Medicare Coverage of Oral Oncolytics

Peter Salgo, MD: That’s a lot of money. So are the oral agents so much better that it’s worth bankrupting the patients to give them, which is the billion-trillion-dollar question, right? What do you think?

Cheryl Allen, BPharm, MBA: I think where we can

Peter Salgo, MD: It’s an unfair question, by the way.

Cheryl Allen, BPharm, MBA: Serve the patient best and get the patient in a more of a maintenance mode with or without drug therapy, that’s really the goal. And where we can use the science and targeted therapies to get there, that really is where we’re trying to go with these newer targeted therapies.

Peter Salgo, MD: Let’s also sort of parse a little bit more out. When you’re discussing the relative cost of the IV [intravenous] agents and the PO oral agents, are you also factoring in the cost of the doctor’s visit, the tubing, the equipment necessary for the IVs? Is that added to the cost of the IVs or are we simply comparing the cost of the agents?

Noa Biran, MD: No. It’s still far more.

Cheryl Allen, BPharm, MBA: There are a few of the infused agents that are generic now. Although the recent branded agents, even in infused space, are costly for the patient.

Noa Biran, MD: Right. But the patients don’t see that cost. That part of it is covered by their insurance.

Cheryl Allen, BPharm, MBA: The medical benefit side.

Noa Biran, MD: And they do not see the cost of one of the newer infusions, daratumumab, extremely costly. I don’t know what the cost is, you probably know better than me. But probably comparable to some of the oral drugs, but the patients don’t see the bill.

Peter Salgo, MD: Which brings us to the part of this discussion where my eyes turn into helicopters. We’re going to discuss Medicare in a minute, because we’ve got Medicare Part D, which is the oral agents, they’re typically on Part D, right? And then we’ve got IV agents covered under medical benefits, Medicare Part B, which is I think what you were alluding to. For simplicity’s sake, and please educate me, people do this, once a broadcast, and I quickly just space out. Part D, Part B, what’s the difference? Why is there this difference?

Cheryl Allen, BPharm, MBA: So the difference really is all of the medical coverage is going to be under Part B, as in “boy.” So everything that is done in the physician’s office, the drugs that are administered to the patient in the prescriber office are typically covered under Part B, as in “boy.” Anything generally that patients self-administers is Part D. So all of the newer, the oral therapies that are coming to market, they’re covered under Part D for the most part.

Peter Salgo, MD: Why? I mean why is there this; I know this may be an unanswerable enigma, a koan from out of Zen Buddhism, why does this exist? These are both groups of drugs for the treatment of a nasty disease, why do we parse this differently?

Cheryl Allen, BPharm, MBA: Well that’s interesting that you ask. Some payers choose to recognize payment for the Part B, infused oncolytics, over on the Part D side, and that’s for billing purposes.

Peter Salgo, MD: I told you this gets confusing. What does that mean? To me that’s word salad— explain that.

Cheryl Allen, BPharm, MBA: Yes. It’s payers who, to be active and aggressive in monitoring their spin in oncology, like you said, they want to recognize appropriate utilization of the drug across both benefits— pharmacy and medical benefit. So they’ll look at the drug product, the appropriate indication for use, whether it is patient self-administered or administered in the prescriber office.

Peter Salgo, MD: I’m getting this. There are some really good payers out there is what you’re saying.

Cheryl Allen, BPharm, MBA: There are some payers who are looking at the spend. And spend in oncology, particularly in the specialty space, is really approaching half the spend of the payer community.

Peter Salgo, MD: Again, if I hear you correctly.

Cheryl Allen, BPharm, MBA: On drug product.

Peter Salgo, MD: They’re looking at not whether the patient takes it him or herself, or whether it’s administered at a doctor’s office, but what are we using it for? What’s the expected effect, and then categorizing it that way?

Cheryl Allen, BPharm, MBA: Right. And multiple myeloma makes a lot of sense to look at from a holistic approach like that, because you do have the orals and the infused.

Peter Salgo, MD: So if we go to the IV agents, typically they’re covered, and your out-of-pocket cost, unless you’ve got one of these really good payers, is going to be minimal. The oral agents not covered so much and there’s a lot of out-of-pocket cost. Is that the difference? And does that affect what doctors do in terms of how they prescribe these drugs?

Cheryl Allen, BPharm, MBA: Let me go back and make sure we’re clear. Although the payer is looking across the benefits to look at the spend in oncology, the patient, out-of-pocket, is more so on the Part D side, or the self-administered side, although the payers recognizing their cross, monitoring the spend across, looking at appropriate utilization across, the patient still has less of an out-of-pocket spend if it’s a product that is used in the prescribed office.

Peter Salgo, MD: So Part B is still less out of pocket compared to Part D. I’m getting this.

Cheryl Allen, BPharm, MBA: For the most part.