Expert Roundtable Panel Discussion: The Future of Payer Management of Oncology

The meeting concluded with all participants on stage to field questions on a variety of topics. The moderator of the event was Clifford Goodman, PhD, senior vice president of The Lewin Group, and the panel included:

Peter B. Bach, MD, MAPP, director, Center for Health Policy and Outcomes, attending physician, Memorial Sloan- Kettering Cancer Center; Michael E. Chernew, PhD, professor of health care policy, Harvard Medical School, and coeditor-in-chief, The American Journal of Managed Care; Jeffrey D. Dunn, PharmD, MBA, formulary and contract manager at SelectHealth, Inc; Bruce A. Feinberg, DO, vice president and chief medical officer, Cardinal Health Specialty Solutions; A. Mark Fendrick, MD, professor of medicine and health management and policy, Schools of Medicine and Public Health, University of Michigan and coeditor-in-chief of The American Journal of Managed Care; Ira M. Klein, MD, MBA, FACP, chief of staff, Office of the Chief Medical Officer, Aetna; and Andrew L. Pecora, MD, FACP, CPE, chief innovations officer and vice president of cancer services, John Theurer Cancer Center at the Hackensack University Medical Center and president of Regional Cancer Care Associates.

Moderator: If we are indeed experiencing some kind of turning point or even tipping point in the way oncology care is being priced, what do you expect will be the effect on what is innovated or how it is innovated in cancer care?

Dr Bach answered this question by stating that the most notable innovation in cancer may be less about new treatments than about new delivery systems. Dr Bach said, “On the pharmaceutical side, the returns on investment in research and development are already gone, and most of the big companies are not investing in that and shareholders aren’t giving them credit for it.” Instead, companies will find innovative ways to produce competitive drugs more cheaply. “I think the day of every new drug being simply set to a price that the market will bear, irrespective of the value it delivers, is one that will be seeing its sunset,” speculated Dr Bach.

Dr Chernew added there may be a decline in innovative medicines as it becomes harder to show a drug’s “value.” He said: “The ability to make money on a drug that is perceived as a marginal improvement, I believe, is going to be a lot harder in the future unless the companies can find ways to cut money out from other parts of the system, maybe unrelated to oncology….And I do think that will have an effect on innovation, and I think that’s a shame and something we have to think about going forward.”

Dr Klein was more optimistic and noted that as we continue to subtype various cancers, the drugs will be more specific to a smaller cohort of patients: “The nature of biologic drugs is that they’re going to be applicable to a much narrower cohort of patients. So I think on a just-dollar basis, there’s no such thing as a huge blockbuster drug now because there’s no such thing as a huge applicable population. There’s going to be segments.” He added: “If there is an ability to efficiently generate a good match for a specific tumor subtype, I think those products will be successful.”

Moderator: What do payers expect to see insofar as the pipeline for innovation?

Dr Klein said that at Aetna, “What we’re trying to do is migrate at least a third of our business from the traditional insurance business over to the healthcare services business. And the way to do that is to be an aggregator and processor of important health information. And the way we’re doing it is with a health information portal.” He added that the goal is to create a system that centers on the clinician and the patient. “What you get out of that is the ability to take lab, claims, pharmacy data, and also genetic testing data, put it through a logic engine filter, and bring it to an oncologist who, at the point of decision for care, can then actually prescribe the tailor-made, personalized medication therapy.”

Moderator: Do clinicians feel threatened or constrained by the cost pressure that may affect innovation?

As a clinician, Dr Pecora did not say whether he felt threatened or constrained. He was, however, concerned that the discussion about innovation was focused on innovating payment strategies instead of innovating treatment strategies. Dr Pecora said, “The pace of discovery and our ability to open up the black box now is much greater than it’s ever been and that’s only going to accelerate. So we don’t want to put reimbursement strategies in place that slow that down.” Dr Pecora believes those innovations will lead to more cost efficient ways to treat cancer.

Moderator: Will new healthcare payment plans still have room for expensive cancer drugs?

Dr Feinberg said that he was not sure how much the new payment plans would be willing to accommodate new innovative but expensive drugs. However, he did caution that we still have much to learn about how all of us pay for certain procedures or medications. Dr Feinberg stated: “As we remove all financial incentives and we see marginally neutral responses to drugs, we’re starting to see behavior that maybe isn’t as predictable. We’re not seeing the shift away from certain things, and I think it’s because it’s driven by habit. It’s driven by psychology. It’s driven by a selective learning process in which it reinforces their worldview that I’m going to treat it that way. And I think that is a piece that we’re not addressing as we continue to focus on the financial modeling.”

Moderator: As new drugs enter formularies and old drugs are removed, are the rules of engagement changing?

Dr Dunn of SelectHealth, Inc, stated that the rules are dramatically changing since their business model is changing. He said, “If you look at the estimations on what’s going to happen to the pharmacy budget over the next 3 to 4 years, half our budget is going to be in specialty. And this is different than it was 3 or 4 years ago because there’s been an obvious move toward oral pharmacy specialty drugs….And so how benefits are designed around that has to change.” To adapt to these new trends, Dr Dunn said they have acknowledged that within 5 years they want to have a trend to be consumer price index plus 1%. “So we are heavily jumping into the accountable care organization model, redesigning benefit designs, collaboration, payment reform.”

