Just before the August 2019 recess, the Senate Finance Committee released its proposed Prescription Drug Pricing Reduction Act (drug package).1 There are provisions in the package that community oncologists and the patients they serve strongly support, such as encouraging a healthy and competitive biosimilars market, transparency around pharmacy benefit managers and direct and indirect remuneration fees, and changes to grandfathered site-neutral payments for hospitals.
However, included in the document is a proposal to include support from patient assistance programs (coupons and related financial support) in the calculation of average sales price (ASP), which is the basis for Medicare Part B drug reimbursement. Oncology professionals should all be very worried about this proposal, as it will have a severe adverse impact on patients with cancer who depend on financial assistance.
If patient assistance is calculated as part of ASP, drug manufacturers can be expected to reduce or eliminate these critically important programs. In today’s world of higher patient cost-sharing and insufficient insurance, financial assistance is vital to ensuring that patients get access to cancer treatment. Take that away and you create a system of tiered patient access to cancer care; those who can afford treatment get a shot at life, while those who cannot afford deductibles and copayments get no access to treatment.
With increasing premiums, high-deductible health plans, and higher cost-sharing, patients with cancer are responsible for a greater percentage of treatment costs, regardless of underlying drug prices. Patient out-of-pocket responsibility in private health insurance has continued to grow, creating even greater need for patient assistance. The average deductible for privately covered employees was $1573 in 2018,2 up over 70%, or $917, from 2010.3
If, for some reason, manufacturers would continue patient assistance programs should this proposal become law, the reduction in ASP would end up putting most Part B cancer therapies under water (reimbursed less than cost). Indeed, this is already the case with some Part B drugs. A 2018 Avalere analysis for COA
(proprietary) found that 21% of all Part B drugs analyzed had a negative estimated difference between drug acquisition cost and the Medicare allowable payment amount. The same analysis found that among the top 10 highest cost cancer drugs (accounting for 72% of all cancer drugs and 23% of all Part B drug spending in 2016), the average estimated difference between drug acquisition cost and Medicare allowable payment amount is 2.4% or $2.50. If more cancer drugs are pushed underwater, then it will simply cause more cancer care to be shifted to the much more expensive hospital setting, resulting in patient access issues—particularly for rural or underserved areas—and much higher costs.
Congress should be commended for prioritizing efforts to address this important and complex issue affecting patients. Ensuring access to affordable life-saving cancer treatments is a top concern for oncologists, oncology nurses, practice administrators, pharmacists, and other cancer care professionals. However, they must do this carefully and thoughtfully, being mindful of the unintended consequences that could result. Including patient financial assistance in ASP calculations is one such proposal that, without the proper study and analysis, will be very dangerous for patients with cancer.
1. Senate Committee on Finance. Description of the Chairman’s Mark The Prescription Drug Pricing Reduction Act (PDPRA) of 2019. https://www.communityoncology.org/downloads/SenateFinance_PrescriptionDrug_Markup_7-23.pdf. Published July 25, 2019. Accessed September 3, 2019.
2. Henry J. Kaiser Family Foundation (KFF). 2018 employer health benefits survey, summary of findings. kff.org website. https://www.kff.org/report-section/2018-employer-health-benefits-survey-summary-of-findings/. Published October 3, 2018. Accessed September 3, 2019.
3. Henry J. Kaiser Family Foundation (KFF). 2015 employer health benefits survey, summary of findings. kff.org website. https://www.kff.org/report-section/ehbs-2015-summary-of-findings/. Published September 22, 2015. Accessed September 3, 2019.