How to Increase Access Cancer Drugs Discussed at NCCN Meeting

Kerry Dooley Young

September 25, 2018

One way to increase access to expensive new cancer therapies is to restrict how many of them are available, suggested a former insurance executive noted for his research on oncology. Another is to look again at hospital consolidation, which is driving up the costs of cancer drugs.

These ideas came from Lee N. Newcomer, MD, MHA, formerly of UnitedHealthcare, who was speaking recently to a National Comprehensive Cancer Network (NCCN) working group.

Newcomer has also advocated for use of broad datasets on patients' experience to judge the value of cancer medicines, including costly new drugs. He discussed this idea earlier this year at the NCCN's annual meeting, where it was met with modest applause, as reported at the time by Medscape Medical News.

Leaders within the organization asked him to elaborate on his ideas at the recent NCCN working group meeting, which set out to address policy challenges and opportunities in cancer care. That meeting was held on September 13 in Washington, DC. The group's final findings and recommendations will be published early next year in the Journal of the National Comprehensive Cancer Network.

Oncologists in recent years have experienced a rising level of frustration at the high cost of medicines, especially newer drugs. Among the tasks for the NCCN's working group is to develop standardized metrics and to consider a shared definition of value in collaboration with patients and insurers.

Restricting Drugs Within Same Class

One way to help ensure that more patients have access to the new costlier therapies would be to restrict how different cancer drugs of the same class are covered by insurance, said Newcomer.

"We don't need to cover them all, and we could introduce competition into the system," Newcomer said, noting that many rules now in place mandate coverage of all cancer drugs. "This is a protected system without competition, and the unintended consequence is that prices are now becoming so high that patients can't access the therapies."

Medicare and other major federal programs cover all cancer medicines, regardless of their efficacy or cost, and more than 40 states have rules on commercial insurers that also mandate coverage, he said.

The demand for broad coverage of oncology therapies began several decades ago, Newcomer noted, when there were concerns about women being denied bone marrow transplant for breast cancer — a treatment that is no longer used because it was shown to be harmful.

There were good intentions behind these laws, but the consequence has been that the costs of cancer drugs spiraled, he said.

"As long as you have an FDA [US Food and Drug Administration] approval, coverage is guaranteed" in many states and through federal programs, he said.

Newcomer offered as an example the emerging class of drugs that target lung cancer with the anaplastic lymphoma kinase (ALK) gene rearrangement as a category for which insurers could seek to apply leverage.

He found a 30-day supply of crizotinib (Xalkori, Pfizer) can cost about $15,900. Two members of the same drug class cost less: ceritinib (Zykadia, Novartis) costs $15,300, and alectinib (Alecensa, Hoffman-La Roche) costs about $14,000. A similar drug in that class, brigatinib (Alunbrig, Takeda/Ariad), costs $20,000. All four medicines are recommended for people with lung cancer that exhibits the ALK gene rearrangement.

"As a physician turned businessman, I'm saying, why can't we put out a competitive bid and knock one of these folks out?" Newcomer said.

Newcomer urged a modification of the policy that forces insurers to cover every drug in a class.

"You could pick the best two, you could pick the best three, and if a drug clearly has superior performance, then it better be there" on the list of covered medicines, Newcomer said.

Hospital Consolidation

Hospital consolidation is another key driver of cancer costs, said Newcomer. In many parts of the United States, one or two hospital systems dominate the market, greatly reducing the leverage that insurers have to negotiate prices. These hospital systems often have acquired many or most local cancer practices, further strengthening their economic position, he said.

Although private practices may add a 28% markup to the cost of cancer drugs, oncology practices connected with hospitals may add a markup of 156%, he said. (This disparity applies only to the costs charged to people with commercial insurance. Medicare regulates the profit margin on drugs, he said. The program is intended to add a premium of about 6% to the reported average sales price of medicines administered by physicians. Federal budget law shaves this to about 4.4%)

Newcomer recalled an incident that happened shortly before he retired this year from UnitedHealth, where he had served as senior vice president for oncology, genetics, and women's health. He said he got a call about a claim for almost $999,000 for a cancer drug that had a wholesale price of about $60,000. He checked with the hospital, thinking that an error had been made.

"They reviewed the bill and said, 'No, that's our price, that's our charge,' " Newcomer said.

Hospital executives defend the markup on cancer treatments by saying that they need to offset losses in other departments, such as the emergency department, Newcomer said. He argued for a serious examination of the causes of those financial shortfalls.

"Should this cancer patient carry the burden for a healthcare system that is broken somewhere else? I believe no," he said. "We need to think about how we can be better at compensating areas that aren't making money without burdening one individual group."

Newcomer suggested that the Federal Trade Commission might look at the effects of hospital consolidation on consumers, or that new regulations might be used to address the margins for cancer drugs.

"Something clearly has to happen if we expect the cancer patient to get a fair shake," he said.

Large Datasets

Newcomer also emphasized the need to better understand how well cancer drugs work, beyond the initial studies of clinical testing. The general population of cancer patients tends to be in worse health than patients who are selected for clinical trials. Many patients in the clinic have comorbidities, such as emphysema and heart disease, he said.

"The hard fact of the matter is — and any clinician in the country will tell you this — that if they are a little sicker, they aren't going to do as well," he said.

Public and private organizations are accumulating large sets of data that may yield a clear picture of how effective different drugs are, although this approach has some drawbacks, Newcomer said. The American Society of Clinical Oncology, firms such as Flatiron Health, and insurers such as UnitedHealth and Anthem Inc are among those involved in these efforts.

Data would be drawn from billing information as well as clinical records, he said. Looking at the accumulated reports should give physicians and patients a good idea of how well drugs actually work in the real world.

If insurance coverage was not mandated, insurers could then seek to renegotiate the prices of drugs that did not appear to do as much for patients, Newcomer said.

Although this information would be valuable for physicians and patients, it is powerful, and the development of such information would likely meet strong resistance, he said.

"I'm very concerned that this will get regulated out of existence. This is not perfect data," Newcomer said. "There are going to be errors in that. But when you start getting large numbers of patients, those errors would smooth out pretty fast."

Dr Newcomer holds shares in UnitedHealth and has received speaker's fees from the NCCN.

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