March 21, 2019 at 5:00 am ET
As a physician and community oncologist, drug costs are something my patients ask me about regularly. Seeing patients pay high prices for drugs and services covered under Medicare Part B is something that should give all providers and medical practitioners heartache, particularly when it involves treatments like chemotherapy and other potentially life-saving cancer therapies.
For that reason, I welcome structural changes to Medicare’s reimbursement system that show promise for lowering costs and improving access for outpatient services.
An attempt at making this change was announced in October by the Trump administration. The proposal — the “International Pricing Index Model”– while well-intentioned, will unfortunately do more harm than good.
Through an Advance Notice of Proposed Rulemaking, the administration announced its intention to lower the reimbursement rates of certain physician-administered drugs by basing reimbursement for these medications on the average price paid by 16 other “economically similar” countries. However, these countries — which may include nations such as Denmark, Belgium and Greece — often set artificial price controls and certain access constraints that could threaten my patients’ ability to obtain important cancer therapies.
While the idea of lowering drug payments by tying them to prices paid in other countries might seem appealing at first, a closer analysis of the facts paints a different picture. Despite the Centers for Medicare and Medicaid Services’ assertion that the IPI model will reduce drug costs, a recent study published by researchers from Avalere Health says otherwise.
According to these findings, since a substantial majority of seniors enrolled in Part B have supplemental insurance plans such as Medicaid, Medicare Advantage and employer-sponsored care, the cost sharing associated with these auxiliary plans already covers the out-of-pocket payments the IPI model seeks to lower. Thus, if the model were to go into effect, less than 1 percent of seniors in Medicare would see any kind of savings for the 27 drugs included in the proposal. Thus, the IPI Model, regardless of all the noise, would do little to lower drug costs for Medicare patients.
Along with having negligible benefits for Part B beneficiaries, the proposed model will also disrupt the important relationship between oncologists and patients — which is fundamental to the delivery of individualized and effective cancer treatment. Under the proposed rule, CMS would pay third-party private vendors a “target price” determined for a certain drug based on the average payment for that drug in other economically similar countries. These third-party vendors would then be responsible for acquiring the drugs from manufacturers and distributing them to health care providers.
The imposition of these vendors into the treatment delivery process does nothing but restrict my ability to make proactive and personalized decisions for patients. Fighting cancer requires complex dosing adjustments and highly specified treatment regimens that are administered under the close supervision of experienced medical professionals.
For me, successful treatments are always the result of a cooperative relationship between myself and the patient and often require point-of-care modifications in chemotherapy dose and alterations of the support medications. Imposing a third-party middleman into this process will only make my job harder, lead to delays in treatment and potentially compromise the treatment outcomes of my patients.
In all, the administration’s goal to address drug prices is well-intentioned, but the IPI model is an insufficient answer to the question of how to lower the cost of prescription medications. Reducing the cost of care for patients is of paramount importance to myself and others, but we cannot address big problems with solutions that compromise patient care. Furthermore, I object to a mandatory model that will in effect be an experiment on half of the Medicare population, without a clear plan for analysis or the oversight of institutional review boards or other bodies in place to protect participants of clinical trials. Instead of imposing mandatory models on the cancer care community, the administration should promote a more patient- and physician-centered approach to lowering drug costs.
Engaging with health care providers and building voluntary models that prioritize lower costs through value-based solutions is the sounder approach — as evidenced by programs such as the Oncology Care Model, through which my practice and practices like ours in The U.S. Oncology Network have already demonstrated. In the first half of the program, we have achieved greater than $20 million in cost savings with a decrease in utilization of unnecessary emergency room visits and improved team-based care-delivery.
In stark contrast to the administration’s IPI proposal, value-based models such as OCM represent the kind of “bottom-up” solution to lowering drug costs, which I believe will, in the end, help us overcome this pressing problem.
Lucy Langer, MD, is a clinical oncologist with Compass Oncology in Portland, Ore., a part of The U.S. Oncology Network.
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