Why Does the Inflation Reduction Act Exclude Expensive Cancer Treatments in Price Negotiations?

PURPOSE: The Inflation Reduction Act (IRA) includes provisions for price negotiations of certain high-spending drugs in Medicare Parts B and D. This provision received considerable attention from those interested in the costs of cancer care since Medicare covers most patients with cancer and many cancer drugs are expensive. We simulate how many cancer drugs may be eligible for IRA price negotiations and examine the reasons that many are likely to be excluded from negotiation. METHODS: This study uses 2021 Medicare Fee-for-Service Part B and Part D prescription drugs expenditure data. Cancer drugs were identified using the SEER Program list of cancer medications. Our measures included total spending, beneficiary users, and spending-per-beneficiary for all cancer drugs covered under Medicare. Each drug was evaluated for eligibility on the basis of IRA negotiation provisions, including estimated loss of patent exclusivity, current competitors, and orphan drug designation. RESULTS: We found that very few cancer drugs will meet the IRA eligibility thresholds to be included in negotiations. We estimate that only 2.2% of beneficiaries with cancer will see lower costs because of the IRA negotiations. The main reason for this is that although novel cancer drug treatments are priced high, they generally treat relatively few beneficiaries and thus do not meet negotiation eligibility criteria, which are primarily based on a ranking of total spending. CONCLUSION: The IRA negotiation provisions will have limited impact on cancer drug prices and will likely leave most patients with cancer exposed to high drug costs.

Defining Priorities in Value-Based Cancer Care: Insights From the Alliance for Clinical Trials in Oncology National Cooperative Group Survey.

PURPOSE: We determine how stakeholders prioritize the importance of oncologic outcomes, patient-reported outcomes (PROs), and cancer-related health care costs. METHODS: A survey was distributed to the National Clinical Trials Network Alliance for Clinical Trials in Oncology cooperative group membership from May 14 to June 30, 2022. Respondents were asked to rate (5-point Likert scale) and rank (1-9) evidence-based value domains: overall survival, treatment toxicities/complications, quality of life (QOL), financial toxicity, access to care, compliance with evidence-based care, health system performance, scientific discovery and innovation, and cost to the health care system. RESULTS: A total of 514 members responded, including researchers (24.7%), nurses (19.5%), medical oncologists (17.9%), administrators (9.3%), surgical and radiation oncologists (9.1%), patient advocates (3.1%), and nonphysician providers (16.4%). Participants represented various practice settings including National Cancer Institute-designated cancer centers (29.8%), university-affiliated academic cancer centers (21%), hospital-owned oncology practices (21.8%), and others (27.4%). There was agreement in how respondents prioritized value domains (W = 0.39, P < .001). Respondents ranked patient QOL (mean rank: 2.6 ± 1.9) as most important above all other metrics including survival (mean rank: 3.5 ± 0.3) and access to care (mean rank: 3.5 ± 2.1; P < .001). Members engaged in direct patient care also ranked access to care of higher importance than nonclinicians (P = .026). Cost to the health care system (mean rank: 7.5 ± 2.1) and health system performance (mean rank: 7 ± 2) were ranked as least important (P < .001). Inclusion of PROs into therapeutic assessment (59.3%) was the most frequently selected priority of future cooperative group initiatives. CONCLUSION: Oncology community stakeholders deemed patient-centered value domains as most important and considered patient QOL the highest priority. Inclusion of PROs into clinical trials was endorsed as an important component of therapeutic assessment. These findings can be taken into consideration when creating a value framework for inclusion in cancer clinical trials.

Biosimilar Competition and Payments in Medicare: The Case of Trastuzumab.