Moderator: What does value-based insurance design mean in the context of specialty pharma now?

Dr Fendrick, co-editor-in-chief of The American Journal of Managed Care, pointed out that this question deals with some very tricky issues that may not be easily measured for cancer care. He said, “For a drug in oncology that will cure cancer 90% of the time, it should not cost the same as a drug that will extend life by 6 weeks to 6 months.” Dr Fendrick further noted that with cancer care, there is a lot of nuance associated with care. “Every stakeholder involved with cancer care understands that clinical nuance is better than the status quo of onesize- fits-all.” Furthermore, “Things that are profitable…are [those] that produce the outcomes that they’re supposed to produce, like better education or transportation or other types of things. In healthcare, that is hardly ever the case. The things that produce the most health for the money, you know them, we’ve known them, they are things that are typically and traditionally underpaid. And those that would have the most marginal cost-effectiveness ratios, or whatever measure you put on them, tend to be the most profitable.”

Moderator: Do you see a pathway to implementing value-based insurance design in specialty pharma?

Dr Dunn stated that his company has attempted to apply value-based insurance design (VBID) to conditions such as asthma and diabetes but they did not see an improvement in compliance and employers were reluctant to pay for it. However, Dr Dunn thinks that VBID may work in specialty pharmacies. “I think VBID is more applicable, actually, to specialty than it is in some of those wider, broader categories. But it’s a little bit different definition of VBID. It’s more of the pathway. It’s the more cost-effectiveness/comparative effectiveness research type approach.”

Dr Klein added that VBID is designed to provide incentives to change behavior and while it is a logical means to reduce healthcare costs, employers are reluctant to pay for this arrangement.

Dr Fendrick echoed those sentiments by concluding, “The idea of clinical nuance and value-based insurance design, it’s like apple pie, it’s intuitive, it makes sense. It’s been relatively slow to adopt.”

Moderator: Can you comment on the perceived lack of transparency that occurs with pathways?

Dr Feinberg disagreed that there was a lack of transparency: “In our case, every one of our contracts that’s done on a regional basis, the pathways are then disseminated to the entire provider network. The steering committees then meet on a quarterly basis and review new information like new labeling, new drug introduction, black box warnings, etc, and they update accordingly.” In addition, he said that physicians in their group have a “tremendous sense of comfort in knowing that a group of their peers endorses what they’re going to do, that not every situation is a situation that you see 10 times, 100 times a year, sometimes not even a lifetime.”

Dr Dunn also stated that he felt that his company’s pathways are transparent. “The policies and procedures would be publicized and published because our organization is risk averse, and it’s an evidence-based organization. So we’re not going to put out something that is not backed up with evidence,” he said, adding, “What’s not going to probably be shared publicly, initially, is the reporting incentive type piece, how are providers doing.”

Dr Chernew applauded the organizations that promote transparency but was concerned that the fundamental question was not being properly addressed. “I think most patients, for example, won’t be able to evaluate them (pathways). And they certainly won’t be able to evaluate them where they’re making a choice about what delivery system to be in.”

Moderator: How is cancer care going to change the most as a result of the factors we discussed today?

• “The organizations in which oncologists work are going to be bigger and more heavily managed,” stated Dr Chernew.

• “There will be information and incentives placed on the actual consumer to go to places like centers of excellence,” said Dr Fendrick.

• According to Dr Klein, “People are going to start demanding more value for every dollar they spend. And the only way that can be validated or have it be transparent and uniform for all is to create a cost equivalent so that people can look at what they’re getting for what they pay.”

• “There’s been a meaningful discussion among stakeholders to go beyond price to this issue of value and not just the lowest price provider, which gives me some optimism moving forward,” stated Dr Fendrick.

Moderator: What do you think will be worse and better about cancer care in the year 2020?Worse:

• “As the baby-boomer bulge moves into retirement, I don’t think that we’re going to see as much of the healthy elderly as we think,” replied Dr Klein.

• According to Dr Dunn, “My fear is 8 years from now we’ll be sitting here having this exact same discussion.”

• “We’re going to worry a lot more about disparities. We will have mechanisms that are going to make it difficult for some segments of our population to get access to all those treatments,” stated Dr Chernew.

Better:

• According to Dr Klein, “We’ll have taken information from individual patients that includes not just their disease and stage, but also their tumor marker status, other biologic marker status, their performance status at time of diagnosis, their demographic information. We will have taken that for hundreds of thousands of people and we will have sorted it and attached it to different regimens, and we will understand from comparative effectiveness research what works best.”

• “Things like payment reform, benefit design changes, investments in health information technology will all lead us to evidence-based formularies which are going to improve outcomes and lower costs,” said Dr Dunn.

• Dr Fendrick stated that Section 2713 of the Affordable Care Act mandates that primary preventive services, including cancer screening, will be without cost sharing to any American. He is hopeful that we will see meaningful reductions in preventable cancers.

• According to Dr Chernew, “Treatments are going to be much better.”

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