Drug Spend, Pricing, and Development

During this segment, the managed care stakeholders discuss drug spending in oncology and its relation to overall costs of cancer care. Additionally, they consider which stakeholders should work with pharmaceutical companies during the early stages of drug development, and to what degree stakeholders should collaborate with pharma.

Despite their high costs, newly emerging oncology drugs make up only 20% to 25% of overall oncology spend, and certain treatments may be associated with savings when total costs of care are considered, notes Brian Kiss, MD. For instance, some treatment options are associated with reduced length of hospitalization. However, Michael Kolodziej, MD, says that within his organization, data have demonstrated that this percentage is 35%.

Dr Kolodziej explores the impact of new, high-cost agents such as PD-1/PD-L1 drugs as treatment options for different types of cancer and discusses treatment effectiveness and appropriate drug pricing.

The use of contracting may result in innovation in terms of payment for drugs, comments Scott Gottlieb, MD. On the other hand, current government regulations stifle this innovation.

Continuing the discussion, Bruce Feinberg, DO, asks Dr Gottlieb to consider which stakeholders should work with pharmaceutical companies during the early stages of drug development.

Currently, large pharmaceutical companies are working alongside payers during the development of new drugs by providing information needed to make coverage decisions, notes Dr Gottlieb. Although discussions with payers are important, he adds, pharmaceutical companies should also work with consolidated delivery systems during drug development.