Expert: Encouraging Innovation Will Be Key to Future of Community Oncology

In an interview with Pharmacy Times, Stephen Divers, MD, discussed the future of home infusion and drug development, and how both issues will be influential in the future of community pharmacy.

Q: Home infusion is a growing piece of the community oncology puzzle, but some experts have raised concerns about safety. Can you speak to how this is being addressed and the role of home infusion?

Stephen Divers, MD: I think there are some real issues with home infusion. If you think about the evolution of oncology, right, we started giving these medicines in the hospital because of concerns about toxicity. And then over time, community oncology really set up the model for outpatient infusion out of the hospital, which is a much more cost-effective setting, right? The site of service is much less. And I think the next logical leap is, well, let's just move that to the home of the patient. The problem is, you know, again, some of these drugs have significant side effects and what it risks for the patient is if you're infusing something that may have real infusion reactions within the home, you won't have the resources there necessary to mitigate that reaction. And then if you just look at the cost associated with home infusion, you know, you'll have 1 or 2 infusion persons per patient. And so, when you look at the provider to patient ratio, it gets very skewed there. And I just don't believe that home infusion, in its current form, has any legs.

The other issue is, you know, maintaining control of the product. How do you assure safety of the product that delivered to the practices, delivered to the home, right? And so, you know, what are the risks associated with that? And then you have the issue with vertical integration of payers and pharmacy benefit managers that want to get into the home infusion space, and then try to control that market. I think it's a very dangerous path to go down. To believe that we're going to purchase, manage this procurement, and supply these products and infuse them in the home in a more efficient manner than what's being done in a community oncology clinic. And so, I think costs are going to rise dramatically with that, I think outcomes will decline with that. And so, again, we're very patient-centric organizations and we want to do what's best for our patients. But I think ultimately, outside of some possible convenience advantages, I think cost and safety may trump that, and I just have trouble seeing in its current format sustainability of any home infusion. You know, we hear tons of horror stories from patients with their oral medications that are going through pharmacy benefit managers, with step up and all these issues getting the drugs to the patient, and loss of chain of command of the product, and how do you, you know, intervene when they can't get them? And what are they going to be doing if they don't get the drug delivered? And you’ve got home infusion setup, so there are a lot of questions about how that, economically, is going to be a successful and efficient model. So, there's certainly going to have to be some changes in the way that's considered before I think any community oncology practices are going to be hugely on board with that.

Q: Rising drug costs are a major concern, and an area where pharmacists are very involved. How do you see this being tackled in the oncology drug market?

Stephen Divers, MD: I think, you know, when we look at actual drug costs for total Medicare spend, the actual drug cost is a small number, right? The majority of the spend is in the acute care setting, near the end of life, and so I think that's really the biggest cost driver, and not the actual cost of drugs. I mean, you know, when we look at the value add, that is improvement in the quality of these therapeutics and improvement in patient survival, quality of life of those patients with decreased toxicities by newer and better drugs.

I'll give you one brief example. In the multiple myeloma space, we've had a lot of great therapeutics evolve, same in melanoma. The median survival in multiple myeloma was 2 to 3 years, 2 decades ago. It's now 10 to 15 years. And so, when you start to do the math on that, yes, those drugs are expensive and can cost several $100,000 per year. But when you start looking at, you know, quadrupling life expectancy and quality of life of those patients, I think you have to factor that into the equation.

So, there's no doubt that the cost of drugs is an issue. We have to address that. But the real drivers of the cost of drugs, I think, are twofold. One is 340B health systems, you know, typically have a 40% to 50% margin on these drugs and that is subsidized by the pharma companies, right? So, the pharmaceutical industry, you know, has to subsidize that. So, if I have to sell my product at 50% discount, then the logical next step is just doubled the price. So that is an enormous cost driver. Again, 340B is important for rural hospitals and underserved areas, you know, so it's not something needs to go away. But it has been bastardized and has resulted in massive increases in cost of product, because, again, it's subsidized by the pharmaceutical industry who have to offset that in some way, and they do so by price increases.

