PHARMA/POLICY: Oncologists, chemo and the new reality, by Gregory Pawelski

New contributor Gregory D. Pawelski writes for THCB about the changes in oncology and chemotherapy reimbursement. TCHB has posted several articles about those changes, notably from regular contributor Matt Quinn. Gregory writes from a slightly different viewpoint with considerable passion. As he wrote in this heartfelt article on the Johns Hopkins site, he nursed his wife through the agony of chemotherapy, and has since researched into chemotherapy and cancer treatment in depth. Passionate he may be, but Gregory has some important things to say that are well worth considering:

Some irate oncologists are angry and hope to turn patients into lobbyists, warning patients that they may face a return to hospitalization. And yes, some of them are threatening to refuse treating Medicare patients altogether. These kinds of threats are abhorrent! Even Medicare officials have denounced some of these oncologists as alarmist and untrue.

Some of them are telling their patients that because of the new reimbursement system, patients might have to “switch to older medications”. That may not be a bad idea! Presently used chemotherapy drugs have a high rate of failure, according to January 10, 2002 issue of the New England Journal of Medicine. Oncologists at a single institution may obtain a 40% – 50% response rate in a tightly controlled study, but when these same chemotherapy drugs are administered in a real world setting, the response rates decline to only 17% – 27%.

Real world setting after real world setting has been showing that presently used chemotherapy drugs have failed to show clinical advantage over standard (older, less toxic drugs) regimens. According to a multicentre Southwest Oncology Group study, there is no significant difference in survival, response rates or quality of life between standard (cheaper) regimen and dose-intense (more expensive) treatment arms.

The results of years of clinical trials on patient populations are considered enough indication on how an individual will respond. The percentage of patients that must respond to a drug before it is approved varies from as low as 20% to as high as 80%, depending on the type of cancer. Thereafter it is used routinely for all patients with the same form of cancer, though unfortunately a drug that helps one person does not necessarily mean that it will help all people with the same diagnosis.

One of the commonest methods to test a new drug is not against an already effective treatment but against a placebo. However, what matters most to patients is not whether a company’s drug is better than nothing, but whether it is better than established treatments. European regulators already require drug makers to compare new drugs with older ones (comparative drug testing), while the FDA simply asks that drug makers compare new drugs with placebos. When you look at the results, there is almost never a difference between active treatments.

Oncologists long avoided cuts forced on other specialists because the government allowed them to bill Medicare for cancer drugs in amounts that often far exceeded their actual costs. The system was widely criticized and the General Accounting Office found that doctors were able to get discounts as high as 86% on some drugs.

Even the American Society of Clinical Oncologists say, “we did not like the old system, even the perception that it set up inappropriate incentives we did not support.” Some studies suggest that American oncologists overuse cancer drugs, particularly in the last months of patients’ lives after the patients have failed to respond to treatment. Advocates for cancer patients say that Medicare’s reimbursement system encouraged overtreatment.

The January 1, 2001 issue of the Journal of Clinical Oncology revealed that in 1999 the average annual income of oncologists in private practice was $253,000. By comparison, oncologists in academic medicine earned “only” $142,000. Where does the bulk of a private oncologist’s income come from? The Journal of the National Cancer Institute (JNCI) commented that “private-practice oncologists typically derive two-thirds of their income from selling chemotherapy” (JNCI 2001;93:491).

An editorial from Dr. Larry Weisenthal, one of the very first medical oncologists to call attention to this issue at a Medicare Reimbursement Executive Committee meeting held in Baltimore, Maryland on December 8, 1999 states, “the new law was simply concerned about the indisputable fact that the ‘structure’ of the old reimbursement system was indefensible. It rewarded oncologists for administering chemotherapy. It did not reward oncologists for spending a half hour explaining to the patient why she/he is more likely to be harmed by chemotherapy than to be helped by it.”

