Transcript Update on Cancer Policy Issues

Update on Cancer Policy Issues
9/17/2014
Dr. Peter B. Bach
Director, Center for Health Policy and Outcomes
Memorial Sloan Kettering Cancer Center
www.MSKCC.org
Outline
• FDA approval paths
• Payment reform proposals
• Quality measurement in cancer
• Pricing and prices
• Shifting site of care for cancer
• The Dialogue on cancer
The FDA’s (unconventional) Approval
Pathways
• Fast Track
– For drugs that treat serious conditions and fill an unmet medical need.
– Provides more frequent FDA review and correspondence, accelerated approval,
priority review and rolling review.
• Breakthrough Therapy
– For drugs that are intended to treat a serious condition with preliminary
evidence of improvement over available therapy.
– Fast track advantages (above) plus ‘intensive guidance ‘ from FDA on an efficient
drug development program.
• Accelerated Approval
– For drugs that treat serious conditions and fill an unmet medical need.
– Allows use of surrogate or intermediate endpoints.
• Priority Review
– For drugs that would provide significant improvements in the safety or
effectiveness when compared to standard applications.
– Directs FDA’s “attention and resources” to application.
http://www.fda.gov/forconsumers/byaudience/forpatientadvocates/spe
edingaccesstoimportantnewtherapies/ucm128291.htm#summary
Recently Approved Cancer Drugs: costs for a month
of treatment at initial FDA approval
Brand name(s)
Year of FDA
approval
FDA Approval Pathway
Monthly cost (2013 $'s)
Kadcyla
2013
Priority Review
$10,635
Pomalyst
2013
Accelerated Approval
$11,336
Mekinist
2013
Accelerated Approval
$8,812
Tafinlar
2013
Accelerated Approval
$9,411
Xofigo
2013
Priority Review
$12,455
Gilotrif
2013
Priority Review
$5,500
Imbruvica
2013
Accelerated Approval
$10,900
Gazyva
2013
Breakthrough Therapy
$7,167
Zykadia
2014
Accelerated Approval
$13,276
Cyramza
2014
Priority Review
$13,036
Keytruda
2014
Breakthrough Therapy
$8,725
http://www.mskcc.org/research/health-policy-outcomes/cost-drugs
Payment reform
Bach PB. Reforming the payment system for medical oncology. JAMA : the journal of the American Medical
Association 2013;310:261-2.
How we pay matters
CMMI’s Oncology Care Model (OCM)
for Bundled Payments
Summary from the Advisory Board Company:
http://www.advisory.com/research/oncology-roundtable/oncology-rounds/2014/08/the-new-cmmioncology-care-model-key-takeaways-and-questions
CMMI’s OCM: Quality Measures for
Performance Payments
Summary from the Advisory Board Company:
http://www.advisory.com/research/oncology-roundtable/oncology-rounds/2014/08/the-new-cmmioncology-care-model-key-takeaways-and-questions
ASCO’s Payment Reform Proposal
• “The ASCO proposal begins to move away from fee for service,
relying instead on five key components to reform payment, maintain
viability of community oncology practices, and control costs.”
• 1. New Patient Payment
• 2. Treatment Month Payment
– There would be four different levels of Treatment Month Payment to reflect
the differences in time and effort involved in treating different patients.
• 3. Non-Treatment Month Payment.
– If the patient is still under the care of the oncology practice but does not receive
any anti-cancer treatment (oral or parenteral) during a particular month..
• 4. Transition of Treatment Payment.
– When a patient begins a new line of therapy or ends treatment without an
intention to continue.
• 5. Continued FFS Payment for Some CPT Codes..
