The Rising Use of Oncology Value Tools by Payers

Attributing value in the rapidly expanding oncology space is a new challenge to payers looking to introduce a range of novel therapies where older drugs have long dominated. Rising costs across all levels of cancer treatment are met with pressure from payers, physicians, and patients to manage the end costs, increasing the impact of value in decision-making. In this article we look at value tools now available that are increasingly being utilized by payers in oncology.

Many stakeholders in the health care space view the rising cost of oncology therapies as a growing concern. From 2004 to 2014, cancer spending due to medications grew from 15% to 18% in Medicare patients and 15% to 20% in commercial patients.1 Monthly cancer treatment costs now regularly exceed $10,000, and these rising costs are impacting patients as well, as coinsurance plans put higher cost burdens on them.2 At the same time, payers are beginning to push back on high cancer costs and increasingly stepping in to manage a category that was once not managed at all. That management has coincided with a call by payers and providers for oncology products to demonstrate “value.”3-5

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But how is value in oncology defined? In cancer care, value is a particularly complex and controversial topic. The increasing need for more accurate assessments of value has been met by the arrival of oncology value tools, including the DrugAbacus, the American Society of Clinical Oncology (ASCO) Value Framework, and the National Comprehensive Cancer Network (NCCN®) Evidence Blocks™.

UTILIZATION OF VALUE TOOLS BY PAYERS

We conducted a survey of current payers using our proprietary Pivot™ market surveys tool to understand how familiar payers were with oncology value tools and whether the tools were used in formulary and policy development. Twenty-seven respondents from 24 unique payer organizations representing over 200 million pharmacy and 60 million medical lives answered.

Nearly 60% of Pivot payer panelists said they were at least somewhat familiar with the oncology value tools and 15% reported being very or completely familiar. A total of 27% of respondents said they use at least one of the oncology value tools currently in their formulary or coverage policy decision-making process, and another 41% said they plan to use them in the future. Among current users, the most popular tools were the NCCN Evidence Blocks, followed by the DrugAbacus.

Payers saw a variety of uses for value tools, such as picking preferred oncology products and informing pathway development (Figure 1). Nearly half of current users reported that the value tool output influenced them to create stricter access to a product, while 29% had made coverage access for at least one product less strict. 

Payers are also engaging drug manufacturers on value tool outputs. A total of 11% said they had initiated a conversation with the drug manufacturer on a value tool output, and 33% said they plan to do so in the future.

INTERPRETATION

Our data demonstrate that payers are increasingly willing to manage oncology drugs and bring value into the discussion. If the value tools are consistently updated and maintained by the developers, payers will have an ongoing, relevant resource backed by expert organizations with which to push back on manufacturers in the areas of cost and pricing. 

In terms of application, payers have a number of routes to leverage value tool outputs. Value tools compare products directly, making payer choices of preferred therapies simpler. Medical policy or prior authorization access can also be altered to make “low value” therapies more difficult to obtain. Indeed, our survey data found that payers have already been using value tools for both choosing preferred products and altering coverage criteria. Sophisticated payers may eventually use value tool outputs in pathway programs to educate providers on high-value therapies and encourage use through eased controls or enhanced reimbursement.

We expect value tools will impact oncologists and health systems as well. The value tools discussed here have all been created by physician-led organizations, rather than by payers. Providers faced with capitated agreements—or even just financially distressed patients—may increasingly consult value tools to bring the best health care to patients at the lowest cost. For manufacturers, this concept would extend the discussion on product value from the payer headquarters to the provider office.

Value in oncology is an evolving concept, and one that is likely to gain momentum. The rising cost of cancer care and the aging of the population have made the management of oncology inevitable. Payers are aware of these oncology value tools and are increasingly using them in their oncology management processes. The opportunities in the world of value in oncology will go to those parties who understand it best and are able to leverage value to their advantage.

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References

1.    Milliman. Cost Drivers of Cancer Care: A Retrospective Analysis of Medicare and Commercially Insured Population Claim Data 2004-2014. April 2016.

2.    Dusetzina SB, Keating NL. Mind the gap: why closing the doughnut hole is insufficient for increasing Medicare beneficiary access to oral chemotherapy. J Clin Oncol. 2016;34(4):375-380.

3.    Loftus P. New push ties cost of drugs to how well they work. The Wall Street Journal. http://www.wsj.com/articles/new-push-ties-cost-of-drugs-to-how-well-they-work-1432684755. Published May 26, 2015. Accessed July 13, 2016.

4.    Langreth R, Koons C. This cancer doctor is leading the attack on astronomical drug prices. Bloomberg. http://www.bloomberg.com/news/articles/2015-06-01/this-cancer-doctor-is-leading-the-attack-on-astronomical-drug-prices. Published June 1, 2015. Accessed July 13, 2016.

5.    Bach P. Cancer: unpronounceable names, incomprehensible prices. Forbes. http://www.forbes.com/sites/matthewherper/2014/08/13/cancer-unpronounceable-drugs-incomprehensible-prices/#adbf5aa3f365. Published August 13, 2014. Accessed July 13, 2016.