Payment for Oncolytics in the United States: A History of Buy and Bill and Proposals for Reform

Abstract

The authors review and discuss the opportunities and challenges raised by policy options for Average Sales Price reform or replacement.

The Importance of Economic Trade-offs in Cancer Drug Pricing

“…Using the list price of cancer drugs invariably makes newer drugs appear less valuable, even though health insurers frequently pay prices well below the list price of oncology drugs. 7 This scenario would be analogous to using the Manufacturer Suggested Retail Price in assessing the value of a consumer good, as opposed to the price that most consumers, in this case health plans, pay. This is not to say that using actual transaction prices would make new cancer drugs cost-effectivedthey may still not bedbut proper accounting is the exception, not the norm.…”

A Pathway Through the Bundle Jungle

“…Oncology practices have no control over the prices paid for novel and existing oral drugs covered under the pharmacy benefits of patients with cancer because these prices are negotiated by payers or on the behalf of their payers by pharmacy benefit managers. 6 Oncology practices do have some control over how many lines of therapy they use, which regimens they choose, and offlabel use. Consequently, we believe the use aspect of drug spending should be considered a technical risk.…”

“…Second, practices generate substantial revenue from drugs covered under the insured patient's medical benefits because of the buy and bill system. 6 If oncologists are at financial risk for the drugs they choose to use to treat patients with cancer, then they will be more likely to choose the least costly regimens when efficacies are similar; this will mitigate spending growth and promote the use of generic and biosimilar drugs when available. Third, because oncologists will become more price sensitive under these payment policies, they will seek out better prices for the drugs they use to treat patients through negotiations with manufacturers and other parties in the drug distribution chain.…”

Oncology Payment Reform and Drug Reimbursement in the Proper Perspective

“…2 Our call for a replacement to average sales price (ASP) -based reimbursement for outpatient chemotherapy administration comes on the heels of ASCO's Consolidated Payments for Oncology Care proposal 3 and the COA's oncology medical home-based payment reform proposal. First, let us be clear, our JOP article was written as an invitation to American Society of Clinical Oncology (ASCO), Community Oncology Alliance (COA), and other interested parties to consider viable replacement options to buy-and-bill as part of an overall outpatient oncology payment reform strategy.…”