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Oral Parity Laws for Oncolytics

Peter L. Salgo, MD; Arturo Loaiza-Bonilla, MD, MSEd, FACP; Carl T. Henningson, MD; Steven L. D’Amato, RPh, BSPharm; and Noa Biran, MD, discuss the nuances of oral parity laws for oncolytics and how they affect treatment.
Published Online: Mar 12,2018

Peter L. Salgo, MD: Now, that brings us to something called the oral parity laws. Based on the name of this, and after our discussion as to how these differ in terms of silos, I’m pretty sure I know where this is going. Tell me about the oral parity laws. Who wants to start us off?

Arturo Loaiza-Bonilla, MD, MSEd, FACP: I’m in the Society of Hematology and Oncology here in Pennsylvania. We’re actually involved in the oral parity discussions at the state level. But, this is not a new concept. This has been happening all along. Each state has been talking about it. Right now, there are over 40 states doing it, but there’s no federal law covering oral parity.

Peter L. Salgo, MD: Define “oral parity.”

Arturo Loaiza-Bonilla, MD, MSEd, FACP: Oral parity means that we consider the cost of an oral drug, intended to be used against a certain cancer as an oncolytic. If we have an equivalent drug that is intravenous (IV), the cost should be the same. So, when we’re putting that into perspective, supposedly we’re going to decrease cost, because the issues with decreasing the donut hole and decreasing access will be overcome. However, the state laws are limited. What we have seen overall is that the cost of care, which is what we’re looking for in the big picture, has not decreased. It’s actually getting higher. So, the laws themselves have a nice principle. However, we haven’t been able to lower the cost the way we intended to. We need to basically reframe the whole system. I think there’s a challenge ahead.

Peter L. Salgo, MD: It seems to me that the intent of the oral parity laws, at least, was to lift these oral drugs out of this oral drug silo and dump it into the other one, so that they’re equivalent. But, knowing politicians, I’ll bet somebody is thinking of taking the IV drugs and lifting them up and making them more expensive. Am I right?

Carl T. Henningson, MD: I would say so.

Steven L. D’Amato, RPh, BSPharm: You opened up another can of worms. Sometimes the payers will try to drive some of the injectable drugs into the pharmacy benefit.

Peter L. Salgo, MD: I knew it.

Steven L. D’Amato, RPh, BSPharm: So, that does happen. We refuse that. We refuse that all the time. We want to keep that under the medical benefit, certainly for any infused agent. We don’t want to see that go to the pharmacy benefit side. With a federal oral parity law, what we want is for patients to pay the same out-of-pocket amount—the same co-pay)—whether they come into the office for an intravenous treatment or they receive an oral treatment. That’s the bottom line. Their out-of-pocket expense should be the same. To your point, the state laws haven’t addressed that. The state laws only may address 1 plan or a fraction of the plans. There really is no parity. The only way to really fix that is with a federal oral parity bill. It needs to be nationwide. That would reel that all in.

Peter L. Salgo, MD: I’m a pharmaceutical company. I could hear the argument. There’s some basis for it: “But these are brand-new drugs. I just put a billion dollars of R & D into these drugs. You’re not going to allow me to get compensated?”

Steven L. D’Amato, RPh, BSPharm: Oh, they get paid. The payers are going to pay more. That’s why you have the payers lobbying against oral parity. They’re going to pay more money.

Peter L. Salgo, MD: So, in other words, whether the payers pay or the patients pay, the drug companies…

Noa Biran, MD: Exactly—they’re going to get their money.

Steven L. D’Amato, RPh, BSPharm: They’re going to get their money.

Noa Biran, MD: It’s just the out-of-pocket expense…

Steven L. D’Amato, RPh, BSPharm: That’s right.

Carl T. Henningson, MD: Not only that, but the cost of doing clinical trials is less than it used to be. We used to have to go through phase I, phase II, phase III trials to get drugs approved—large trials. Now, we have small phase II trials—even phase Ib trials that, in some cases, get drugs approved.

Arturo Loaiza-Bonilla, MD, MSEd, FACP: Like pembrolizumab for MSI-high patients. There are only 5 different clinical trials, and they have the responses. Well, I guess that’s a positive for the patients. Now we’re getting the FDA to be more open-minded, to take on earlier trials for cancer care.

