April 2017 Edition Vol.11, Issue 4

Market Forces, Value-Based Frameworks, and Drug Pricing

By Megan Garlapow, PhD

Highlights from the Association of Community Cancer Centers (ACCC) 43rd Annual Meeting, CANCERSCAPE, held March 30-31, 2017, in Washington, D.C., emphasized major economic factors that harbor the potential to impact the financial sustainability of cancer centers and patient access to care.

Selected highlights from the meeting describe the current state of cancer programs, the application of value-based frameworks, and drug pricing under President Trump’s administration.

Major Market Forces Affecting Current Cancer Programs

In her presentation, “The State of Today’s Cancer Programs,” Lindsay Conway, MSEd, The Advisory Board Company, described the major market forces currently affecting community cancer centers and patient access to care.1

Perhaps not surprisingly, Conway began by describing how healthcare reimbursement and payment reform face a great deal of uncertainty. From the payer perspective, two options for addressing the healthcare cost curve are the Affordable Care Act’s incentives for higher quality care at lower costs, and payers decreasing payments to providers.

As Conway explained, the GOP may likely follow four major guiding principles:

  • Decrease spending on Medicaid and healthcare subsidies
  • Devolve more control to the state level
  • Promote free market options and consumer choice
  • Continue the recent emphasis on transparency of cost and quality

For community cancer centers, Conway recommends practices reinvest in financial navigation services that ensure patients can meet out-of-pocket expenses, perfect operations of revenue cycles to obtain all owed monies, and support strong physician leaders during times of transition.

Oncology patients require more intensive care coordination as they are typically older and sicker, and have more comorbidities.

Coordination can come from nurse navigators and, increasingly, non-clinical people trained by healthcare systems. One example of such a program is the University of Alabama at Birmingham (UAB) Health System’s Patient Care Connect Program, which trains non-clinical navigators.

UAB’s program overhauled the navigator role by focusing exclusively on high-risk patients, emphasizing activities associated with saving money (e.g. adherence to medications to decrease rates of otherwise avoidable visits to the emergency department), and using distress screening to detect and intervene in potential issues before they escalate to crises.

Conway noted that distress screening is foundational to the Patient Care Connect Program and relies on care maps that address a wide range of issues from fatigue to finances. Each care map describes specific steps to resolve any issues and to record any interventions.

Routine analysis of the data generated by this process enables further improvements to the care maps and the software. The software in and of itself, however, is not responsible for the benefits of the Patient Care Connect Program; rather, the software enables a standardization of the process of navigating care maps.

As Conway explained, “I don’t think that increasing use of navigation software is necessarily the answer. I think that the key to effective navigation is standardized processes for identifying and addressing patient needs.”

The standardized process of the Patient Care Connect Program seems to be paying off. In the first year of its use, high-risk patients who received navigation experienced a 31% reduction in use of visits to emergency departments, a 58% reduction in hospitalizations, and a 68% reduction in admissions to the ICU.

Per navigated patient, savings were around $4,000, which would translate to $54 million in savings to Medicare. Notably, these results compare patients from before they received navigation to after they received navigation.

Additionally, formal partnering across therapeutic areas can help address the increasing frequency of comorbidities in cancer patients. As Conway explained, the viability of these partnerships depends on the prevalence of comorbidities within a patient population and how much care can be improved in patients burdened by comorbidities.

Another factor affecting market forces in oncology is patient consumerism. According to Conway, patients are increasingly independent as they pay for more of their healthcare expenses, have access to a wider array of information, and question physicians more, but trust them less than in past decades.

The breadth of information and the nature of reviews that are available online result in challenges and opportunities for oncology. Healthcare systems and clinicians can contribute high-quality, patient-friendly, evidence-based information to the web that helps patients evaluate providers and treatment options. Additionally, providers can take steps to help patients and families identify high-quality, reliable online resources.

Conway also pointed out that providers should ensure that their own web sites are patient-friendly, are easy to find and navigate, and provide a comprehensive listing of services and treatments.

“Providers should embrace online communications as a means to improve patient education and engagement through just-in-time information, remote monitoring systems, and tools for communicating with the care team,” she said.

In some ways, oncology is an intensified representation of the rest of market trends affecting healthcare: “The market forces in oncology are generally similar to the trends playing out in health care overall. It’s just that everything is more exaggerated in cancer care,” concluded Conway.

Understanding Costs to Utilize Value-Based Frameworks

Value-based frameworks in healthcare emphasize quality over quantity. To reduce healthcare costs and to improve care, both policymakers and healthcare providers are looking to implement value-based tools.

Stephen S. Grubbs, MD, Vice President Clinical Affairs Department at the American Society of Clinical Oncology (ASCO), described key components and a forecast of how value-based tools might change clinical practice in his presentation, “The ASCO Value Framework”.2

The focus of value-based frameworks is on shared decision-making between clinicians and patients, where clinicians can act as guides to healthcare resources and delineate management options in ensuring informed decision-making around clinical and price information.

According to Grubbs, the three primary parameters of the ASCO value-based framework are clinical benefit, toxicity, and cost.3

The National Comprehensive Cancer Network (NCCN) has a value framework currently embedded in its clinical guidelines, while the ASCO value framework remains in development.

Grubbs believes that both frameworks have the intended goal of making more informed decisions by patients and their physicians.

Implementation of value-based frameworks in community cancer centers faces particular challenges in assessing and understanding costs, both to the patient and to cancer care stakeholders. One of the big challenges is how to define value on the cost side of treatment.

