Monthly Archives: June 2015

ASCO releases value framework for assessing value of cancer drugs

It’s no surprise that costs of cancer drugs are high.  Recent estimates put the average cost of cancer drugs at $10,000 per month with some therapies costing as much as $65,000 per month.  If it weren’t for insurance, prices this high would put cancer drug therapy out of reach for most families.  Even with insurance, many families cannot afford cancer drugs because of high patient cost sharing.  Many insurance programs, such as the Medicare Part D program, set patient cost sharing as a percentage of the drug’s cost (usually in the 20% to 30% range) rather than as a fixed dollar amount.  Medicare Part B, which covers most injectable cancer drugs, has a patient cost share of 20%.  How many families can afford cost sharing of $2,000 to $3,000 per month?

Oncologists and their professional organizations are concerned about this and have taken steps to address the problem.   The WSJ  recently reported that Memorial Sloan Kettering Cancer Center has developed an on-line, interactive tool to help physicians and patients determine what cancer drugs are worth.  I will discuss this tool in next week’s post.  Today’s post will discuss a value framework for assessing the value of cancer drugs that was recently announced by the American Society of Clinical Oncology (ASCO),  the professional organization representing oncologists.

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Discounts, rebates and kickbacks

One of the purposes of this blog is to educate readers about basic issues in pharmacy business.  This post will discuss the differences between discounts, rebates, and kickbacks.  Warning – I am not a lawyer and this is not a legal opinion.  It’s a non-lawyer’s attempt to understand and explain some basic pharmacy business concepts.

A headline on the Wall Street Journal Health Blog from earlier this year announced that “AstraZeneca Pays $7.9M to Settle Kickback Charges Paid to a PBM”   The federal government alleged that AstraZeneca made illegal rebate payments to Medco in exchange for preferred formulary position for Nexium (a very popular drug prescribed for ulcers).

Pharmaceutical companies commonly provide rebates to PBMs and specialty pharmacies to increase use of their products, so why was the rebate in this situation a kickback? Continue reading