The new system still has major flaws, in that it continues to provide incentives to administer chemotherapy, in the same way that surgeons have a financial incentive to recommend surgery. Additionally, it is a certainty that there will be large differences between the profit margins of administering different drugs, providing continuing incentives to base drug selection on profit margin. However, the new system is clearly an improvement from the standpoint of cancer patients, taxpayers, and advocates of basing drug selection on individual tumor biology, rather than on a least common denominator approach which invites conflict-of-interest medical decision-making.”

Office-based oncology practices derive most of their revenues from treating patients with chemotherapy. The practices are compensated both for delivering the drugs and for the drugs themselves. The Journal of the National Cancer Institute (JNCI) states that private-practice oncologists typically derive two-thirds of their income from selling chemotherapy.

Reimbursement of any kind is often lacking with oral-dose drugs because the patient purchases them directly. The oncologist simply writes a prescription and the patient goes to a pharmacy and obtains the product. There are no administration fees for office-based oncology practices unless they also dispense the drugs, because there is no involvement in their purchase.

The practice will realize almost no revenue from those patients who are treated entirely with oral-dose agents. The core activity in medical oncology is the provision of infusional chemotherapy. The entire structure of office-based practices revolves around this activity and is what distinguishes medical oncology from most other specialties.

Oral-dose chemotherapeutic agents are easy to use and offer the promise of less frequent visits to the physician’s office and their infusion rooms. This promise is not trivial, especially as we have come to realize that many forms of cancer may be managed with these drugs, especially when they offer the equivalent outcome as intravenous drugs.

The fact that medical oncologists receive no reimbursement for providing oral-dose therapy to patients had been the principal barrier to the availability of oral-dose protocol. The advent of oral agents ultimately means that medical oncology will need to change its identity, prior to the chemotherapy drug concession.

They will be reimbursed for providing evaluation and management services, making referrals for diagnostic testing, radiation therapy, surgery and other procedures as necessary, and offer any other support needed to reduce patient morbidity and extend patient survival.

Because oral-dose drugs ultimately deliver on their promise of combining equally efficacious therapy with better adverse event profiles and easier administration, they will rightfully gain their appropriate share of the marketplace, again.

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  1. Update on the Chemotherapy Drug Concession:
    There was a joint Michigan/Harvard study authored by Drs. Joseph Newhouse and Craig C. Earle, entitled “Does reimbursement influence chemotherapy treatment for cancer patients?” It confirmed that medical oncologists chose cancer chemotherapy based on how much money the chemotherapy earns the medical oncologist.
    The authors documented a clear association between reimbursement to oncologists for the chemotherapy and the regimens which oncologists select for their cancer patients. In other words, oncologists tended to base their treatment decisions on which regimen provided the greatest financial remuneration to the oncologist.
    The study adds to the ‘smoking gun’ survey by Dr. Neil Love, entitled “Patterns of Care.” One of the results of this survey shows that for first line chemotherapy of metastatic breast cancer, 84-88% of the academic center-based oncologists (who do not derive personal profit from infusion chemotherapy) prescribed an oral dose drug (capecitabine), while only 13% prescribed infusion drugs, and none of them prescribed the expensive, highly remunerative drug docetaxel.
    In contrast, among the community-based oncologists (who do derive personal profit from infusion chemotherapy), only 18% prescribed the oral dose drug (capecitabine), while 75% prescribed infusion drugs, and 29% prescribed the expensive, highly remunerative drug docetaxel.
    While the Michigan/Harvard study showed results before the new Medicare reform, the Patterns of Care study showed results that the Medicare reforms are still not working. It is still an impossible conflict of interest.
    And the existence of this profit motive in drug selection has been one of the major factors working against the individualization of cancer chemotherapy based on testing the cancer biology.
    Two scientific studies giving us a dose of reality that once a decision to give chemotherapy is taken, oncologists receiving more-generous Medicare reimbursements used more-costly treatment regimens.
    http://patternsofcare.com/2005/1/editor.htm (figure 37, volume 2, issue 1, 2005)