“We can look at cost of the drugs, which itself contains two separate costs” said Grubbs; one is the overall cost to the system, and the other is to the patient. “What’s their out-of-pocket cost in looking at one treatment vs. another,” he said.

“That’s really the counseling that goes on with the staff, the physician, and the patient. That’s the first application. The bigger picture is what is the total cost to everyone as we compare different treatments.”

Essential to successful implementation of value-based frameworks in the community cancer center setting is development of a customizable tool that can adjust to individual information for each patient. Such information could include the importance of side effects compared to clinical benefit and out-of-pocket expenses, which vary among patients.

“I think the biggest issue we’re all facing right now is the increase in deductibles and sometimes even the disparity between coverage for oral vs. intravenous drugs. You have to individualize this discussion to each patient based on insurance coverage,” explained Grubbs.

Value also needs to account for net health benefit. In the ASCO value framework, clinical benefit, toxicity, and a category called ‘bonus points’ comprise the net health benefit. In clinical benefit, overall survival is the most important, followed by progression-free survival, and response rates. Toxicity accounts for both the severity and frequency of adverse events. ‘Bonus points’ includes extended survival, palliation of symptoms, improved quality of life, and treatment-free intervals.

Notably, a 2016 update to the ASCO value-based framework uses hazard ratio instead of median to assess clinical benefit, assesses all grades of toxicity by frequency and number, assigns bonus points for improvements in both quality of life and symptoms, and assigns bonus points for significant improvement in the tail of curves.4

The Trump Administration and the Cost of Drugs

Jessica Turgon, MBA, Principal at ECG Management Consultants, discussed the political and economic forces affecting drug prices under the current presidential administration.5 She described different federal policy options for addressing increasing prices of medications and approaches payers can use to proactively strategize for changes.

The 2016 ACCC Trends in Cancer Programs survey (N=166) found that the costs of cancer drugs remains the most critical challenge to care.6,7 That challenge is coupled with great uncertainty and instability about what changes policymakers will implement under the Trump administration and how those changes might affect drugs costs.

“Navigating the uncertainty of healthcare reform at this point will be a consistent theme this year. There will continue to be a need to track drug expenses at the protocol level, with an understanding of how changing drug options will impact overall cost of care,” said Turgon.

Turgon described the early effects on healthcare and drug prices under Trump, with the “Two for One” Regulation Reduction, potentially affecting the regulatory landscape around drugs. Additionally, new confirmed leadership (Seema Verma) at the Centers for Medicare and Medicaid Services and nominated leadership (Scott Gottlieb) at the Food and Drug Administration come with their own slew of anticipated differences in direction.

Verma is critical of the status quo for Medicaid and does not support a Medicare voucher plan. Gottlieb would likely want to increase generic drug competition, speed the approval of drugs, and implement strategies that provide terminally ill patients with access to unapproved medicines.

Though Trump has met with health insurance CEOs and pharmaceutical executives, the American Health Care Act infamously failed. This results in increased uncertainty of what to expect for subsequent attempts at healthcare reform and how they might impact drug prices.

While Trump has advocated for reforms to drug pricing, he faces strong opposition from pharmaceutical companies. The bipartisan support required to achieve reform would likely be particularly challenging to attain, and Trump himself at times takes stances directly opposing the GOP or vacillates in his stances.

Though he meets various strong and serious sources of opposition, Trump advocates for importing cheaper drugs, increasing the availability of generic drugs, and allowing Medicare to negotiate drug prices.

One major point of emphasis in Turgon’s presentation was the critical role community cancer centers play in proactively addressing anticipated changes. In fact, Turgon predicts the development of strategies to navigate bureaucratic and economic implications of changes will fall largely to community cancer centers.

Community cancer centers can implement protocols and pathways, strategies for improved management of inventory, and other advocacy and communication efforts to address the high prices that impact cancer medications.

Turgon expects that cancer centers will continue to see high priced drugs come to market (maybe even at a faster pace), positioning cancer programs as advocates for their patients with insurers.

“Continued focus on drug pricing and the margins on drugs will require cancer programs to really understand and adopt protocol or pathway based plans that take into account the cost of drugs.”



  1. Conway L. The state of today’s cancer programs. Presented at Association of Community Cancer Centers 43rd Annual Meeting, CANCERSCAPE; March 30-31, 2017; Washington, D.C.
  2. Grubbs SS, McBride A, Carlson RW. Value-based frameworks—everything your cancer program needs to know. Presented at Association of Community Cancer Centers 43rd Annual Meeting, CANCERSCAPE; March 30-31, 2017; Washington, D.C.
  3. Schnipper LE et al. American Society of Clinical Oncology statement: a conceptual framework to assess the value of cancer treatment options. Journal of Clinical Oncology. 2015; 33(23):2563-77.
  4. Schnipper LE et al. Updating the American Society of Clinical Oncology Value Framework: revisions and reflections in response to comments received. Journal of Clinical Oncology. 2016; 34(24):2925-34.
  5. Turgon J. Drug pricing under the Trump administration. Presented at Association of Community Cancer Centers 43rd Annual Meeting, CANCERSCAPE; March 30-31, 2017; Washington, D.C.
  6. The ASCO Post. ACCC 2016 survey finds cancer drug costs remain the most critical challenge to care. http://www.ascopost.com/News/45256.
  7. Association of Community Cancer Centers. Association of Community Cancer Centers’ 2016 survey finds cancer drug costs remain the most critical challenge to care. http://www.accc-cancer.org/mediaroom/press_releases/2017/ACCC-2016-Survey-Finds-Cancer-Drug-Costs-Remain-the-Most-Critical-Challenge-to-Care-1.5.17.asp.

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