Ethical Perspectives on Costly Drugs and Health Care

High drug prices have created substantial challenges for patients, physicians, health systems, and payers. High drug prices can affect patient care in many ways, including limiting access to treatment, increasing the burden of administrative tasks, and contributing to physician burnout. Exorbitant drug pricing poses direct challenges for distributive justice, which is concerned with fairly distributing benefits and burdens across society. In this position statement, we discuss ethical concerns raised by high drug costs, primarily focusing on concerns around distributive justice. We consider forms of rationing, approaches to allocation, potential complexities in real-life application, and structural forces contributing to high drug costs. Finally, we consider potential policy solutions and ramifications for individual clinicians.

A case for external reference pricing to regulate drug costs in low- and middle-income countries

Amirul Ashraf and Siew Chin Ong discuss external reference pricing as a possible method of navigating the complex issue of drug pricing in Malaysia.

The Oncology Care Model and lung cancer: Retrospective review of claims and clinical data at a large academic medical center.

62 Background: The Oncology Care Model (OCM) is a Center for Medicare and Medicaid Innovation (CMMI) alternative payment model designed to enhance value in cancer care. Based on a practice’s historical performance, the model predicts a target price for a 6-month episode of care and adjusts for factors such as age, modality received, geographic location, trend factor, and receipt of a novel therapy. Practices are incentivized to reduce costs of care, allowing for a performance based payment if the total cost of care is below the predicted OCM target price. At our OCM practice, when compared to other malignancy types, lung cancer has disproportionately failed to meet the OCM target. The purpose of our review was to explore the contribution of systemic therapy to total cost within the OCM model for lung cancer episodes. Methods: We reviewed claims and clinical data for the OCM Performance Period 6 (PP6), which corresponds to episodes beginning between 1/2/19-7/1/19 and ending between 7/2/19-12/31/19, for all OCM lung cancer episodes at Northwestern Medical Group. Results: 142 patients were identified with non-small cell (n = 128, 91%) and small cell lung cancer (n = 14, 9%). Patients received a PD1 inhibitor either alone or in combination with chemotherapy (n = 87), tyrosine kinase inhibitors (n = 18), both a PD1 inhibitor and a TKI (n = 2), or chemotherapy alone (n = 35). All systemic therapy use was deemed guideline compliant. 46 patients (33%) had at least 1 cancer-related hospital admission during the episode. 19 patients (13.4%) died during the OCM performance period. 39/142 (27.5%) of patients’ episode costs achieved the OCM target. Among the 103 patients whose total costs exceeded the target, drug costs alone exceeded the target in 67 (65%). Drug costs alone exceeded the total target in 59% (n = 63/107) of those who received PD1 inhibitor or TKI therapy and 11.4% (4/35) of those who received chemotherapy alone. 94% (n = 63/67) of patients for whom drug costs alone exceeded the OCM target received anti-PD1 therapy or a TKI. Conclusions: Drug cost alone exceeded the total target in the majority of OCM lung cancer episodes that did not achieve savings, highlighting the dominant role drugs play in the OCM model. With targeted therapy and immunotherapy already the standard of care in metastatic non-small cell lung cancer, and gaining a foothold in earlier stages of disease, accounting for these therapies in the OCM target price methodology will be critical for oncology practices to be successful within such value-based payment models.

The value of pathways on drug costs.

327 Background: Oncology care represents a significant portion of US healthcare spending. Cost of Part B drugs has increased at a rate 5.7x that of overall Medicare spending. As a participant in the Oncology Care Model, drug costs represent a majority of our total costs. Pathways are a clinical decision-support tool that use evidence-based care maps accounting for efficacy, toxicity and cost. Our NCI-designated cancer center implemented pathways in July 2018 to reduce care variation and decrease costs. Methods: We reviewed costs related to pathway utilization over a two year period, analyzing differences in total annual drug cost for patients in three categories: On-Pathway (aligned with pathway recommendation), Off-Pathway (not aligned with recommendation), and No Pathway (not used). Per Member Per Month (PMPM) costs were calculated and a weighted average applied to account for changes in annual drug costs. Results: PMPM drug costs decreased -8% in year 1 (FY19) and -4% in year 2 (FY20) when pathways were used (On- and Off-Pathway). When pathways were followed (On-Pathway) in making treatment decisions, the drug costs were 11% lower than when pathways were not used. The annual impact on drug costs when pathways were used amounted to $2.45 million in year 1 and $1.77 million in year 2 (Table). Conclusions: Pathway use reduced drug costs, a significant variable in oncology value-based care models. This finding highlights the value of clinical decision support tools in reducing care variability, a known contributor to health care costs, in making treatment decisions. Further assessment is needed to determine if these results are similar at other cancer centers to fully realize the impact of pathways on drug costs.[Table: see text]

