Reimbursement Influences Choice of Cancer Therapy of the policy within 2 years of its implementation.
ASCO Surveyed GAO researchers received 680 completed surveys, representing treatment information on 2,018 patients, from members of the American Society of Clinical Oncology. The survey, conducted between May and June 1990, found that in addition to "widespread" off-label use: • About 56% of cancer patients receive at least one off-label drug. • More than half of respondents reported off-label reimbursement problems, with most indicating that the problem is getting worse.
Use Examined The 59-page report, commissioned by Senate Labor and Human Resources Committee Chairman Edward Kennedy (D-Mass.), examined the prevalence of off-label use of oncology drugs, how use varies by cancer type and patient characteristics, and the extent of insurer denials of off-label drug claims. It recommends that Louis Sullivan, M.D., U.S. Secretary of Health and Human Services, issue as soon as possible a comprehensive policy to "help clarify the conditions under which offlabel drug use might be considered reasonable and necessary,"—most likely in the form of a drug compendium. GAO also recommends an assessment
1606
Dr. John Cova
Policy Variation • There was significant variation in reimbursement policies and problems associated with reimbursement in 11 states examined. • Between 8% and 10% of survey respondents reported altering or choosing treatments based on reimbursement policies; an additional 15% to 28% reported that they switched treatments due to high treatment cost. • Treatment of lung and colon cancer, two of the most prevalent cancers, were among those most influenced by reimbursement policies. • Approximately 62% of the respondents reported admitting patients to hospitals solely to circumvent reimbursement policies that restrict off-label drug use. • About 68% of patients receiving palliative therapy received at least one off-label drug compared to 41% of patients receiving curative care. In addition, GAO reported that of 46 approved anti-cancer drugs and hormonal agents prescribed by oncologists, 44 were prescribed at least once in an off-label application. The lung cancer drug cisplatin represented slightly more than 21% of the total off-label use cited, while Prednisone, used primarily to treat breast cancer and multiple
Journal of the National Cancer Institute
Downloaded from http://jnci.oxfordjournals.org/ at University of Sussex on August 15, 2015
Confusing and chaotic third-party reimbursement policies—rather than physicians and patients—appear to be the most important factor in determining which treatment cancer patients receive. According to a recently released General Accounting Office report, expensive drugs and biological treatments that have been approved for distribution and sale but not "officially" sanctioned for the treatment of certain cancers by the Food and Drug Administration, yet demonstrate at least some efficacy as anti-tumor agents, are often denied reimbursement. More than one-third of all drugs prescribed for use by cancer patients are "off-label," and the percentage is even higher in cancer cases where there is no consensus on the best available therapy, according to the GAO report.
• Approximately two-thirds of oncologists surveyed cited "moderate" to "very great" difficulty in staying abreast of constantly changing third-party reimbursement policies. • About 60% reported a "moderate" to "very great" increase in the time it took to receive reimbursement from insurers during the preceding 12 months. • About 50% reported insurance denial for off-label reimbursement during the preceding 12 months with an additional 19% reporting reimbursement denials without explanation.
News News
Improper Staging "If insurers capriciously pay for every off-label use, those increases are passed on in terms of higher premiums, and then employers end up getting priced out of the health insurance market," Cova explained. At the same time, Cova blames insurance claim denials on improper staging by pathologists and physicians that can lead to erroneous off-label treatments. He also said physicians have an ethical responsibility to provide the most effective treatment regardless of reimbursement policies. "There is very little quality control," Cova said. "If physicians honestly believe that such care will save or prolong a patient's life, they shouldn't be concerned about whether they are going to be reimbursed," Cova said. "Why are these issues always the onus of the payer? We're always ready to criticize payers and question their motives but we don't question the motives of a provider," he added. Physicians in the oncology community, however, bristle at this industry opinion.
Vol. 83, No. 22, November 20, 1991
"That doesn't make a whole lot of sense in the real world. If a thirdparty carrier is unwilling to pay for the treatment, the patient and family have a real liability, and the physician has to consider that," said Martin Abeloff, M.D., ASCO president and clinical director of the Johns Hopkins University Oncology Center, Baltimore. "This report clearly describes the magnitude of the problem and describes the need for improved reimbursement polices that have to be responsive to the needs of patients—
especially those with cancer who have a limited array of treatment options available," Abeloff said.
