Dissecting the Cost of Targeted Therapies in Oncology

Dana Taylor

August 2015, Vol 6, No 7 - Economics of Cancer Care

Chicago, IL—It is not a surprise that targeted therapies are the main drivers of spending on anticancer drugs in the United States. At the 2015 American Society of Clinical Oncology meeting, researchers presented data from several major cancer centers about the cost of targeted therapies.

Expenditures related to targeted therapies exceed $10 billion annually in the United States. Benefit design by payers plays an important role in trying to control costs, including what patients pay out of pocket, and these strategies differ for oral versus intravenous (IV) chemotherapies.

“We found that the average insurance payment per month for targeted oral therapies has skyrocketed, from just over $3000 a month to $7000 in a 10-year period,” said Fabrice Smieliauskas, PhD, MA, of the University of Chicago, IL, who presented the results of his poster about payer trends, utilization, and out-of-pocket costs for privately insured patients receiving oral and IV chemotherapy.

“It’s not one single drug,” Dr Smieliauskas emphasized. “The price of Gleevec rose from $30,000 to $92,000 over 10 years. That’s a high-selling drug and may be a main driver, but on average, all the drugs we sampled displayed this tendency.”

Insurance payments for targeted IV drugs, on the other hand, “started high,” at nearly $7000 monthly, but remained steady at this price through 2010.

The out-of-pocket costs of oral drugs were the lowest among all chemother­apy types. “Targeted IV drugs have a much higher out-of-pocket cost, because, at least in this sample, they were likely to involve coinsurance (usually, 20%). Oral drugs were covered under a fixed copay,” Dr Smieliauskas explained.

Because of this, he maintained, “the notion of oral drug parity laws is misguided for this patient population…Oral drug parity could actually make the financial toxicity worse for patients.”

As hospitals purchase physician practices—increasing billing rates for targeted IV anticancer medications—oral versus IV differences in out-of-pocket spending will continue to grow, the researchers noted.

Study Details

The study population was drawn from the LifeLink Health Plan Claims Database, representing approximately 70 million individuals from more than 80 US health plans, many of them employer-sponsored. The analysis included 200,168 nonelderly patients with cancer (mean age, 52 years) who received treatment between 2001 and 2011 with targeted oral anticancer medications, targeted IV medications, and others.

The costs were presented as cancer drug expenditures per patient per month, normalized to 2013 US dollars.

The study showed a steady growth in the use of targeted oral agents, rapid growth and then leveling off for targeted IV agents, and a consistent decline in the use of nontargeted agents until 2008, followed by a plateauing.

The investigators found that the total cost for chemotherapy of any kind, per patient, increased by $7765 between 2001 and 2005, and by $6846 between 2005 and 2010, primarily as a result of the heavy use of new drugs. For the more recent time period, the launch price of new agents increased by $1016, and this accounted for 15% of the increased cost of treatment. The drugs’ prices also increased by more than $700 after launch.

“The targeted agents cost more when they launch, but also, the price goes up further after they launch,” Dr Smieliauskas noted.

The analysis did not include immunotherapies. “Things will go bonkers when we include those,” Dr Smieliauskas suggested.