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September 27, 2012 - 08:09 am Posted in Featured comments0 Comments

Market access for oncology products is being shaped by a broad range of trends, including an aging population, robust pipelines, personalized medicine, 340B program participation, and budgetary pressures. But the oncology market access trends of greatest concern to the biopharmaceutical industry are provider consolidation and site-of-care shifts, the rise of oral oncolytics, and payer management and clinical pathway experimentation, according to a study conducted by Campbell Alliance.

These trends emerged as standouts from an online survey conducted in April 2012 that polled representatives of 38 managed care health plans in the US. In addition, Campbell Alliance conducted telephone interviews in May 2012 with respondents representing 15 community practices to gather their perspectives.

Provider Consolidation and Site-of-Care Shifts

Of particular concern to these respondents is the increasing shift in cancer drug spending to hospitals, many of which have access to 340B pricing that limits the cost of drugs to federal purchasers. Office-based practices and hospitals represent two distinct customer segments with differing business models and support needs. Hospitals have greater leverage against payers in local markets with provider fragmentation than do office-based practices. In addition, whereas office-based practices rely heavily on buy-and-bill profits, hospitals rely more on diversified service lines and have access to 340B pricing if eligible. The 340B Drug Pricing Program limits the cost of drugs to federal purchasers and to certain grantees of federal agencies, such as hospitals that serve a disproportionately large share of low-income patients, children’s hospitals, freestanding cancer hospitals, critical access hospitals, and federally qualified health centers, among others.

As institutions, hospital stakeholders have the power to influence access. The implication for cancer drugmakers is more restricted access to prescribers, who may face more restricted product selection due to the use of stricter formularies and institutional guidelines. Cancer drugmaker profitability also declines considerably when more patients are referred to 340B institutions. Meanwhile, economic pressures have made it difficult for oncology practices to operate independently, resulting in provider consolidation. Growing hospital shares and provider consolidation both lead to greater bargaining power against payers and cancer drugmakers.

As declining reimbursement, the growing underinsured, and 340B program participation continue to accelerate site-of-care shifts, drugmakers will need to monitor these shifts by geographic region and determine actionable drivers. According to Campbell Alliance, drugmakers must optimize support by site of care to ensure market access and consider the needs of hospital stakeholders in doing so. In addition, they must develop new customer-facing models and align field force deployment.

The Rise of Oral Oncolytics

Global sales of oral oncolytics have increased every year since 2005 and have overtaken that of traditional chemotherapy. The increased use of oral oncolytics confers different advantages and disadvantages to each of three stakeholder groups: patients, providers, and payers. Key considerations for commercialization of oral oncolytics include program design for patient assistance, distribution strategy, and a compelling payer value proposition.

The convenience of taking an oral medication is a benefit to the patient, but out-of-pocket costs for oral oncolytics can be overwhelming and lead to non-adherence. As the patient’s cost burden continues to drive treatment abandonment, Campbell Alliance recommends manufacturers optimize the design of patient assistance programs to address the significant patient cost burden.

From the provider perspective, oral therapeutics eliminate the buy-and-bill profits that practices rely upon and result in uncompensated care for prior authorization, patient education, and side-effect management. Furthermore, oral medications take the provider out of the patient feedback loop, leading to less compliance control and making the management of treatment side effects more difficult. Trade strategies and distribution structure can be refined to determine the optimal level of supply chain control and provider/patient access. Although payers prefer the use of specialty pharmacies to distribute oral oncolytics, on-site dispensing by community physician groups may improve practice economics as well as the patient experience. Campbell Alliance suggests that when evaluating distribution strategies, drug manufacturers should consider physician preferences for on-site dispensing.

With oral drugs, payers see savings from the elimination of infusion costs. In addition, oral oncolytics are more easily managed under the pharmacy benefit, and product waste can be reduced through quantity limits and short cycle dispensing. Nevertheless, for payers, oral oncolytics represent a source of rapidly increasing spend. Because health plans are able to manage oral oncolytics more aggressively than infused therapies, Campbell Alliance recommends drugmakers develop strategies to communicate clinical and economic value to payers. In categories with high competitive intensity, cancer drugmakers should consider developing contracting strategies to improve or defend access as the market matures.

