Rapid oncology innovation raises management challenges for payers

March 31, 2017

Oncology is a complex and rapidly-evolving management challenge for payers.

Operationalizing and implementing a value paradigm for cancer care remains a complex challenge, according to a speaker at the AMCP Managed Care & Specialty Pharmacy Annual Meeting, in Denver, during the March 30 session, “The Present and Future of Oncology Care Management.”

Oncology costs are rising, increasing pressure on management programs, but the heterogeneity of malignancies (even within a given cancer type) make it a “tricky” management challenge, said Jeremy Schafer, PharmD, MBA, senior vice president and director of specialty solutions at Precision for Value.

“There was a time when you just didn’t touch oncology as a payer,” he said. “A lot of life-and-death disease do not involve emotions as much as oncology. There is a high risk of pushback from patients and providers, and media exposure.”

Oncology has long been “medical-benefit heavy,” which can be more difficult to manage effectively than pharmacy benefits. But even pharmacy management is more complex for oncology than other diseases.

Under Medicare Part D regulation, oncology is a protected class and payers are required to accept clinical guidelines by professional bodies like the National Comprehensive Cancer Network (NCCN), Schafer said.

“That further limited your ability to aggressive manage in oncology,” he said. “A lot of oncology products have minimal competition; a lot of products have carved out niches that are unique.”

Now managers face a different challenge: the “dizzying” pace of innovation, Schafer said.

Innovation complicates oncology management

“There are 836 drugs and vaccines in the oncology pipeline-123 pipeline agents for lung cancer alone” he noted-80% of which are first-in-class agents. “A lot will fail, of course, but when you consider managing lung cancer in the future, that’s a pretty daunting prospect, especially when you consider how many of these agents are first-in-class.”

There is also rapid change for existing classes of agents, like PD-1/PD-L1 immune checkpoint blockade cancer immunotherapies, he said. “We’ve had three approved agents since 2014, with indications covered by at least one of these agents for non-small-cell lung cancer, head and neck cancer, melanoma, bladder cancer, renal cell carcinoma, and Hodgkin’s lymphoma.”

And additional indications-and combined-agent regimens-are in the PD-1/PD-L1 pipeline.

“It’s hard to chart out long-term strategies-even in a year, when the treatment paradigms are constantly upset and are going to change,” Schafer said.

Next: Further complicating matters

 

 

Further complicating matters

Oncology costs are rising with a projected 7.5% to 11.5% increase each year through 2020, he reported.

At the same time, payer contracting is becoming common in the competitive oral oncolytics market, for example for the cancer drugs Zytiga (abiraterone acetate), Xtandi (enzalutamide), Tasigna (nilotinib), and Sprycel (dasatinib), and patient out-of-pocket expenses are growing, with higher deductibles and copays.

“You’re seeing more and more of the concept of ‘financial toxicity’ regarding how much patients must pay,” he said. “This is creating a market dynamic, more and more, where payers are being asked to manage oncology in ways they did not used to do.”

Payer management of oncology “continues to evolve,” Schafer said. “When I started in this field, oncology was not managed; you left it alone. Then came formulary reviews. Then, with more and more biomarkers coming along, came prior authorizations. Then came channel limitations and preferred products and pathways.”

Value in oncology management

More recently, the concept of value has arrived in oncology management.

“How do you assess value and what is ‘valuable,’” Schafer said. “Thankfully for the value-inclined, is the rise of value frameworks and tools that gained prominence at the same time.”

Memorial Sloan Kettering Cancer Center developed its Drug Abacus, and the American Society of Clinical Oncology (ASCO), the NCCN, and the Institute for Clinical and Economic Review (ICER) all promulgated drug value frameworks.

“ICER works on different categories but the three others-NCCN, ASCO, and Memorial Sloan Kettering-are oncology-specific,” he noted. “These are credible bodies to be talking about these things. I’d have loved to have had these things when I was a payer and we only had NICE guidelines from the U.K.”

These tools are starting to be used by external panels to identify preferred products. A 2016 survey suggested that a quarter of payers are already using the three oncology-specific frameworks and another 40% plan to do so in the future, Schafer said. Another survey conducted in January 2017 showed that a third of 21 payers surveyed see the value frameworks’ importance for their work as increasing.

“That’s pretty good traction,” he said. “Some payers are optimistic and are thinking about different ways to implement value frameworks in oncology. Others are cautious; they want to see large trials of value-based risk sharing with transparent structure and publicly-shared results.”

Real-world data will be key in uptake, Schafer said.

“What kind of evidence can you get and how can you make it meaningful?” he said. “Number one, particularly in oncology, it’s going to be difficult to attribute outcome changes. If I start on a pancreatic cancer drug but pass away a month later, is that a drug failure? How do you get endpoints that are relevant, that you can follow, and that will be useful?”

Rather than emphasizing value-based arrangements, however, some payers are trying to find ways to encourage providers to think more like payers-to think about costs, Schafer said.

“An oncologist who starts seeing the rise of capitated and risk-sharing models, that provider will start to think more about the cost-and value-of therapies,” he explained. “That’s beginning to be a trend. When we look at oncology value frameworks, other than ICER’s, those three tools were created by physician-led organizations.”