How Pharmacies Can Improve Reimbursement for Oncology Drugs

Pharmacists can play a role in the drug reimbursement process for oncology products, which are among the most expensive of all pharmaceuticals. Pharmacy leaders who spoke with OncologyLive® said they can assist with revenue cycle management process, working with the billing and finance teams if any payment is denied and ensuring therapies have prior authorization from private payers.

Reimbursement for drugs has historically been determined with the average wholesale price, which was set by manufacturers. But the average annual cost of new cancer drugs continues to trend upward, although the median cost dropped by $13,000 in 2018 to $149,000, and the cost per product ranged between $90,000 and over $300,000 (Figure).¹ As the net cost of cancer drugs is anticipated to continue to increase, policy has been set such that costs are determined using the average selling price (ASP), which is calculated by dividing the manufacturer’s total revenue for a particular drug by the number of units sold (excluding particular sales, including those to the government).

For Medicare Part B drugs, the Centers for Medicare & Medicaid Services reimburses based on the ASP + 6% (4.3% due to sequestration),2and there is also a difference if an infusion center is a hospital-based outpatient department. In this case, the Outpatient Prospective Payment System bundles drugs that cost less than a predetermined threshold. Private insurance generally reimburses a negotiated percentage of the charges.

“Information such as site of care and the payer mix play a particularly significant role [in determining reimbursement],” explained Scott A. Soefje, PharmD, MBA, director of Pharmacy Cancer Care Services at the Mayo Clinic in Rochester, Minnesota.

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