Noa Biran, MD: I think it depends on the disease. In some diseases, where the market is saturated, you still are required to do all of the trials. The reason the pharmaceutical companies charge so much is not because of the cost of clinical trials but because of all of the failed drugs that don’t make it to the market. They invest billions of dollars in these drugs that eventually don’t even get FDA approved. That’s their explanation.

Carl T. Henningson, MD: But, on the other hand—like with pembrolizumab and nivolumab—these are drugs that now are being used in almost every disease state. The cost didn’t go down as their market share increased.

Peter L. Salgo, MD: You’re telling me that the drug company is going to get their money anyway? This is a fight over reimbursement for the same nut, whether it’s going to come from the patient’s pocket or it’s going to come from the plan’s pocket? Is that what this is all about?

Carl T. Henningson, MD: Yes.

Peter L. Salgo, MD: Do the drug companies have a stake in this at all, or is this all the plans?

Carl T. Henningson, MD: Oh, the drug companies have a huge stake. They’re making a lot of money out of it.

Peter L. Salgo, MD: But, they’re going to make the same money—as you said—either way, whether it’s out of the out-of-pocket expense or out of the plan.

Carl T. Henningson, MD: I don’t think they care who pays, as long as they get paid.

Peter L. Salgo, MD: That’s what I thought.

Noa Biran, MD: Yes. The problem is, eventually the money is going to run out. This is not a sustainable model.

Steven L. D’Amato, RPh, BSPharm: It’s not.

Carl T. Henningson, MD: Yes.

Peter L. Salgo, MD: So, the oral parity laws—do they make it sustainable?

Noa Biran, MD: No, they don’t solve the issue.

Arturo Loaiza-Bonilla, MD, MSEd, FACP: Because this is done at a state level, they’re not mandating Medicare to do any of this. The reimbursement for Medicare is completely unscathed. You don’t do anything with that. There’s no oral parity for Medicare itself.

Peter L. Salgo, MD: All right, I’ll be Dumbledore. I wave my magic wand—it’s Medicare. We have oral parity. It’s not at the state level but at the federal level. Does that fix the problem?

Noa Biran, MD: Maybe for the patients for short term. For short term, you help the patients out.

Carl T. Henningson, MD: But not society.

Noa Biran, MD: Not society.

Carl T. Henningson, MD: There’s no control on the cost of these drugs. The numbers are just being made up as to how much they’re charging for these drugs.

Noa Biran, MD: Yes, they’re being made up.

Arturo Loaiza-Bonilla, MD, MSEd, FACP: We should look into the efforts of ASCO [American Society of Clinical Oncology]—like the value-based models etc. We should be looking at what the real benefits of certain drugs are—not just 1 month of progression-free survival improvement—and see what drugs are actually worth giving to our patients. If something increases survival by 10 years, a million dollars is worth a shot. But, if it’s something that just increases survival for 1 month with toxicities, then we shouldn’t be paying that at all.

Carl T. Henningson, MD: Absolutely.

Arturo Loaiza-Bonilla, MD, MSEd, FACP: Just because the FDA approves it doesn’t mean that it’s the best drug for my patient.

Peter L. Salgo, MD: But then again, there are 2 issues here. One is this parity, which is, what pocket is the money going to come from? But the bigger issue is, should there be money coming for all of these drugs in the first place, and should there be somebody stratifying which drugs are worth paying for? If the other drugs are not, then we can shave those down and save money. Is that it?

Carl T. Henningson, MD: Yes.

Peter L. Salgo, MD: Who’s going to do that?

Steven L. D’Amato, RPh, BSPharm: Those talks are ongoing. People are starting to talk about that—reimbursement based on efficacy. You may have 1 drug that’s in multiple spaces. Why should you pay the same price when the outcomes are markedly different in 2 different disease states with the same drug? That gets into tiering reimbursement based on efficacy. It is complex to do, but that’s how it should go moving forward. The same thing happens with the PD-1s and PD-L1s. We don’t know for how long those patients should be on those agents. Maybe it should only be for 2 years, and then they should stop? Maybe there should be a cap on the price of those agents in certain disease states? Those are things we need to wrestle with. There are no cost controls. What allows a company to raise 2 of their most profitable drugs by 19% in 1 quarter? That’s unregulated. I wish I could raise my prices 19% every time I want. I’d be fat city.

Noa Biran, MD: That’s not appropriate.

Steven L. D’Amato, RPh, BSPharm: That doesn’t happen.

Noa Biran, MD: It’s a problem.