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Cost Consideration of Oncolytics

Peter L. Salgo, MD; Steven L. D’Amato, RPh, BSPharm; Noa Biran, MD; Carl T. Henningson, MD; and Arturo Loaiza-Bonilla, MD, MSEd, FACP, review factors affecting the cost of oral versus intravenous oncolytics, including the overall price tag.
Published Online: Feb 21,2018

Peter L. Salgo, MD: We’re going to start talking about cost and reimbursement. When you look at the cost of these oral agents versus the intravenous (IV) oncolytics, we’ve talked about the fact that there are fixed costs that are attendant upon the IV administration. You need an office. You need a staff. You need all of this overhead. When you consider the cost of oral versus IV oncolytics, from a payer’s standpoint or from anyone’s standpoint, is this being factored in?

Steven L. D’Amato, RPh, BSPharm: From my perspective, my physicians have no idea what makes money and what doesn’t. They don’t know.

Peter L. Salgo, MD: Surprise, surprise, surprise. Most physicians that I know think they are great economists. They are terrible.

Steven L. D’Amato, RPh, BSPharm: They are not.

Noa Biran, MD: We are terrible.

Steven L. D’Amato, RPh, BSPharm: From my perspective, it’s the right drug for the right patient at the right time. Regardless of whether it’s intravenous or oral, I want to make sure that my patient is getting the right therapy. When I look at the costs, overall, certainly—as I mentioned earlier—using an oral agent may be less financially attractive to the practice because we’re not reimbursed for the management of that oral agent. Whereas for intravenous agents, as you point out, we get an administration fee and so forth. Certainly, there are advantages on the intravenous side versus the oral side, maybe from a reimbursement standpoint, if the physician doesn’t have control over dispensing that oral oncolytic. To be fully transparent, if you have an in-office dispensing program just like the specialty pharmacies, you’re going to make money doing that service. But, at the same time, we will give patients cash transactions for drugs that they might have to go to Walgreens or another specialty pharmacy and pay cash for. We know that an aromatase inhibitor costs $2. With a specialty pharmacy or the retail pharmacy, it may cost the patient $30 or $40. So, we’ll just dispense it to the patient for $5 in our office. The patient avoids that larger cost, and we’re monitoring the patient. So, that’s just another way to go about it.

Peter L. Salgo, MD: My point was, there’s an embedded cost to the IV therapy. The embedded cost is the facility.

Noa Biran, MD: The facility, the nursing.

Peter L. Salgo, MD: And keeping it going.

Steven L. D’Amato, RPh, BSPharm: Staff, equipment, and everything.

Peter L. Salgo, MD: Again, there’s the economy of scale. That facility is treating a lot of patients per day. But still, it’s an additional cost. So, when you tell me it’s $30,000 a month for the pills and the IV is cheaper, that’s just a drug cost, right? Then, you have to add in all of this ancillary stuff. Where does that balance out? Are people doing that bookkeeping, other than behind the closed doors at the insurance company?

Carl T. Henningson, MD: I think some physicians that have relied on IV chemotherapies, who don’t have dispensing pharmacies, tend to use more IVs. Some of them admit it. They admit it on advisory boards that I’ve been to. It’s surprising to hear that, but you do hear that from some people.

Noa Biran, MD: I have definitely heard that from people. But, at the end of the day, physicians want to make their patients happy because of the big picture—that’s how they’re going to get them to keep coming back to them. You have to have a good referral base. If your patient is happy, they’re going to refer to you and you’re going to do well. I think physicians know that, overall, the first priority is the patient and the quality of life.

Peter L. Salgo, MD: Let me put something on the table. Again, it’s looking at this from a payer’s standpoint. If the physician’s only concern, and maybe it should be the only concern, is the patient’s well-being, and I’ve got a therapy that costs a trillion dollars per pill—“It’s going to be great for you; you need that”—if you do that enough, you break the bank and the country goes bankrupt. Don’t we have a responsibility to be cost-efficient here?

Carl T. Henningson, MD: We do. We’re part of Regional Cancer Care Associates, which is based in Hackensack and spread throughout New Jersey and some other states, as well. One of the things that we’re looking at is following guidelines or following best practice but keeping the cost down. So, if there are 2 equally effective drugs, 1 requires less expense to use, of those drugs. Insurance companies are looking at how much physicians cost the system. How many scans are they doing? How expensive are the drugs that they’re using? How frequently are their patients ending up in the hospital? And so, those are things that will become more important in the future.

Arturo Loaiza-Bonilla, MD, MSEd, FACP: Exactly. Payers are really looking into that, and they’re making tiers for compensation. So, even if you are in network, if you are not following best practices or pathways or certain benchmarks that they’re establishing, they will compensate you differently. So, different facilities will pay you differently, even for the same plan.

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