Medical expenditure for lung cancer in China: a multicenter, hospital-based retrospective survey

Background Lung cancer is the most prevalent cancer, and the leading cause of cancer-related deaths in China. The aim of this study was to estimate the direct medical expenditure incurred for lung cancer care and analyze the trend therein for the period 2002–2011 using nationally representative data in China Methods This study was based on 10-year, multicenter retrospective expenditure data collected from hospital records, covering 15,437 lung cancer patients from 13 provinces diagnosed during the period 2002–2011. All expenditure data were adjusted to 2011 to eliminate the effects of inflation using China’s annual consumer price index. Results The direct medical expenditure for lung cancer care (in 2011) was 39,015 CNY (US$6,041) per case, with an annual growth rate of 7.55% from 2002 to 2011. Drug costs were the highest proportionally in the total medical expenditure (54.27%), followed by treatment expenditure (14.32%) and surgical expenditure (8.10%). Medical expenditures for the disease varied based on region, hospital level, type, and stage. Conclusion The medical expenditure for lung cancer care is substantial in China. Drug costs and laboratory test are the main factors increasing medical costs.

Brand drug companies impeding generic drug company access to product samples: Estimated prevalence and impact on drug costs

Some brand drug companies have stymied attempts by generic drug companies to obtain samples of brand drugs needed to develop and gain regulatory approval for their generic products. This conduct, which has been reported in both the US and Canada, raises drug costs to drug plans and other payors and can lessen competition. The literature to date contains little empirical evidence on the prevalence of this conduct, the attendant effects on generic drug market launches and costs incurred by drug payors. This paper addresses these questions for Canada, using data on the drug development projects undertaken by the members of the Canadian Generic Pharmaceutical Association over the period 2015–2019. I found that about 16% of generic drug development projects were delayed due to originator firm efforts to impede access to samples of their drugs. The median generic drug launch delay (among affected drugs) attributable to the challenged conduct was 6 months. The additional costs to drug payors from the resulting delays in generic drug launches over the analysis period was in the order of $284 million, or $57 million annually. This study did not explore the additional generic drug development costs attributable to the challenged conduct.

Potential non-drug cost differences associated with the use of the fixed-dose combination of pertuzumab and trastuzumab for subcutaneous injection (PH FDC SC) in the treatment of HER2-positive early breast cancer patients in Western Europe and the United States.

544 Background: In patients with HER2-positive early breast cancer (BC), pertuzumab (P) added to trastuzumab (T) and chemotherapy has been recognized as a standard-of-care, improving the risk of recurrence. P and T treatments can be given intravenously (PT IV) or, more recently, subcutaneously − via PH FDC SC. Both methods are comparable in terms of efficacy and safety profiles. However, PH FDC SC allows for a faster infusion than that of PT IV, and this can be associated with lower costs. The aim of this study is to estimate the incremental difference in non-drug costs between PH FDC SC and PT IV for a typical patient receiving treatment for HER2-positive early BC in Western Europe and the United States. Methods: A model-based cost-minimization analysis was performed to quantify mean non-drug cost differences per patient over a full course of therapy (18 cycles). Western Europe: costs in the analysis are based on an archetypal country, and explicitly include estimates for costs for patient chair time, active healthcare professional (HCP) time, usage of non-drug consumables, port-a-cath placement surgeries and patients’ productivity losses. Costs are calculated by multiplying the resource use by its corresponding unit price. Costing data were obtained from literature sources on T SC time and cost savings for Western European countries, and assumptions on PH FDC SC and PT IV times and costs. United States: non-drug costs for the two strategies were estimated using average net reimbursement amounts for relevant procedure codes for intravenous and SC therapy administration among commercial payers in the MarketScan databases. Results: PH FDC SC is estimated to reduce non-drug costs by 73% − 80% in Western Europe, and 75% in the United States. Total monetary non-drug savings per patient over 18 cycles of treatment are estimated in the range of €2,474 − €8,975 in Western Europe, and at $10,138 in the United States. In Western Europe, where the analysis allows for a disaggregation by cost category, cost savings related to savings in patient chair time (excluding patients’ productivity losses) are estimated to account for up to 62% of overall non-drug cost savings. Patients’ productivity losses are estimated to explain up to 11% of non-drug cost differences. Conclusions: The use of PH FDC SC for the treatment of HER2-positive BC can potentially result in substantial non-drug cost savings. These savings could easily derive in overall net cost savings to the healthcare system, contributing to the long-term sustainability of the healthcare spending, while still providing a safe and effective therapy.[Table: see text]