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Insurance Coverage of Oncolytics

Peter L. Salgo, MD; Noa Biran, MD; Steven L. D’Amato, RPh, BSPharm; Carl T. Henningson, MD; and Arturo Loaiza-Bonilla, MD, MSEd, FACP, outline the differences in insurance coverage for oral versus intravenous oncolytics.
Published Online: Feb 21,2018

Peter L. Salgo, MD: Fasten your seat belts—we’re going to be discussing Medicare and Medicaid. Sorry, welcome to the 21st century of medicine. You take a look at oral agents. They’re covered by Medicare under pharmacy benefits, right? And intravenous (IV) agents are typically covered under medical benefits. Help me out here. What’s the difference? How does it work? Why the difference?

Noa Biran, MD: This is a huge problem. What’s happening is, patients are not getting their oral therapy covered or they’re getting minimal coverage for oral therapy.

Steven L. D’Amato, RPh, BSPharm: High co-pays.

Peter L. Salgo, MD: Let’s go back to first principles. One is a medical benefit, and the other is a pharmacy benefit. What is the difference?

Noa Biran, MD: It’s 2 different benefits.

Peter L. Salgo, MD: Two different silos?

Noa Biran, MD: Two different silos. You go to one payer for your hospital and your facility fees and one payer for your medication and all pills. And now, chemotherapy is falling under that category.

Peter L. Salgo, MD: Under the pill benefit?

Noa Biran, MD: Under the pill benefit.

Steven L. D’Amato, RPh, BSPharm: Under Medicare, the only drugs that you can dispense are the ones that have intravenous equivalence under the primary Medicare benefit—so, capecitabine for 5-FU. There are examples where we can bill Medicare for those small numbers of oral agents. But really, the pharmacy benefit versus the medical benefit—that’s where the problem lies. The oral agents do fall under the pharmacy benefit. Medicare patients may have Advantage plans that have different tiers of coverage. Their out-of-pocket responsibility is going to be different. Certainly, on a private payer side, you see the same thing. That’s where there’s inequity between the oral and the intravenous agents, as far as the treatment of our patients.

Peter L. Salgo, MD: They’re both treating cancer. One is an IV drug, one is a pill. One is seen as a benefit that gets reimbursed one way. The pills are getting reimbursed as if you’re going to the pharmacy and you’re buying…I don’t know, atorvastatin…right?

Noa Biran, MD: Yes, exactly.

Peter L. Salgo, MD: One has a co-pay—the oral agents—and one doesn’t. What does this do to adherence? What does this do to physicians’ preferences? And what drives physicians to then prescribe one way or the other?

Carl T. Henningson, MD: Well, patients say that they don’t want to pay these co-pays. They don’t want that to go under their Medicare Part D program because they’re going to be paying a lot of money out. They’re not used to that. These drugs, unlike atorvastatin, are 100,000 times more expensive.

Peter L. Salgo, MD: I get really upset that if we’ve got a great drug, and we’ve got an oral drug versus an IV drug, just because it’s an oral drug, the patient is on the hook.
Carl T. Henningson, MD: Right, absolutely.

Peter L. Salgo, MD: Who thought of this crazy system?

Carl T. Henningson, MD: The insurance companies.

Peter L. Salgo, MD: They did. Do I dare ask him why? I’m going to ask him. Why?

Carl T. Henningson, MD: Because they don’t want to pay the high costs of these drugs. They know that if the patients have to pay a high co-pay or the whole cost of the drug until they get out of their donut hole, they’re not going to use them.

Peter L. Salgo, MD: That’s strange.

Arturo Loaiza-Bonilla, MD, MSEd, FACP: For Medicare, when Part D was developed, we didn’t have this many drugs orally for chemotherapy. There were just a few of them in the last decade, when we were actually booming up in the stock market. Well, right now, too. But there wasn’t deficit, at least. So, we were in surplus for the budget.
Peter L. Salgo, MD: Are you saying that it was sort of an oversight because there just weren’t a lot of drugs to pick from?

Arturo Loaiza-Bonilla, MD, MSEd, FACP: Over time, more drugs were developed. They kept putting them in the same bucket for the pool of money. Now, we are running out of that money, and we have to rationalize the cost.