http://www.asco.org/advocacy/physician-payment-reform
COA’s Payment Reform Proposal: 4
Phases
http://www.asco.org/sites/www.asco.org/files/coa_medicare_payment_reform_mod
el_overview_v10-9-6-13.pdf
Episode payment: What incentive does
oncologist face? (lung example)
$8,000
Cost per Month of Treatment
$7,000
$6,000
$5,000
Administration Fees and Supportive Care Costs
Chemotherapy Cost
Potential
Loss for
Physician
$4,000
$3,000
$2,000
$1,000
$0
Potential
Profit for
Physician
Metastatic Hormone
Refractory Prostate Cancer
Medicare Cost / Patient
Why bundling saves money
FFS
Initial EBP
Recalibrated EBP
Calibrate payment
based on average
utilization
Recalibrated EBP
Program
Savings
Payment for Pathway Adherence
• Pathways tell doctors which treatments to use
in common conditions
• Mostly payer contracts linked to pathways ask
for 80% adherence
Cancer Quality Measures
NQF approved
• 60 measures in total
• 82% (49/60) classified as process measures
by the NQF
• 8% (5/60) classified as outcome measures
by the NQF
PCHQR Measures – currently in use
• Safety and Healthcare-Associated Infection—HAI
– NHSN Central Line-Associated Bloodstream Infection (CLABSI)
Outcome Measure
– NHSN Catheter-Associated Urinary Tract Infections (CAUTI) Outcome
Measure
• Clinical Process/Cancer-Specific Treatments
– Adjuvant Chemotherapy is Considered or Administered Within 4
Months (120 days) of Diagnosis to Patients Under the Age of 80 with
AJCC III (lymph node positive) Colon Cancer
– Combination Chemotherapy is Considered or Administered Within 4
Months (120 days) of Diagnosis for Women Under 70 with AJCC T1c, or
Stage II or III Hormone Receptor Negative Breast Cancer
– Adjuvant Hormonal Therapy
• Patient Engagement/Experience of Care
– HCAHP
Rising prices of cancer drugs
The Zaltrap story
Zaltrap
Median survival benefit: 1.4 months
Cost per QALY gained: $585,200
Avastin
Median survival benefit: 1.4 months
3 NYT headlines
ASCO Value Initiative
A Tale of Two Drugs
Xalkori
Drug
A
Drug
Zykadia
B
Year of Approval
2011
2014
ORR
50% (42%, 59%)
61% (52%, 70%)
54.6% (47, 62)
43.6% (36, 52)
Duration of response (months)
9.7 (1.4+, 9.7+)
11.1 (0.9+, 17.7+)
7.4 (5.4, 10.1)
7.1 (5.6, NE)
Reasonable side effect profile
YES
YES
Frequency
twice per day
once per day
Approval required RCT
NO
NO
Number of approval trials
2
1
Total sample size
255
163
First in class
NO
YES
Companion diagnostic codeveloped
YES
NO
---
Which should cost more?
Cost ($2013, at approval)
$11,375
$13,276
Meanwhile, care is shifting
Moran report: US Oncology Network, Community Oncology Alliance and ION Solutions
Site of care: Why and What now?
• Collapsing margins on doc office side
(ASP+6 to ASP + 4.2 to ASP +3)
• 340B drug discounts make hospitals (only
hospitals) far more profitable
• Projected consequences:
– Added costs for private insurance
– Hospital contracted rates high
– Market consolidation = Market power
340B
• Federal program intended to allow some hospitals that
care for the poor to obtain drugs at reduced prices
• Requires drug manufacturers to provide substantial
discounts on drugs administered in the outpatient
setting
• Unintended Consequences
– Shifts in prescribing behavior to more expensive drugs
– Promotion of consolidation between community based
oncology practices and 340B eligible hospitals
– Shifts in the site of care from community practices to
hospital outpatient departments
340B: Expansion
Where is the opportunity?
• Reports suggest care costs more in hospital
than doctor office
– Avalare Health (2012)
• Funded by the Community Oncology Alliance
– Milliman (2011)
• Funded by McKesson on behalf of the US
Oncology Network
– Milliman (2013)
• Funded by Genentech
Site of care: findings
• Milliman (2011) – costs higher in HOP
– Not risk adjusted
– Counts total costs
– Hospitalization rates higher and survival poorer in HOP –
suggests higher level of acuity
• Avalere – costs higher in HOP
– Same issues as 2011 report
• Milliman (2013)
– Average costs (all allowed medical claims) for a HOP
chemotherapy episode were 28-53% higher than POV
episodes across cancer types.
– Only report broken out by some details of cancer
– Seems like potential for cost savings.
Milliman (2013) Report
Anything good about site of care shift?
• Hospitals may be more integrated delivery
networks
• Hospitals can get bigger drug discounts as
larger purchasers
• Hospitals can more easily go to salary/staff
model
• Hospitals have larger balance sheets to
take on risk
Analysis and impact of passing through
340B discounts
FOLFOX6
HOP total
POV discount
340B HOP total
340B HOP/POV
$6,136.53
$478.66
$4,247.76
75%
FOLFIRI
HOP total
POV discount
340B HOP total
340B HOP/POV
CapeOX
HOP total
POV discount
$1,921.57
$138.30
340B HOP total
340B HOP/POV
$1,308.69
73%
$4,555.89
$441.79
$3,231.57
79%
Thank you