FDA a "Dinosaur" Eugene Schonfeld, Ph.D, president of the National Kidney Cancer Association, a patient advocacy group, said the problem lies with an inconsistent federal policy. "There are lots of things the FDA could do but they are just not doing, at least partially, because they don't have the staff or the funding. The FDA is
Downloaded from http://jnci.oxfordjournals.org/ at University of Sussex on August 15, 2015
myeloma, represented slightly more than 17%. The health insurance industry attributes lags and denials in reimbursement to increasing numbers of claims, the complexity of claims, and closer scrutiny of claims demanded by employers to drive down costs. It is physicians —not insurance reimbursement policies—who must bear ultimate responsibility for treatment decisions. "It's employers who are questioning the appropriateness and medical necessity of treatments," said John Cova, Ph.D., director of medical technology assessment for the Health Insurance Association of America, an industry trade group.
Stat Bite
Trends in Breast Cancer Surgery Between 1983 and 1987, treatment for breast cancer began slowly shifting toward more limited surgical procedures. In June 1990, the National Institutes of Health Consensus Development Conference stated that breast conserving surgery is appropriate and often preferable for most women with stage I and C breast cancer. With this consensus, the trend is expected to continue.
1983
1984
1985 1986 Year of Diagnosis • Stage! •StageQA
1987
•Ma
i
n
NEWS
1607
News News
— By Lou Fintor
Biotech Industry Flourishes With Cancer Research Advances The cash infusions provided to the National Cancer Program by the 1971 National Cancer Act fueled scientific discoveries that have dramatically advanced understanding of the cancer process. With a vision of how these discoveries could affect cancer diagnosis and treatment, a whole new industry was born, designed to take basic research and make it useful to cancer patients. Taking their lead from developments in science, U.S. commercial biotechnology firms have brought to market monoclonal antibodies, colonystimulating factors, and other biologicals. According to industry observers, the future never looked so good. "In the early 1980s, the certainty wasn't there that it was for real. It was a rollercoaster ride," said Ashley Stevens, Ph.D., director of the Office of Technology Transfer at the DanaFarber Cancer Institute, Boston. "Now, there is no doubt in people's minds that biotech will produce blockbuster drugs."
Stock Sales
Beverly Zakarian
1608
This confidence has been reflected in the stock market. "More [money] was raised in the last year than has ever been seen before," he added. "Even small companies with preclinical drugs can get money." During 1991, biotech companies sold $17.7 billion in stocks, the highest 5-month total in history. Today, 750 biotechnology firms have about 100 drugs in various stages of development; more than half of those drugs target cancer or cancer-related conditions. Many products that have
been in research for years are now becoming commercial. Industry revenues for 1990 were estimated at $2 billion, according to the U.S. Office of Technology Assessment. Sales are expected to reach $15 billion by the year 2000, according to Mark D. Dibner, Ph.D., of the North Carolina Biotechnology Center.
Science and Policy The industry got started by people moving from academia to the commercial sector, or working in both, according to Stevens. The first biotech firm, Genentech, South San Francisco, was founded in 1976 by venture capitalist Robert Swanson with Herbert Boyer, Ph.D. Boyer, while at the University of California, San Francisco, created the first recombinant DNA with Stanley Cohen, M.D., of Stanford University. But just as important as the scientific discoveries were the federal policies that were put in place in the early 1980s to make the investments financially worthwhile, such as capital gains incentives and patent protections, Stevens said. For example, the capital gains tax cut of 1978 caused an enormous influx of funds to venture capital, Stevens said. In addition, the Bayh-Dole Act of 1980 gave universities the means and the incentives to aggressively market their technology, and in 1981 the Chakrabarty patent decision established the patentability of genetically altered living organisms In 1982, the establishment of the U.S. District Court of Appeals for the federal circuit swung the balance from
Journal of the National Cancer Institute
Downloaded from http://jnci.oxfordjournals.org/ at University of Sussex on August 15, 2015
like a dinosaur; it needs to be restructured by bringing in new managers and new leaders," Schonfeld said. "We have all these innovations pouring out of the labs and they have to pass through the eye of the regulatory needle — the FDA — and the needle is getting smaller all the time so that drugs and innovations cannot be adequately evaluated," Schonfeld said. The Cancer Patients Action Alliance (CAN ACT), a group that has targeted off-label reimbursement as a central advocacy issue, hopes the report will stimulate creation of a standardized federal policy regarding offlabel reimbursement. Only two states, New York and Michigan, mandate offlabel reimbursements, although Texas is considering similar legislation. "Generally, [the GAO Report] is an important document. But to be fair, the FDA never said that it doesn't support off-label use, but its actions have caused the problems and we really have to take a long hard look at that," said CAN ACT President Beverly Zakarian.
