Medicare Costs for Cancer Drugs Nearly Doubled in Past 4 Years

Roxanne Nelson, RN, BSN

July 19, 2022

Spending for oncology drugs markedly increased from 2016 to 2020 for Medicare Part B and D, and this was observed both overall and per person, according to a new analysis.

Oncology drugs that are delivered via infusion are covered under Medicare Part B, but with the development of oral medications, coverage for some drugs shifted from Part B to Part D, which provides coverage for outpatient prescription drugs. Many of these drugs have very high out-of-pocket costs, which may be contributing to financial toxicity, note the authors

"These findings underscore the need for attention to the accelerating costs of oncology drugs — particularly oral drugs — and diminishing affordability for patients and the Medicare program," say the authors, led by Michael Anne Kyle, PhD, RN, Department of Health Care Policy, Harvard Medical School, Boston, Massachusetts.

The study was published in a research letter July 13 in JAMA Network Open.

The rising costs of cancer drugs has been a hot topic of discussion for some time and has been reported extensively on Medscape Medical News. The escalating price tags on the drugs rolling off the production line is "unsustainable," and "we must acknowledge that there must be some upper limit to how much we can, as a society, afford to pay to treat each patient with cancer," one expert has commented.

Spending Reflects Increased Drug Costs

In the current study, Kyle and colleagues examined cancer drug costs in Medicare Parts B and D to evaluate trends in oncology drug use and spending over time, as well as to determine what share of total cost could be attributed to oncology products.

They used data from the 2016–2020 Medicare Parts B and D Drug Spending Dashboard Public Use Files and the Oncology Care Model drug lists, which are current through 2021, to identify oncology medications.

During the study period, the share of all Part B drugs used for oncology indications rose slightly from 20.0% to 22.5%. Among individual Medicare recipients, the proportion who use oncology drugs remained relatively unchanged (from 3.0% to 3.2%). However, the proportion of costs for oncology drugs increased from 33.7% to 43.1%.

The same pattern emerged for Part D drugs. The authors found that the share of agents used for oncology indications increased slightly from 3.1% to 3.9% from 2016 to 2020. Even though the proportion of patients who received oncology drugs remained consistent at 0.6%, the proportion of Part D spending increased from 9.1% to 13.2% from 2016 to 2020.

Cost Per Beneficiary Nearly Doubled

At the beneficiary-drug level, spending for both Part B and Part D nearly doubled for oncology drugs. Overall spending for Part B drugs rose modestly overall, as well as for non-oncology drugs, but median annual cost for oncology drugs per beneficiary doubled during the study period, from $9325 to $18,761. A similar increase was seen in Part D, in which median spending escalated from $27,761 to $52,016 per beneficiary.

The proportion of oncology drugs covered by Part D vs B increased slightly over time, reflecting the rising use of oral therapies. Of 181 oncology drugs listed in 2016, 84 (46.4%) were covered by Part D. Of 277 drugs in 2020, 141 (50.9%) were covered by Part D.

The authors conclude that Part D accounts for an increasing share of new drugs "whose high and rising out-of-pocket costs may contribute to financial toxicity and non-initiation of or nonadherence to oral therapies. This has consequential policy implications: efforts to cap patient out-of-pocket spending in Part D may disproportionately benefit people with cancer, given these coverage dynamics."

The study was supported by a training grant from the National Cancer Institute (NCI) and by grants from Arnold Ventures LLC and the Commonwealth Fund. Kyle received grants from the NCI during the conduct of the study. Dusetzina received grants from Arnold Ventures LLC, the Commonwealth Fund, and the NCI during the conduct of the study; he has received grants from the Robert Wood Johnson Foundation and the Leukemia & Lymphoma Society and personal fees from the Institute for Clinical and Economic Review, West Health, and the National Academy for State Health Policy outside the submitted work; he serves on the Medicare Payment Advisory Commission. Keating received grants from the NCI, the Centers for Medicare & Medicaid Services, Arnold Ventures LLC, and the Commonwealth Fund during the conduct of the study. No other relevant financial relationships were reported.

JAMA Netw Open. Published online July 13, 2022. Full text

Roxanne Nelson is a registered nurse and an award-winning medical writer who has written for many major news outlets and is a regular contributor to Medscape.

For more news, follow Medscape on Facebook, Twitter, Instagram, and YouTube.

Comments

3090D553-9492-4563-8681-AD288FA52ACE
Comments on Medscape are moderated and should be professional in tone and on topic. You must declare any conflicts of interest related to your comments and responses. Please see our Commenting Guide for further information. We reserve the right to remove posts at our sole discretion.

processing....