PURPOSE: Numerous biologic drugs will soon be facing biosimilar competition. We study the case of trastuzumab, a revolutionary drug approved in 1998 to treat human epidermal growth factor receptor 2-positive breast cancer, to understand how trends in the price and treatment cost of the originator brand and biosimilar forms of trastuzumab evolved following biosimilar entry. METHODS: We use average sales price data from the Centers for Medicare and Medicaid Services, adjusted for inflation to real 2020 dollars using the consumer price index, to describe price changes for the originator biologic and biosimilar versions of trastuzumab between 2019, when the first biosimilar was covered by Medicare, and 2022, when a total of five biosimilar competitors were on the market. We also estimate total treatment costs of biologic and biosimilar forms of trastuzumab from 2005 to 2022 and describe changes in their market share. RESULTS: We find that the first biosimilar entrant's price was 15% lower than the originator brand in 2019, and the fifth biosimilar entrant's price in 2022 was 58% lower than the originator brand in 2019. Contrary to expectations from prior research, the originator biologic price in 2022 decreased 29% from its 2019 average sales price. Average treatment cost for the biologic and biosimilar versions of trastuzumab combined was $45,659 US dollars lower in 2022 compared with the year before biosimilar entry, 2018. Finally, biosimilar market share grew from only 7% in the first year of entry to 32% in the second year, when three biosimilars were on the market. CONCLUSION: Biosimilar entry may be an effective means of decreasing the cost of biologic cancer treatments. Our findings suggest that policies that support biosimilar entry and encourage use may expand access to necessary treatment and reduce health care costs.

Incomplete program take-up during a crisis: evidence from the COVID-19 shock in one U.S. state.

In the U.S., means-tested cash, in-kind assistance, and social insurance are part of a patchwork safety net, often run with substantial involvement of state and local governments. Take-up-participation among eligible persons in this system is incomplete. A large literature points to both neo-classical and behavioral science explanations for low take-up. In this paper, we explore the response of the safety net to COVID-19 using newly-collected survey data from one U.S. state-Utah. The rich Utah data ask about income and demographics as well as use of three social safety net programs which collectively provided a large share of relief spending: the Unemployment Insurance program, a social insurance program providing workers who lose their jobs with payments; the Supplemental Nutrition Assistance Program, which provides benefit cards for purchasing unprepared food at retailers; and Economic Impact Payments, which provided relatively universal relief payments to individuals. The data do not suffice to determine eligibility for all of the programs, so we focus on participation per capita. These data also collect information on several measures of hardship and why individuals did not receive any of the 3 programs. We test for explanations that differentiate need, lack of information, transaction costs/administrative burden, stigma, and lack of eligibility. We use measures of hardship to assess targeting. We find that lack of knowledge as well as difficulty applying, and stigma in the UI program each play a role as reasons for not participating in the programs.

Technology adoption and market allocation: The case of robotic surgery.

The adoption of health care technology is central to improving productivity in this sector. To provide new evidence on how technology affects health care markets, we focus on one area where adoption has been particularly rapid: surgery for prostate cancer. Within just eight years, robotic surgery grew to become the dominant intensive prostate cancer treatment method. Using a difference-in-differences design, we show that adopting a robot drives prostate cancer patients to the hospital. To test whether this result reflects market expansion or business stealing, we also consider market-level effects of adoption and find effects that are significant but smaller, suggesting that adoption expands the market while also reallocating some patients across hospitals. Marginal patients are relatively young and healthy, inconsistent with the concern that adoption broadens the criteria for intervention to patients who would gain little from it. We conclude by discussing implications for the social value of technology diffusion in health care markets.

Effects of the Colorectal Cancer Control Program.

Although colorectal cancer (CRC) screening is highly effective, screening rates lag far below recommended levels, particularly for low-income people. The Colorectal Cancer Control Program (CRCCP) funded $100 million in competitively awarded grants to 25 states from 2009-2015 to increase CRC screening rates among low-income, uninsured populations, in part by directly providing and paying for screening services. Using data from the 2001-2015 Behavioral Risk Factor Surveillance System (BRFSS) and a difference-in-differences strategy, we find no effects of CRCCP on the use of relatively cheap fecal occult blood tests (FOBT). We do, however, find that the CRCCP significantly increased the likelihood that uninsured 50-64-year-olds report ever having a relatively expensive endoscopic CRC screening (sigmoidoscopy or colonoscopy) by 2.9 percentage points, or 10.7%. These effects are larger for women, minorities, and individuals who did not undertake other types of preventive care. We do not find that the CRCCP led to significant changes in CRC cancer detection. Our results indicate that the CRCCP was effective at increasing CRC screening rates among the most vulnerable.