Oncologists: Hurry Up and Wait for Reimbursement

Unlike most primary care physicians, who write patients prescriptions that they can fill at a pharmacy, oncologists have to purchase most drugs upfront because they're delivered intravenously in the office.

These days, some cancer drugs average an annual cost of $100,000 a year, affecting treatment decisions made by oncologists, and altering the very culture of the field itself, as reported by the Wall Street Journal this week. Suddenly, financial issues are causing a potential rift in the patient-physician relationship, forcing docs to reevaluate their treatment options.

Unlike most primary care physicians, who write patients prescriptions that they can fill at a pharmacy, oncologists have to purchase most drugs upfront because they're delivered intravenously in the office. This puts them in a precarious financial position until patients or insurance companies ultimately foot the bill.

According to a May 2008 Reuters article, “sales of cancer drugs will grow at nearly double the rate of the global pharmaceutical market and could reach $80 billion by 2012,” as stated by prescription tracking company, IMS Health. “Expensive new treatments, an increasing number of patients on chemotherapy in major markets, and evidence that more people in emerging markets are gaining access to modern targeted therapies will contribute to sales of cancer drugs growing at a compound rate of 12 to 15 percent.”

Perhaps exacerbating the problem is a new generation of drugs that, for the first time, provide oncologists with some options for fatally ill patients. Yet, the obvious downside is the accumulating debt incurred by patients unable to afford the medicine needed to combat their illnesses. Oncologists are now forced to weigh the problem of cost hikes against drug efficacy in what is fast becoming a dismal economy.

On the flip side, according to the WSJ article, drug companies claim they must charge premium prices to recoup the average “$1 billion they say it costs on average to bring a cancer drug to market. They also say they provide millions of dollars of free and discounted drugs and co-payment assistance to the poor and underinsured.”

In a survey of cancer doctors reported in the February 2007 issue of the Journal of Clinical Oncology, nearly half of oncologists polled said that they regularly raised the issue of costs when discussing treatment options with patients. The study, conducted by the Tufts Center for the Study of Drug Development with support from the US Food and Drug Administration (FDA) found that costs do in fact influence oncologists’ treatment decisions, so much so that they omit discussion of very expensive treatments when they know the cost will burden their patients. Tufts also uncovered the fact that new oncology drugs have a “disproportionately high share of FDA priority review ratings, of orphan drug designations at approval, and of drugs that were granted inclusion in at least one of the FDA's expedited access programs. US regulatory approval times were shorter, on average, for oncology drugs, but US clinical development times were longer on average.”

In turn, the American Society of Clinical Oncology assigned a task force in April 2007 to study the oncology workforce, which will follow the reimbursement schedule and related cost issues for cancer docs.

No doubt some oncologists may worry that dealing with these cost issues upfront, at diagnosis, could hurt their businesses, should patients decide they are unwilling to discuss it. Most recently, prescribing chemotherapy to patients was a primary source of revenue for oncologists. MSN covered this topic in late 2006, even accusing doctors of overprescribing in an effort to actually save money by moving treatments out of the hospital setting.

Whatever side you take, it’s a tough reimbursement world out there.

Additional Resources:

Drug Sales Bring Huge Profits, and Scrutiny, to Cancer Doctors

Tough Insurance Climate, Costly Gene Dxs

Understanding Medicare Reimbursement for Cancer Care