ASCO Surveyed GAO researchers received 680 completed surveys, representing treatment information on 2,018 patients, from members of the American Society of Clinical Oncology. The survey, conducted between May and June 1990, found that in addition to "widespread" off-label use: • About 56% of cancer patients receive at least one off-label drug. • More than half of respondents reported off-label reimbursement problems, with most indicating that the problem is getting worse.
Use Examined The 59-page report, commissioned by Senate Labor and Human Resources Committee Chairman Edward Kennedy (D-Mass.), examined the prevalence of off-label use of oncology drugs, how use varies by cancer type and patient characteristics, and the extent of insurer denials of off-label drug claims. It recommends that Louis Sullivan, M.D., U.S. Secretary of Health and Human Services, issue as soon as possible a comprehensive policy to "help clarify the conditions under which offlabel drug use might be considered reasonable and necessary,"—most likely in the form of a drug compendium. GAO also recommends an assessment
1606
Dr. John Cova
Policy Variation • There was significant variation in reimbursement policies and problems associated with reimbursement in 11 states examined. • Between 8% and 10% of survey respondents reported altering or choosing treatments based on reimbursement policies; an additional 15% to 28% reported that they switched treatments due to high treatment cost. • Treatment of lung and colon cancer, two of the most prevalent cancers, were among those most influenced by reimbursement policies. • Approximately 62% of the respondents reported admitting patients to hospitals solely to circumvent reimbursement policies that restrict off-label drug use. • About 68% of patients receiving palliative therapy received at least one off-label drug compared to 41% of patients receiving curative care. In addition, GAO reported that of 46 approved anti-cancer drugs and hormonal agents prescribed by oncologists, 44 were prescribed at least once in an off-label application. The lung cancer drug cisplatin represented slightly more than 21% of the total off-label use cited, while Prednisone, used primarily to treat breast cancer and multiple
Journal of the National Cancer Institute
Downloaded from http://jnci.oxfordjournals.org/ at University of Sussex on August 15, 2015
Confusing and chaotic third-party reimbursement policies—rather than physicians and patients—appear to be the most important factor in determining which treatment cancer patients receive. According to a recently released General Accounting Office report, expensive drugs and biological treatments that have been approved for distribution and sale but not "officially" sanctioned for the treatment of certain cancers by the Food and Drug Administration, yet demonstrate at least some efficacy as anti-tumor agents, are often denied reimbursement. More than one-third of all drugs prescribed for use by cancer patients are "off-label," and the percentage is even higher in cancer cases where there is no consensus on the best available therapy, according to the GAO report.
• Approximately two-thirds of oncologists surveyed cited "moderate" to "very great" difficulty in staying abreast of constantly changing third-party reimbursement policies. • About 60% reported a "moderate" to "very great" increase in the time it took to receive reimbursement from insurers during the preceding 12 months. • About 50% reported insurance denial for off-label reimbursement during the preceding 12 months with an additional 19% reporting reimbursement denials without explanation.
News News
Improper Staging "If insurers capriciously pay for every off-label use, those increases are passed on in terms of higher premiums, and then employers end up getting priced out of the health insurance market," Cova explained. At the same time, Cova blames insurance claim denials on improper staging by pathologists and physicians that can lead to erroneous off-label treatments. He also said physicians have an ethical responsibility to provide the most effective treatment regardless of reimbursement policies. "There is very little quality control," Cova said. "If physicians honestly believe that such care will save or prolong a patient's life, they shouldn't be concerned about whether they are going to be reimbursed," Cova said. "Why are these issues always the onus of the payer? We're always ready to criticize payers and question their motives but we don't question the motives of a provider," he added. Physicians in the oncology community, however, bristle at this industry opinion.
Vol. 83, No. 22, November 20, 1991
"That doesn't make a whole lot of sense in the real world. If a thirdparty carrier is unwilling to pay for the treatment, the patient and family have a real liability, and the physician has to consider that," said Martin Abeloff, M.D., ASCO president and clinical director of the Johns Hopkins University Oncology Center, Baltimore. "This report clearly describes the magnitude of the problem and describes the need for improved reimbursement polices that have to be responsive to the needs of patients—
especially those with cancer who have a limited array of treatment options available," Abeloff said.
