Shift in Site of Cancer Care Brings Potential for Reduced Adherence

Global oncology trend report finds that increased use of hospital outpatient facilities shifts cost burden to patients.

Significant growth in the use of hospital outpatient facility settings for the administration of oncology drugs may bring the unintended consequence of reduced adherence due to higher patient contributions, according to a recent report by the IMS Institute for Healthcare Informatics.

The global oncology trend report, released in May 2014, reviews current developments in the oncology market, recent treatment innovations, and the value of treating cancer. Among the key findings in the report is an assessment of the current shift in cancer care and the subsequent impact on medication adherence.

More than 40% of oncologists have moved to practices with 7 or more physicians, as smaller practices are increasingly being aggregated or acquired by hospital systems. This trend is attributed by oncologists to financial concerns and a desire to reduce risk.

“Physician practices are becoming larger and more cancer care is provided by Accountable Care Organizations and hospitals who enjoy increasingly favorable pricing under the ACA,” the report authors write. “Thus, some of the increases in cancer costs attributed to drug makers may actually be driven by the shift in setting of care.”

The trend report cites adjuvant hormonal therapy for the treatment of breast cancer as an example of an inverse relationship between out-of-pocket costs for patients and drug persistence. A copay of more than $30 brings the potential for measurably reduced drug compliance, according to IMS, with the effect becoming more pronounced as copays rise even further.

Due to the direct impact of adherence on outcomes and the cost of care, reduced compliance remains a key consideration for payers and physicians. For example, the report finds that persistence levels in adjuvant hormonal therapy for breast cancer declined to a greater extent during a 5-year time span among patients with a higher cost share.

“Taking these findings into consideration, sites of care that increase patient contribution and cost sharing may actually lead to a significant increase in the total cost of care,” the authors write. “Stakeholders are questioning the sustainability of rapid growth among hospital outpatient facility settings for oncology drug administration.”

The report finds hospitals receive higher reimbursement rates to administer oncology drugs compared to physician offices due to greater cost and overhead. For therapies that are typically infused by an oncologist, reimbursed costs for hospitals are at least double those for physician offices.

As a result, patient out-of-pocket costs are driven higher (dependent on a patient’s insurance and benefit design), which subsequently triggers the potential for a reduction in adherence and a higher total cost of care.

Overall, the global market for oncology drugs rose from $71 billion in 2008 to $91 billion in 2013, with the United States accounting for $37.2 billion of that total. The increase has a modest compound annual growth rate of 5.4%, which reflects the lack of breakthrough therapies for large patient populations, the expiration of patents, a drop in the use of supportive care medicines, and stronger payer management, according to the report. Targeted therapies, which had only an 11% share of the market a decade ago, now account for 46% of total global oncology sales.

The average cost per month for a branded oncology drug treatment has doubled over the last 10 years to approximately $10,000. Assessing the incremental value of these treatments for individual patients is difficult due to a high level of variability in patient response, alterations to patient care protocol, and other issues related to equity and patient care, according to IMS.

There are more than 6000 active products in the oncology drug pipeline to date, but fewer cancer drugs are progressing to phase II and III clinical trials, the report states. This illustrates high levels of early phase activity and a lack of successful clinical results, according to IMS.

Many new drugs that have been approved target small patient populations and face strong competition, which lowers the level of sales and returns to manufacturers.

“Investment in near-term future innovation has shifted toward biologics, mostly concentrated in targeted treatments, though preclinical products are mostly small molecule,” the authors write. “While much of the pipeline is focused on lung and breast cancer, tumor types with lower prevalence such as ovarian, leukemia, stomach, and liver cancers are also being actively pursued.”