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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.

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Presentation on theme: "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."— Presentation transcript:

1 Update on Cancer Policy Issues 9/17/2014 Dr. Peter B. Bach Director, Center for Health Policy and Outcomes Memorial Sloan Kettering Cancer Center

2 Outline FDA approval paths Payment reform proposals Quality measurement in cancer Pricing and prices Shifting site of care for cancer The Dialogue on cancer

3 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. edingaccesstoimportantnewtherapies/ucm htm#summary

4 Recently Approved Cancer Drugs: costs for a month of treatment at initial FDA approval Brand name(s) Year of FDA approval FDA Approval PathwayMonthly cost (2013 $'s) Kadcyla2013Priority Review$10,635 Pomalyst2013Accelerated Approval$11,336 Mekinist2013Accelerated Approval$8,812 Tafinlar2013Accelerated Approval$9,411 Xofigo2013Priority Review$12,455 Gilotrif2013Priority Review$5,500 Imbruvica2013Accelerated Approval$10,900 Gazyva2013Breakthrough Therapy$7,167 Zykadia2014Accelerated Approval$13,276 Cyramza2014Priority Review$13,036 Keytruda2014Breakthrough Therapy$8,725

5 Payment reform Bach PB. Reforming the payment system for medical oncology. JAMA : the journal of the American Medical Association 2013;310:261-2.

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7 How we pay matters

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9 CMMI’s Oncology Care Model (OCM) for Bundled Payments Summary from the Advisory Board Company: oncology-care-model-key-takeaways-and-questions

10 CMMI’s OCM: Quality Measures for Performance Payments Summary from the Advisory Board Company: oncology-care-model-key-takeaways-and-questions

11 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..

12 COA’s Payment Reform Proposal: 4 Phases el_overview_v pdf

13 Episode payment: What incentive does oncologist face? (lung example)

14 Metastatic Hormone Refractory Prostate Cancer

15 Why bundling saves money Medicare Cost / Patient Calibrate payment based on average utilization Program Savings FFSInitial EBP Recalibrated EBP

16 Payment for Pathway Adherence Pathways tell doctors which treatments to use in common conditions Mostly payer contracts linked to pathways ask for 80% adherence

17 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

18 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

19 Rising prices of cancer drugs

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23 The Zaltrap story ZaltrapAvastin Median survival benefit: 1.4 months Cost per QALY gained: $585,200

24 3 NYT headlines

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26 ASCO Value Initiative

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29 A Tale of Two Drugs $11,375$13, XalkoriZykadiaDrug ADrug B

30 Meanwhile, care is shifting Moran report: US Oncology Network, Community Oncology Alliance and ION Solutions

31 Site of care: Why and What now? Collapsing margins on doc office side (ASP+6 to ASP 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

32 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

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35 340B: Expansion

36 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

37 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.

38 Milliman (2013) Report

39 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

40 Analysis and impact of passing through 340B discounts FOLFOX6 HOP total$6, POV discount$ B HOP total$4, B HOP/POV75% FOLFIRI HOP total$4, POV discount$ B HOP total$3, B HOP/POV79% CapeOX HOP total$1, POV discount$ B HOP total$1, B HOP/POV73%

41 Thank you


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