FDA a "Dinosaur" Eugene Schonfeld, Ph.D, president of the National Kidney Cancer Association, a patient advocacy group, said the problem lies with an inconsistent federal policy. "There are lots of things the FDA could do but they are just not doing, at least partially, because they don't have the staff or the funding. The FDA is
Downloaded from http://jnci.oxfordjournals.org/ at University of Sussex on August 15, 2015
myeloma, represented slightly more than 17%. The health insurance industry attributes lags and denials in reimbursement to increasing numbers of claims, the complexity of claims, and closer scrutiny of claims demanded by employers to drive down costs. It is physicians —not insurance reimbursement policies—who must bear ultimate responsibility for treatment decisions. "It's employers who are questioning the appropriateness and medical necessity of treatments," said John Cova, Ph.D., director of medical technology assessment for the Health Insurance Association of America, an industry trade group.
Stat Bite
Trends in Breast Cancer Surgery Between 1983 and 1987, treatment for breast cancer began slowly shifting toward more limited surgical procedures. In June 1990, the National Institutes of Health Consensus Development Conference stated that breast conserving surgery is appropriate and often preferable for most women with stage I and C breast cancer. With this consensus, the trend is expected to continue.
1983
1984
1985 1986 Year of Diagnosis • Stage! •StageQA
1987
•Ma
i
n
NEWS
1607
News News
— By Lou Fintor
Biotech Industry Flourishes With Cancer Research Advances The cash infusions provided to the National Cancer Program by the 1971 National Cancer Act fueled scientific discoveries that have dramatically advanced understanding of the cancer process. With a vision of how these discoveries could affect cancer diagnosis and treatment, a whole new industry was born, designed to take basic research and make it useful to cancer patients. Taking their lead from developments in science, U.S. commercial biotechnology firms have brought to market monoclonal antibodies, colonystimulating factors, and other biologicals. According to industry observers, the future never looked so good. "In the early 1980s, the certainty wasn't there that it was for real. It was a rollercoaster ride," said Ashley Stevens, Ph.D., director of the Office of Technology Transfer at the DanaFarber Cancer Institute, Boston. "Now, there is no doubt in people's minds that biotech will produce blockbuster drugs."
Stock Sales
Beverly Zakarian
1608
This confidence has been reflected in the stock market. "More [money] was raised in the last year than has ever been seen before," he added. "Even small companies with preclinical drugs can get money." During 1991, biotech companies sold $17.7 billion in stocks, the highest 5-month total in history. Today, 750 biotechnology firms have about 100 drugs in various stages of development; more than half of those drugs target cancer or cancer-related conditions. Many products that have
been in research for years are now becoming commercial. Industry revenues for 1990 were estimated at $2 billion, according to the U.S. Office of Technology Assessment. Sales are expected to reach $15 billion by the year 2000, according to Mark D. Dibner, Ph.D., of the North Carolina Biotechnology Center.
Science and Policy The industry got started by people moving from academia to the commercial sector, or working in both, according to Stevens. The first biotech firm, Genentech, South San Francisco, was founded in 1976 by venture capitalist Robert Swanson with Herbert Boyer, Ph.D. Boyer, while at the University of California, San Francisco, created the first recombinant DNA with Stanley Cohen, M.D., of Stanford University. But just as important as the scientific discoveries were the federal policies that were put in place in the early 1980s to make the investments financially worthwhile, such as capital gains incentives and patent protections, Stevens said. For example, the capital gains tax cut of 1978 caused an enormous influx of funds to venture capital, Stevens said. In addition, the Bayh-Dole Act of 1980 gave universities the means and the incentives to aggressively market their technology, and in 1981 the Chakrabarty patent decision established the patentability of genetically altered living organisms In 1982, the establishment of the U.S. District Court of Appeals for the federal circuit swung the balance from
Journal of the National Cancer Institute
Downloaded from http://jnci.oxfordjournals.org/ at University of Sussex on August 15, 2015
like a dinosaur; it needs to be restructured by bringing in new managers and new leaders," Schonfeld said. "We have all these innovations pouring out of the labs and they have to pass through the eye of the regulatory needle — the FDA — and the needle is getting smaller all the time so that drugs and innovations cannot be adequately evaluated," Schonfeld said. The Cancer Patients Action Alliance (CAN ACT), a group that has targeted off-label reimbursement as a central advocacy issue, hopes the report will stimulate creation of a standardized federal policy regarding offlabel reimbursement. Only two states, New York and Michigan, mandate offlabel reimbursements, although Texas is considering similar legislation. "Generally, [the GAO Report] is an important document. But to be fair, the FDA never said that it doesn't support off-label use, but its actions have caused the problems and we really have to take a long hard look at that," said CAN ACT President Beverly Zakarian.
