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DRUG PRICES

IOM Calls for Reckoning on Cancer Costs

Drugs in U.S. can cost twice the price in Europe due to lack of price controls and negotiating authority.

MICHAEL FITZHUGH

The Burrill Report

“We believe that individual patients and their doctors should be armed with the best available information to help assess the relative clinical benefits, specifically efficacy, safety and tolerability of treatment interventions.”

As spending on cancer care in the United States rises, the time has come to pay closer attention to the cost of that care, says the Institute of Medicine, a group that advises lawmakers on system-wide healthcare issues.

Containing—or at least slowing—growth in cancer treatment cost is critical, the group says, as healthcare spending threatens to jeopardize the United States’ international economic competitiveness and negatively impacts national priorities, including investments in research, education, and infrastructure.

Part of the solution may lie in incorporating cost information into clinical practice guidelines and severing the relationship between treatment choices and physician income, suggests the IOM in a new summary of its workshop on “Delivering Affordable Cancer Care in the 21st Century.

Despite the threat posed by costly therapies and treatments, legal and regulatory restraints can impede the provision of affordable, high-quality cancer care, the group says. The Centers for Medicare & Medicaid Services, for instance, is not allowed to consider the cost of interventions when making reimbursement decisions, noted workshop participant Deborah Schrag, an associate professor of medicine at Harvard Medical School’s Dana-Farber Cancer Institute, nor can it negotiate with drug companies about pricing. Other laws make it illegal to exclude certain drugs from formularies or deny coverage of cancer treatments, regardless of their cost, and prohibit the FDA from determining the value of specific interventions.

Another participant, Memorial Sloan-Kettering Cancer Center physician Peter Bach, noted that due to a “lack of price controls and negotiations, drugs can cost twice as much or more in the United States than they do in the United Kingdom and European nations, which set price limits via cost-effectiveness cut-offs.”

Some IOM members see potential for The Independent Payment Advisory Board, a 15-member board created by the Affordable Care Act and given broad authority to take actions, to reign in Medicare spending. The board has a mandate to control costs, but is explicitly prohibited from rationing, from making cuts in service, from implementing cost sharing, and from making changes in hospital reimbursement, says Jeffrey Peppercorn, associate professor of medicine at Duke University and a faculty associate in the Trent Center for Bioethics. “What tools it has left and how effective these will be remains to be seen.”

Possible solutions to the rising cost of cancer care will need to be pursued by everyone involved in the problem, says the IOM. The group suggests that doctors should improve the information patients have to make decisions about managing their care, and quit using interventions of questionable value. Healthcare institutions should promote and facilitate best care practice in cancer care, support research that informs clinical practice, and reward the provision of affordable, high-quality cancer care by changing the ways that care is delivered and reimbursed.

The Biotechnology Industry Organization, an industry group representing many of the companies that develop and sell cancer therapies, says it strongly supports using accurate, scientific evidence to inform clinical decision-making, rather than focusing on cost considerations. “We believe that individual patients and their doctors should be armed with the best available information to help assess the relative clinical benefits, specifically efficacy, safety and tolerability of treatment interventions; while simultaneously weighing the risks of various treatment alternatives,” the organization says in a statement provided to The Burrill Report.

But even with the best information at hand, cost consideration may become impossible for most people to set aside. Lee Newcomer, senior vice president of oncology for UnitedHealthcare, told workshop participants that one recent projection suggests that in 2017, health insurance premiums and out-of-pocket health costs could account for half of all household income. “We have to do something in the very immediate future about this,” he says.



February 15, 2013
http://www.burrillreport.com/article-iom_calls_for_reckoning_on_cancer_costs.html

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