The other issue is vertical integration of pharmacy benefit managers with payers. You know, these are middlemen who really don't provide a meaningful service now, other than to try to decrease utilization. So, the pharmacy benefit managers, I think, you know, are a significant cost driver for these drugs. And so, I think payers are getting wiser, and you're seeing a lot more employers trying to get away from that PBM model. If you think about it, 80% of all the medications in this country go through 3 pharmacy benefit managers, and so there's a lack of competition in that space. And most of those pharmacy benefit managers are vertically on them. So, it's a real issue. And obviously Congress is shining a light on that now and having a number of hearings to address this. So, those, I think, are the 2 biggest cost drivers. I mean, we have community oncology, again, you know, we have a lower cost of care, site of service, and we do focus on the value proposition that is community oncology, and a large part of that is looking at the cost of drugs and trying to choose a lower cost alternative if and when we can, right? And so, you know, whether it be through P&T committees and whatnot, looking at these items, we do everything within our power to try to choose lower cost options when they're available there. And so, I think the incentives are aligned in community oncology.

I think, sometimes we get spears thrown at us because the model is set up such that there's a 4.7% margin and so we're incentivized to use higher cost drugs. But since we do capitalize the purchase of those, I think, actually, the incentives are aligned much more so than, say, in the 340B system where those margins are so much more inflated, right? And so, I think that we'll see what the [Inflation Reduction Act] does, right, where they pick the top 10 drugs and sort of fix prices and see where that goes. I hope and pray that that will not have a negative impact on innovation and development. I have grave concerns about that. And if you look at the patent life, I mean, I've heard several pharma companies say why would I develop anything other than a biologic now, just because I get 3 more years of patent life on a biologic than another. And so, you know, I think we have to be very careful. We obviously want to incentivize lower cost drugs in whatever way we can, but I think we want to avoid negative externalities that come as a result of that. So, we get into a price fixing game that stifles innovation and we lose the value that we've seen in melanoma and myeloma and other disease states. Because of that, you know, I don't want to get into a situation like we have the oil and gas industry where you say, hey, you guys need to lower prices and invest in development, but we're going to make you go away in 10 years, right? Or 5 years or whatever, right? I mean, we're going to be no more oil and gas in 5 years, but I need you to go build a new plant. Man, it's hard to invest the dollars in that. So, we don't want to get in that sort of a situation in the drug space. We need to continue with innovation and continue to develop novel therapies that are less toxic for patients and improve their survival.

And I think, you know, community oncology has been very patient-centric, because, you know, these, these people are part of our community. And so, we want to continue to make decisions that are the best for them. And so, I think usually, like most things, the sweet spot is somewhere in the middle, right? And so, we look at ways that we can curb costs as best we can and try to, you know, minimize negative externalities that would stifle innovation, and limit a few to opportunities for growth. And by growth, I mean growth of a healthy patient population. So, one way we can do that is by improving our technologies, using artificial intelligence for the right drug for the right patient at the right time at the right line of therapy, making sure we're sequencing these patients, making sure we have data warehouses to follow them prospectively, so that we can integrate them in research studies or find the right therapeutic for them based on their particular genomic signature. And so, I think that's where we can show real cost savings. And I think that's kind of the direction that I would like to see community oncology going forward, is focusing on finding what is the driver for this patient's malignancy? Okay, let's get away from just blindly giving cytotoxic drugs to a large, mixed heterogeneous population of people; let's dive down into the niche of their individual malignancy, find the right drug for them. And then, you know, even if that drug may have a higher cost and a lower cost alternative, when you actually look at the grocery economics, if their survival doubles or triples, or the side effects are much less and not managed in an acute care setting, in the long run, that's going to be a winner. And so, I think for community oncology, we need to really invest in, continue to support innovation and development of new therapeutics, but also making sure we have the systems and infrastructure in place so that we can follow these patients. And maybe some of that's telehealth, maybe some of its wearables to provide actionable data, you know, patient reported outcomes, all those things. We can follow those patients closely over time, mitigate any toxicities, but also identify the right patient with the right disease, for the right therapy, and have a meaningful intervention. And I think that's where the real value proposition for community oncology will shine going forward.