IOM Strategies for Lowering Out-of-Pocket Costs of Cancer Drugs

Rosemary Frei, MSc

April 2015, Vol 6, No 3 - Economics of Cancer Care

At a June 2014 Institute of Medicine (IOM) workshop on patient access to oncology drugs, several cancer experts discussed various strategies on how to lower out-of-pocket (OOP) costs of oncology drugs for patients with cancer.

It is essential for oncologists to engage patients in discussions about the OOP costs of their medications, suggested S. Yousuf Zafar, MD, MHS, Associate Professor of Medicine, Duke Cancer Institute, and Duke Clinical Research Institute, Durham, NC.

In an interview with Value-Based Cancer Care (VBCC), Dr Zafar said that discussions about cost are becoming more necessary than ever.

Financial Toxicity a Continuing Theme in Oncology

“Patients are experiencing financial toxicity as a result of their cancer treatment. We talk to patients about the physical side effects, but we don’t often acknowledge the financial side effects,” said Dr Zafar. “It is the healthcare team’s responsibility to bring it up at least once with each patient.” He is currently developing an app to help patients with cost discussions.

At the IOM workshop, Dr Zafar pointed out that the rapid rise of OOP cancer care costs has been accompanied by a cost-sharing increase in most health insurance plans: premiums increased by 182% between 1999 and 2013, and worker contributions to premiums nearly doubled in the United States.

In a 2013 survey conducted by Dr Zafar and colleagues, almost 50% of the patients with cancer surveyed had reduced their spending on food and clothing to allow them to pay for cancer-related costs. Moreover, 24% of the patients did not fill their prescriptions, and 20% took less than the prescribed amount.

Changes Needed

Dr Zafar also noted that the power of private payers, hospitals, and oncologists and other healthcare providers pales in comparison to that of Medicare. Therefore, all their efforts “won’t make a lick of difference if we don’t have Medicare involved in this as well,” Dr Zafar said at the IOM workshop.

Increasing frequent drug shortages, along with the rise in the use of oral formulations and of biologics, are among the main drivers of increased oncology drug costs, said IOM workshop participant, Alex Bastian, MBA, of GfK Bridgehead, San Francisco. Within the past year or two, biologics already comprised 55% of cancer drugs, Mr Bastian said.

Value versus Cost

Cost-sharing arrangements in insurance plans are also far from optimal, noted workshop participants. A. Mark Fendrick, MD, Director, Center for Value-Based Insurance Design, University of Michigan, Ann Arbor, said that most beneficiaries pay the same percentage for every drug within a formulary tier, regardless of efficacy.

“This one-size-fits-all benefit design fails to acknowledge the differences in clinical value among medical interventions and makes no sense,” Dr Fendrick said, noting that more widespread use of value-based insurance design would rectify this problem.

Some of the many other points made by workshop participants are listed in the Table.


Physician–Patient Interaction Is Key

Dr Zafar was persistent about the physician–patient interaction as an impor­tant factor toward lowering the use of high-cost cancer drugs.

“Until we can get prices under ­control, encouraging communication around cost is a first and fairly easy step,” Dr Zafar emphasized.

The web-based app Dr Zafar is pilot-testing points to patient support programs and other resources to help patients with staggering large copays, and educates them on communication theory.

“For example, instead of saying to your doctor, ‘I can’t afford my care,’ which can be a difficult point to tackle, because it’s so broad, a better statement may be, ‘I have difficulty paying for my copay for the drug,’” Dr Zafar told VBCC.