The Promise of Oral Anticancer Agents: Addressing Compliance and Affordability

By Rhoda Dunn and Gordon Gochenauer

 

Sales of oral cancer drugs have more than tripled to $20.6 billion in five years and now account for 25.9% of total global oncology drug sales.[1] Physicians and patients appreciate the targeted nature of most oral drugs, which tend to confer better tolerability than traditional chemotherapy combined with strong efficacy results (particularly in diseases such as CML, BRAF-mutated melanoma, and ALK-positive NSCLC for which a single protein is strongly correlated with the disease). Although most physicians can appreciate the convenience of oral cancer treatments for patients, it remains unclear whether prescribing and patient use of oral drugs has been optimized.

A 2012 Kantar Health survey of 150 oncologists showed that 48% of respondents would be more likely to prescribe an oral drug over an IV drug assuming clinical equivalence. This percentage is up from 40% two years ago. The reasons for the increased likelihood to prescribe an oral drug, in ranked order, are 

However, concerns about patient compliance, safe handling, and affordability continue to place orals at a disadvantage relative to IV equivalents or alternatives. Based on these findings, there is room to improve oral drug utilization by addressing compliance and affordability concerns.[2]

Affordability Concerns

Drug affordability continues to challenge physician prescribing, prescription fulfillment, and patient compliance despite efforts to close the Medicare donut hole, neutralize the impact of out-of-pocket (OOP) burden on treatment choice through patient assistance programs (PAPs), and introducing oral parity legislation.

The issue of affordability may become even more acute in 2014, when the individual mandate requiring certain individuals to purchase health insurance or be subject to an additional tax is expected to go into effect, although some patients will benefit from a maximum OOP limit for oral drugs. Using healthcare reform in Massachusetts as a proxy for what might happen with national health reform, the Affordable Care Act (ACA) may simply replace uninsured patients with underinsured patients. 

Although cost share for drugs at the point of service has generally decreased in Massachusetts, premiums and deductibles are rising and are front-loading costs such that patients may not be able to afford the care that would lead to a prescription.[3-5] Moreover, many patients who would otherwise have received free care, face cost sharing challenges for drugs alongside potential premiums and deductibles.[3-5] As a result, a growing share of Massachusetts residents spend a larger percentage of their incomes on total healthcare costs, and the number of residents facing medical debt and bankruptcy has not declined.[3-5]

In July 2012, it was announced that manufacturers will be allowed to offer co-pay assistance to commercially insured Massachusetts residents. Kantar Health speculates whether this change in stance is a consequence of growing underinsurance in the state. An increase in the number and degree of underinsured patients may require that manufacturers revisit the structure of free drug and co-pay assistance programs. A question for the lawyers is whether there is a point at which an “underinsured” patient can reasonably be reclassified as “uninsured.”

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[1] Internal Kantar Health analysis based on EvaluatePharma data.

[2] Kantar Health; Oncology Market Access US, Oncologist Survey, 2012.

[3] The Massachusetts Model of Health Reform in Practice And the Future of National Health Reform. Mass-Care and PNHP. October 2011.

[4] Health Connector Web site: www.mahealthconnector.org. Accessed June 13, 2012.

[5] Health Connector Report to the Massachusetts Legislature: Implementation of Health Care Reform Fiscal Year 2011. November 2011.

 

The Promise of Oral Anticancer Agents: Addressing Compliance and Affordability (continued)

Impact of Cost Sharing on Medicare Part D and Commercially Insured Patients

Medicare patients with Part D prescription drug plans (PDPs) have struggled with cost sharing since the program went into effect in January 2006. The 2006 Part D benefit was designed so that after reaching a $250 deductible, seniors would have to pay 25% for drug costs between $250 and an initial coverage limit (ICL) of $2,250. Upon reaching this ICL, seniors would not have any coverage until incurring OOP costs for covered drugs in a year equal to $3,600. This period of no coverage is often referred to as the donut hole. 

Upon reaching $3,600, beneficiaries would achieve catastrophic coverage whereby they are subject to a 5% coinsurance for each of their prescriptions (or $2 for a generic drug; $5 for any other drug, whichever is greater). These levels have risen over the years, but the tri-level design remained in place until passage of the ACA which also includes provisions to close the donut hole, resulting in a two-level program (Figure 1).

Figure 1. Filling the Donut Hole: Drug makers contribute through discounts to patients in Medicare Part D coverage gap.

In 2010, seniors with a Medicare prescription drug plan who entered the donut hole received a one-time, tax-free $250 rebate from Medicare to help pay for their prescription drugs. As of January 1, 2011, beneficiaries in the donut hole received a 50% discount on covered brand-name drugs paid by manufacturers and 7% discount on generic drugs paid by the government. This year the discount for generic drugs in the donut hole increased to 14%. 