Payer Management

Utilization management of cancer therapeutics is a high priority for payers, but the level of management varies by product. Payers will most often restrict high-cost drugs, biomarker-indicated therapies, and drugs deemed to be at high risk for widespread off-label use, including failure to comply with step therapy.

Moving forward, commercial health plans expect to increase their use of utilization management tactics, but the range of tactics they employ is limited. According to the Campbell Alliance survey, the vast majority of payers plan to increase their use of biomarker testing to prospectively identify likely responders where indicated, as a means to ensure appropriate use and fulfill their need for budget predictability. Other utilization management tools that are likely to see an increase in use include clinical pathways, prior authorization, increased patient cost-sharing, prior therapy requirements, and the mandated use of specialty pharmacies to exclude buy-and-bill (i.e., white bagging).

Management tactics such as prior authorizations are a preferred tool, but the specific criteria and requirements for a given drug may vary by payer. Oncology practices navigate a wide range of prior authorization requirements to limit reimbursement risk. Successfully securing prior authorization does not guarantee payment, however.

As payers increasingly use blunt tools (e.g., prior authorizations) and case management of high-cost patients as means of ensuring appropriate use and controlling costs, Campbell Alliance recommends drugmakers ensure their target product profile does not inadvertently lead to a label that incurs highly restrictive payer management. In the case of Dendreon’s Provenge®, for example, commercial health plans looked to clinical trial exclusions to define coverage policy exclusions. The product’s indication statement allows some room for physician interpretation of terms such as “asymptomatic or minimally symptomatic,” therefore Provenge is typically not authorized for patients who use opioid analgesics for cancer-related pain.

Clinical Pathway Experimentation

Whereas guidelines expand the set of available treatment options, pathways seek to restrict choice. The goal of a clinical pathway is to improve or maintain health outcomes while lowering costs by reducing treatment variability. Pathway inclusion is based on a hierarchy of efficacy, safety, and cost, in that order of priority.

Clinical pathways are designed to address the limitations of prior authorization and reducing fee schedules, offering more durable cost containment to payers. Pathways may lead to cost savings by encouraging the use of generics, streamlining treatment choices, and reducing side effects while maintaining outcomes.

Only 29% of commercial health plans surveyed by Campbell Alliance have implemented the use of clinical pathways to date, either as pilot programs or as fully implemented programs across all physician practices. But nearly half of commercial health plans surveyed perceive the use of clinical pathways to be of high or very high benefit. Currently, clinical pathway programs focus on the largest cancers, but the majority of payers surveyed anticipate expanding their use of clinical pathways to such tumor types as prostate, lymphoma, myeloma, and renal cell carcinoma. Some surveyed payers also expect to expand their clinical pathway programs to new geographical areas.

As payers view clinical pathways as a potential game changer (relative to the use of blunt tools), Campbell Alliance recommends drugmakers develop an economic value proposition that considers the total cost of therapy to ensure pathway inclusion. They can identify opportunities to engage regional stakeholders contributing to pathway development and/or driving pathway utilization. Cancer drugmakers can also increase physician awareness of their drug’s presence on pathways and keep clinicians apprised of their drug’s latest clinical developments, as pathways may not always be updated in a timely fashion.

Pathways are gaining traction, but only with a limited number of regional plans and in geographic markets conducive to pathway adoption. While adoption will likely be a slow process due to physician skepticism and resistance, Campbell Alliance believes that it is important for drugmakers to monitor pathway adoption on a regional basis.

Access to the full results of the Campbell Alliance study, Turning Tides: Trends in Oncology Market Access, is available at:

Submitted by Lujing Wang, Terry Tao, and Nicolle Hamilton, Campbell Alliance

Lujing Wang is Practice Area Leader, Terry Tao is Practice Executive, and Nicolle Hamilton is a Senior Consultant within the Pricing and Market Access Practice of Campbell Alliance. Campbell Alliance ( is the consulting business segment of inVentiv Health, and is the leading management consulting firm specializing in the pharmaceutical and biotechnology industry.

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