The Challenges of Paying for Cancer Care Will Only Get Worse

Jessica Miller

November 2016, Vol 7, No 10 - Value in Oncology


Boston, MA—The issues surrounding the cost of cancer care are large and looming in today’s healthcare landscape, but these problems are nothing compared to what is coming, according to Amitabh Chandra, PhD, Director of Health Policy Research, Harvard Kennedy School of Government, Cambridge, MA, who spoke at the War on Cancer forum organized by The Economist.

Study the Pipeline

“If we think we are going to have problems or challenges in how we pay for cancer care today, today’s problems are going to be mosquito bites relative to the challenges that await us in the future,” he said.

According to IMS Health data presented by Dr Chandra, approximately 6020 therapies are being researched by large biopharmaceutical companies; of these, 50% are in preclinical stages and approximately 450 of them are currently in clinical trials. More than 25% of these agents are for cancer, and most tend to be for biologics. If we know what is coming, we should begin to prepare now, Dr Chandra advised attendees.

He hopes that oncologists will learn from the missteps surrounding the launch of the hepatitis C drug sofosbuvir (Sovaldi).

“Many people knew that the drug was about to launch, but the 50 state Medicaid directors kind of had their heads in the sand about the launch,” Dr Chandra said. This had a major impact on budgets that had been determined before the release of the drug and did not take into consideration the high cost of the new treatment.

“We shouldn’t wait for the future. We should look into the pipeline and get some sense of what these drugs look like, and what they do,” Dr Chandra advised.

Looking ahead, the expected arrival rate of combination therapies and immuno-­oncology agents will increase, and we should begin to prepare now, he added.

Expect More Combination Therapies and Immunotherapies

“Right now in 2016 were saying ‘Boy, we’re having a really hard time making sense of this incredibly crowded immunotherapy space,’ and we’ve got something like 15 new immunotherapy agents,” Dr Chandra said. “In 5 years we’re going to be seeing something like 34 of these combination therapies and immuno-oncology agents hitting the market place,” he emphasized.

“Even if we figure out how to pay for these drugs, the great cancer centers in the United States and the oncologists who work within them are going to have to make sense of which drug is right for which patient, which is quite different than figuring out how we pay for these drugs,” he continued.

Dr Chandra suggested the creation of physician export systems that will figure out which drugs are the right choice for specific patient groups.

Don’t Wait for the Future

In addition to new technology, Dr Chandra highlighted several areas he believes the industry should focus on now to prepare for future changes, including:

  • Biosimilars
    As more biosimilars are coming to the market, the potential for cost-savings is great
  • Medicare Part B payment reform
    Dr Chandra thinks it is a terrible idea that oncologists are “paid a tip” for prescribing drugs, and Medi­care Part B payment reform has the potential to change prescribing incentives
  • Innovative pricing
    The idea of drug mortgages and spreading risk over time and across more people should be explored
  • Bundled payments
    These have the potential to eliminate wasted inefficiency by reducing the number of unneeded surgeries and procedures
  • Physician-led programs
    Programs developed and backed by physicians are going to succeed more quickly than government-led programs.

Indication-Based Pricing

Indication-based pricing also has the potential to affect healthcare costs in the future, Dr Chandra said, especially as precision medicine options continue to emerge.

“There’s a huge opportunity for this in a world where we have more precision medicine. If you know that a drug works better in a particular mutation then you can charge more, and charge less for the patients who don’t have that mutation,” he pointed out.