Between now and 2020, the donut hole will be eliminated. The government will pay half of the remaining 50% cost share, meaning that patients will be subject to a 25% cost share in the combined ICL and coverage gap period. Many oral cancer drugs cost enough to move patients through this initial coverage period with the first fill, assuming a patient can afford the coinsurance for a high-cost prescription. However, even the 5% cost-share level once in catastrophic coverage may be too high for many seniors who are often on fixed incomes. Finally, it is important to note that catastrophic coverage only lasts through the end of the calendar year and that cost sharing on the Part D benefit is uncapped.[6]

As with Medicare Part D, commercially insured patients face high uncapped prescription drug benefits. The Kaiser/HRET study of employer benefits found that between 51% and 82% of plans do not count prescription drug cost sharing toward their maximum OOP.[7] Not surprisingly, treatment abandonment rates for oral anticancer drugs are high across both Medicare beneficiaries and commercial plan members. 

In a study involving 1,737 Medicare beneficiaries and 8,771 commercially insured patients, approximately 25% of patients who were prescribed an oral cancer drug with an OOP expense exceeding $500 (n=1,727) abandoned therapy on the initial claim versus 6.4% of patients with an OOP cost of $100 or less (n=7,638). Insurance status contributed to likelihood to abandon treatment. Sixteen percent of Medicare beneficiaries’ claims were abandoned versus 9% of commercial claims (P<0.05).[8] This difference is perhaps explained by the observation that patients with Medicare PDP or Medicare Advantage plans had higher cost sharing than patients with commercial insurance.

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[6] Centers for Medicare and Medicaid Services

[7] The Kaiser Family Foundation and Health Research & Educational Trust Employer Health Benefits 2011 Annual Survey.

[8] Streeter S, Schwartzberg L, Husian N, et al. Patient and Plan Characteristics Affecting Abandonment of Oral Oncolytic Prescriptions. Oncol Pract. 2011;7(3 Suppl):46s–51s.

 

The Promise of Oral Anticancer Agents: Addressing Compliance and Affordability (continued)

Patient Assistance Programs

PAPs (which may include free-drug programs), and commercial co-pay assistance and independent foundations provide financial assistance help to ensure that financial considerations do not interfere with medication prescribing, uptake, and persistence. PAPs are particularly important in cancer because cost sharing can be quite high, rendering a patient underinsured very quickly. 

In 2005, The Commonwealth Fund defined people as underinsured if they are insured all year but experience medical expenses that are at least 10% of their income (or at least 5% if their income is less than 200% of the federal poverty limit [FPL]) or whose deductibles are at least 5% of their income.[9] Efforts to update this definition will be challenging until all states have defined their essential health benefits, which may take until 2016 or longer.

PAPs may be provided directly by the manufacturer via a free-drug program or a cash-assistance program or indirectly via an independent charitable 501(c)3 disease foundation. The type of program appropriate for any given patient usually depends on income and insurance status (i.e., uninsured, federally insured, or commercially insured). 

Meanwhile, manufacturers typically provide direct assistance to uninsured patients who meet clinical and income eligibility requirements. Income requirements are usually calculated as an adjusted percentage of the FPL. For federally insured patients, the landscape is more complex due to Office of Inspector General (OIG) issues around beneficiary steering, anti-kickback, and false claims. 

Manufacturers cannot give cash assistance to federally insured patients to pay for co-payments or coinsurance or to help them through the donut hole. Instead manufacturers may set up disease funds or contribute to existing disease funds run by 501(c)3 foundations that provide financial assistance to income- and diagnosis-eligible underinsured patients. Donations to such funds are diagnosis-specific and cannot be allocated for a specific drug or class of drugs. Alternatively, a manufacturer may provide free drug for qualified patients who enter the donut hole under certain conditions. However, free drug does not move patients through the donut hole, but merely delays the issues presented by the donut hole for the next prescription. 

For commercially insured patients, manufacturers have more flexibility. While there is still concern over anti-kickback laws, the level of scrutiny is not as high as for patients with federally funded insurance. Manufacturers can set eligibility to account for drug characteristics (ie, oral vs IV), payer mix, and competitive landscape, regardless of income. However, most programs do have income thresholds to control costs.

Understanding the Insurance Mix

The insurance mix of patients who utilize PAPs does not reflect the insurance mix of people with cancer (Figure 2). Practice administrators in community practices estimate that 32% of patients who are in PAPs are commercially insured—an increase from 27% in 2010. The uninsured accounts for more than a quarter. Federally insured make up the remainder. 

