ONCOLOGISTS CRITICIZE HOSPITAL CANCER DOCTORS’ RX PRICE CONTROL PROPOSALS

Community oncologists say the drug-price control recommendations by 118 cancer doctors that made national headlines last week are misguided because most of the doctors behind the suggestions work for large, teaching hospitals where cancer care is more expensive than at cancer clinics. Drug makers also criticized the recommendations for singling out drug prices, which account for about a quarter of cancer treatments and 1 percent of health care spending overall, and the Pharmaceutical Research and Manufacturers of America highlighted the patient-assistant programs that drug makers offer, although Gilead, which makes the hepatitis C medications that rekindled the drug-price debate, recently limited its patient assistance program.

Last week, the group oncologists published recommendations for reducing the high cost of cancer drugs in the journal Mayo Clinic Proceedings. The recommendations include many of the controversial proposals that have been around for more than a decade, such as letting Medicare negotiate drug prices, allowing drug imports and banning so-called pay-for-delay settlements between brand and generic drug makers.

Unlike PhRMA, Community Oncology Alliance Executive Director Okon said it's right-minded to work on policies that would lower drug costs, but he said doctors working at institutions with high cancer care costs should lower their own costs before criticizing others.

"My line here is 'Physician, heal thyself," Okon said.

Most of the doctors who endorsed the recommendations in the journal are employed by large teaching institutions, many of which receive 340B drug discounts, and nearly 30 percent of the signatories are employed by a small group of hospitals where cancer care is high even compared to teaching hospitals, he said.

There are 11 hospitals that Medicare reimburses based on their reported costs, instead of paying them like all other hospitals based on a predetermined amount for the clinical classification of services they provide. The Government Accountability Office reported in February that these 11 hospitals charge Medicare higher prices to treat cancer patients that aren't much sicker or more complicated than patients treated at teaching hospitals that are reimbursed based on the Medicare fee schedule. Based on data from 2012, the most recent available for the study, GAO found that Medicare would have saved $500 million had reimbursement for those hospitals been based on the prospective pay system that determines pay for all other hospitals. Of the 118 oncologists to sign the recent journal article, 34 work at one of those 11 cancer hospitals.

Okon said the 340B drug discount program drives up drug prices because discounts are never free. Independent outpatient oncology practices are not eligible for the 340B Program. The discount program gives hospitals the incentive to overuse expensive drugs, Okon said, and a recent GAO report supports that position. He also believes the discounts are drying up the market for generic injectable cancer drugs.

Okon said streamlining FDA drug reviews would create more competition, and the House-passed 21st Century Cures Act would be a good start. Rather than attack drug spending by itself, the Community Oncology Alliance supports H.R. 1934, which would create an Oncology Medical Home demonstration. The bill is cosponsored by Reps. Cathy McMorris Rodgers (R-WA) and Steve Israel (D-NY).

"Rather than isolate the 20-25% of cancer care costs attributed to drugs, we are targeting at least 75-80% of cancer care costs," Okon said in an email. "Additionally, by keeping cancer care in physician-directed community cancer clinics we are controlling costs more than anything that can be done to just control drug costs."

PhRMA also criticized the Mayo Clinical Proceedings commentary. The proposals in the journal would stop drug companies from inventing drugs and halt decades of progress in cancer care, the drug lobby group says. Cancer drugs represent a small share of overall health care spending and plans already often restrict the use of oncology medicines, PhRMA adds.

"This violates the basic purpose of insurance, and is why improving coverage for medicines needs to be a top priority for policymakers," PhRMA states. "At the same time, we continue to work directly with patients to help them get access to the medicines they need."

However, the Wall Street Journal reported that Gilead recently restricted its patient access program because it believes plans are taking advantage of it by denying hepatitis C medication to patients, which in turn has forced patients to enroll in Gilead's patient assistance program.–John Wilkerson