Value-Based Oncology: The Intersection of Drug Costs, Effectiveness, and Toxicity

William K. Fleming, PharmD; Bryan Loy, MD, MBA; Roy Beveridge, MD

July 2015, Vol 6, No 6 - VBCC Perspectives


Value-based oncology was one of the high-profile topics at the 2015 American Society of Clinical Oncology (ASCO) meeting. It is something that is discussed widely in print and on social media. It is certainly top of mind for payers, doctors, policymakers, business leaders, and, in particular, patients.

The war on cancer, as declared in the 1970s, has been remarkably effective for many of the malignancies we face. The next battle is how we, as a society, fund these treatments, which are rapidly escalating in price.

The leading cause for bankruptcy in the United States is directly related to having been hospitalized with a serious illness. Humana’s evaluation of specialty drug allocation, which is consistent with other payers, suggests that by 2020, 50% of the total drug spending will be directly related to specialty pharmaceuticals; this does not include medical spending, only pharmacy spending. And this 50% that we spend on specialty drugs will be consumed by <2% of the US population.

This has widespread implications, certainly for the patient using specialty drugs, in terms of affordability and medication adherence. If left unchecked, however, each of us could feel the result in higher premiums.

With that in mind, we applaud the attempts made by Memorial Sloan Kettering Cancer Center (MSKCC) and ASCO to help the physician educate his or her patients about the effectiveness, toxicity, and cost of various treatments. MSKCC’s DrugAbacus and ASCO’s value framework open up discussions about cost transparency, which patients are clamoring for, as well as get us talking about efficacy and toxicity.

Although we can debate the pros and cons of these new tools and methodologies, it is at this intersection of drug cost, effectiveness, and toxicity where our healthiest discussions occur. Helping patients understand what to expect, from a treatment effect and a payment standpoint, is paramount in managing their disease.

Payers are reflections of what society as a whole expects to pay for medical services. Our members tell us that they want a continued focus on cost transparency and effective treatments that lead to higher quality care and healthier outcomes. The MSKCC tool and the ASCO methodology are important first attempts at helping our society do that, because these conversations are not consistently taking place today.

Each of us has a role in ensuring that we, as a society, get the best value from the healthcare dollars being spent. This requires moving these early discussions into action, recognizing that pharmaceutical companies have a significant responsibility to work with us all to price drugs that the market and society can bear.