Understanding the insurance mix of a product and the needs of each coverage segment will help manufacturers optimize the structure of a PAP as well as better understand how much support to provide. Additionally, the 32% of commercial patients receiving PAP support may not fully represent their need. There may be more commercial patients who applied to PAPs, but did not meet eligibility criteria or were unaware of the PAP offerings.

PAP Utilization in Practice: Commercially insured beneficiaries are the primary users of PAPs in community practices

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[9] The Commonwealth Fund Digest Archive. 61 Million Are Either Uninsured or Underinsured. Accessed August 21, 2012.

 

The Promise of Oral Anticancer Agents: Addressing Compliance and Affordability (continued)

Oral Parity Legislation

Many patients are not subject to any cost sharing for their injectable medications, whereas nearly all oral drugs are subject to cost sharing. This disparity has led to the introduction of state-level legislation to ensure that health insurers cover oral anticancer drugs no less favorably than IV chemotherapy. Since 2007, 17 states and the District of Columbia have enacted oral parity legislation. 

Some of the early state laws did not include a provision to prevent plans from raising the co-pay/coinsurance across the board to achieve parity, which would undermine the spirit of the law. More recent laws address this breach in the spirit of the legislation by noting that a plan cannot achieve parity by raising the OOP costs for oral drugs (e.g., move them to a specialty tier that requires a coinsurance). Even with such provisions in place, Kantar Health research suggests that there is still room to shift costs to patients to compensate for any relief provided by oral parity legislation. Over time, it seems likely that orals will be subject to coinsurance more frequently as this aligns better with IV coverage, and would arguably remain within the spirit of parity. 

Similar language exists among most of the state laws, but some have added clarifying language to address confusion or potential unintended consequences. At present, the Cancer Drug Coverage Parity Act (H.R. 2746) is working its way through the House Health, Employment Labor and Pensions Subcommittee. This legislation is unlikely to be passed in this Senate cycle as it is in early stages. If passed, the law would apply to self-funded plans in addition to fully funded plans, which are affected by state laws.

Conclusion

The introduction of oral anticancer drugs to treat relatively small patient populations with difficult-to-treat cancers has been paired with higher average monthly costs. For the typical Medicare patient, an oral drug priced at $10,000 per month places him immediately into and through the donut hole into catastrophic in the first fill until 2020, resulting in insurmountable upfront costs.

 Even if a patient were able to pay for the first fill and cross the donut hole, the co-pay simply “drops” to approximately $500 per month, a cost-share level that puts a drug at risk of losing approximately 25% of patients to “financial toxicity” in the absence of sufficient financial assistance.[7] As drug prices and the percentage of the population over the age of 65 continue to rise, this issue will only become more important despite the fact that a number of oral drugs will soon start to go off-patent. The introduction of generic options may reduce the price of a small number of oral agents by a significant percentage, but won’t address the underlying issue as technology continues to outpace loss of exclusivity.

Despite clinical advances and improved patient convenience, oral drugs come with unique compliance and patient affordability challenges compared with IV treatments. Much has been attempted to address the affordability issues facing these cancer drugs, including efforts to close the Medicare donut hole, provide assistance for patients through PAPs, and ensure a more equal playing field with oral parity legislation. However, these efforts are likely to introduce new affordability challenges.

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[7] The Kaiser Family Foundation and Health Research & Educational Trust Employer Health Benefits 2011 Annual Survey.

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About the Contributors

Rhoda Dunn is Senior Director of Oncology Commercial Strategies at Kantar Health.
Gordon Gochenauer is Director of Oncology Commercial Strategies at Kantar Health. 

Kantar Health is a global, evidence-based decision support partner to the world’s leading pharmaceutical, biotech, device and diagnostic companies. Our 700+ staff act as catalysts, working closely with customers to drive distinctive decision-making that help them prioritize product  development and portfolios, differentiate their brands and ensure product profitability after launch. We are unique in that we bring together clinical, medical and methodological expertise, commercial/marketing know-how and proprietary data. It is this rare combination, together with our unparalleled stakeholder reach, that enable us to mobilize incisive, imaginative and timely ROI-driven solutions, empowering clients to deliver better healthcare options to their customers. Kantar Health’s oncology-related offers include Oncology Market Access (OMA) US which provides strategic and tactical insights into the evolving oncology landscape. Combining Kantar Health’s commercial and clinical expertise in oncology, OMA US provides cutting-edge information and analysis on critical reimbursement, coverage and competitive issues in the US oncology marketplace. 

If you would like us to act as catalysts for you, contact us at www.kantarhealth.com/contactus

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