Leading oncology group wary of Trump drug price proposals

A leading U.S. group of cancer doctors is wary of new Trump administration proposals for lowering drug prices, particularly if new negotiation tools are introduced that will mean the U.S. government no longer routinely pays for all cancer drugs in the Medicare health program for older people.

The rising cost of cancer care will be in focus during an annual meeting of the American Society of Clinical Oncology (ASCO) that begins Friday in Chicago. In recent years, potent new immunotherapies and treatments that target genetic mutations underlying cancer have successfully curbed the disease in some patients.

But they have come with ever-rising price tags, spurring new questions about how much individuals, corporations and the government in the United States, already the world’s most expensive health system, will pay for these breakthroughs.

President Donald Trump last month unveiled a “blueprint” to reduce drug prices by promoting the entry of cheaper rivals to existing drugs and giving private insurers more scope to negotiate prices.

In private health insurance plans, insurers have tools to negotiate prices on the drugs they cover for their members. In exchange for manufacturer discounts, insurers may lower the patient co-payment below competing treatments, or drop coverage of a rival drug altogether, to increase prescriptions.

The Trump proposal includes the possibility that the government would stop covering all approved drugs for certain illnesses, including cancer, in the Medicare program. It has requested feedback from the industry on this and other ideas.

“It is a balancing act, because we do think that there should be an ability to negotiate price, but we are always driven by our belief that patients should not be denied the most effective drugs for their condition,” ASCO’s chief executive officer, Dr. Clifford Hudis, told Reuters.

Another idea is to change Medicare’s reimbursement of doctors including a fee calculated as a percentage of a drug’s price. Critics say the payments encourages physicians to use the most expensive drugs. Hudis said ASCO is not opposed to changing the formula, but argues that oncology practices will still need to be reimbursed for handling specialized cancer medicines delivered by infusion or injection.

ASCO, the nation’s leading association of cancer physicians, said it will publicize its full response after submitting feedback to the Trump administration by a July 16 deadline.

EFFECTIVENESS VS PRICE

U.S. spending on cancer drugs reached almost $50 billion last year - nearly doubling since 2012 - and is projected to double again to $100 billion in five years, according to IQVIA, which collects drug sales data.

Expensive new cancer treatments like Merck & Co’s $162,000-per-year immunotherapy Keytruda and Gilead Sciences Inc’s $373,000 blood cancer therapy Yescarta, which have helped some patients survive previously untreatable disease, are contributing to the increase.

But so are less effective drugs without competitors whose prices are raised by manufacturers each year. Oncologists and other specialists benefit from price increases on drugs that are administered in their offices.

Without percentage-based fees, oncology practices would lose “their ability to make considerable sums off their relationship with the pharmaceutical industry,” said Dr. Peter Bach, director of Memorial Sloan Kettering’s Center for Health Policy Outcomes in New York. ASCO and other institutions have proposed their own methods for reducing healthcare costs, but stopped short of urging drugmakers to lower prices. ASCO has recommended ranking drugs on their comparative clinical value, including relative efficacy and side effects, but not price. The group has also suggested that the price of a cancer drug could vary depending on how effective it is for a specific indication, or how well an individual patient fares after the treatment.

The association does not support moving to a flat fee for treating cancer patients, including drugs, an approach that is being used in other specialties. That “could force providers to make suboptimal or lower-value choices,” the organization said. At ASCO’s annual meeting, which runs from June 1-5, cancer researchers will provide new data on survival rates with Keytruda, on the emerging class of CAR-T cell treatments for blood cancers and on genetically targeted therapies.

Some research will address the cost question, including a comparison of treatment costs and outcomes for colon cancer patients in the United States and Canada.

Reporting by Deena Beasley; Editing by Michele Gershberg, Leslie Adler and Bernadette Baum