New Drug Launches Spending Increase on Oncology
Last year, cancer spending came in at $107 billion worldwide, partly due to the record number of drugs that debuted on the market. This number is expected to increase dramatically to almost $150 billion by 2020. The IMS Institute for Healthcare Informatics (IMS) reported recently it is projecting a 7.5–10.5% increase in spending each year until 2020. However, this influx of drugs raises issues for payers coping with rising treatment costs, for patients who now have many options to assess, and regulators who must accurately evaluate these new therapies in a timely manner.
In 2015, the oncology market grew 11.5% worldwide, while the US market alone grew 13.9%. Of note, IMS reports at least 20 different types of tumors are currently being treated with 1 or more of 70 oncology drugs that have been introduced in the past 5 years, and that the US represents 45% of worldwide cancer drug spending. IMS expects wider adoption of new drugs and a prolonged increase in drug innovation will continue to drive this trend for a few more years. This trend will, in turn, drive payers to experiment with new payment models such as performance-based pricing.
As Some Insurers Exit Marketplaces, Others Remain Committed
While some insurers have adjusted plans and pricing in an attempt to mitigate the effects of financial loss, other insurers are leaving state marketplace exchanges altogether, citing their doubts about the stability of the marketplace and their ability to profit from marketplace plans. Through first-quarter 2016, some companies have endured year-over-year losses as high as 46%. However, the Commonwealth Fund recently reported that despite these departures, other insurers still see potential in these plans, and will continue to offer products on the marketplace.
Anthem, Aetna, and other insurers saw larger enrollment numbers than they had projected for the year and a healthier patient population, and thus decided to remain part of the state exchanges. However, last week, UnitedHealthcare announced its withdrawal from all but a handful of the state exchanges in which it is currently participating; this includes the California marketplace, blaming ACA-induced losses. In the future, insurers likely will ask for risk adjustment program changes, more plan flexibility, and more restrictive special enrollment periods to help combat the losses they have experienced.
Pharma and Payers Seek New Weapons in Fight Against Opioid Addiction
The prescription painkiller overdose epidemic has generated a call to action by the industry with insurers and pharmaceutical companies announcing initiatives in the wake of recent reports on painkiller addiction prevalence. An estimated 1.9 million people in the US are addicted to prescription painkillers. Nearly 500,000 people died from a drug overdose in the US from 2010–2014, with more dying from overdose in 2014 than in any previously recorded year, according to the Centers for Disease Control and Prevention (CDC). Of those overdose deaths, 60% involved narcotics, and 50% of all opioid overdose deaths involved prescription opioids. Some are suggesting increased access to “abuse deterrent opioids (ADOs)” may help, and are calling on insurers to consider covering the more expensive ADOs rather than defaulting to the less expensive traditional versions of the drugs. Those who support ADO access argue that opioid abuse costs a payer more in the long run than paying for ADOs up front.
Another strategy focuses on the use of Probuphine, a new implant that releases the drug buprenorphine over a 6-month period to decrease cravings and prevent withdrawal symptoms. The implant was invented by Titan Pharmaceuticals in San Francisco, and is being marketed in the US and Canada by New Jersey-based Braeburn Pharmaceuticals. Braeburn is offering a refund guarantee to insurers who cover the implant if it does not save them money. In addition, Anthem Inc. recently launched its own Pharmacy Home program to help prevent and address opioid addiction among its members. Anthem’s program focuses on the practice of “pill shopping” by instituting a one-pharmacy policy. The program will notify patients and providers in writing if the patient qualifies, and the provider will receive a 3-month prescription history and educational materials regarding the benefits of a 1-pharmacy policy. If the patient does not change his or her behavior within 60 days of the notification, then they will be enrolled in the program and asked to choose 1 pharmacy for all of their prescriptions for 1 year.
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