce out-of-pocket expenses. Other options are being discussed, explained Ms. Barnes, and changes might need to originate in the private sector.
Even though commercial payers usually tend to follow Medicare’s lead, in this case, it might be the other way around. “Any changes in Medicare have to go through Congress,” she said, “so that does present some challenges and can take a long time. We may see overall health reform at some point, but we don’t know if this situation is going to be ‘fixed’ anytime soon.”
Commercial insurers might be interested in revisiting this issue because, although it might be more expensive upfront, providing better coverage for these oral therapies could save them more money in the long run, explained Ms. Barnes. “If patients have better compliance, that may prevent complications and hospitalizations,” she said. “It’s looking more at the long term, but it will reduce the cost to the whole system.”
Political action is already occurring at the state level. At the beginning of 2008, Oregon became the first state to require that health insurance carriers that offer coverage for parenteral chemotherapy offer equivalent coverage for orally administered medications. Other states, including Hawaii, Minnesota, Montana, Oklahoma, and Washington, are considering similar legislation. However, a recent proposal that required health insurers to cover the cost of oral chemotherapy as a medical benefit in Colorado was voted down by their House Health and Human Services Committee in a 7 to 4 vote.
Mr. Knowlton pointed out that the main problem is one of access. “We have some of the best healthcare in the world here in the [United States], but not all of us can access it,” he said. “We are hoping that we will see healthcare reform that will change that.”
“We are happy to be part of a safety net that allows patients access to their medications,” he added. “But what we’d really like to see is a safety net that puts HealthWell out of business.”
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