PHARMA/POLICY: Medicare Part D

Jul 15, 2005• 3

This is a complete cop-out as I’m still hacking away on my Hillarycare piece, and haven’t even read this, but the article in Health Affairs called Riding The Rollercoaster: The Ups And Downs In Out-Of-Pocket Spending Under The Standard Medicare Drug Benefit looks pretty interesting and I think suggests that we have an ongoing spending problem emerging in Part D even before it hits!.

Does one of my contributors care to read it and review? (email me for a Health Affairs pw if you haven’t got one)

Categories: Uncategorized

Tagged as: Pharma, Policy/Politics, Uncategorized

I know that the “doughnut hole” and the “drug price negotiation” needs to be drastically changed before 2006. My specific interest in the new Medicare bill has been in the “drug concession” provision. What that did was to remove the profit incentive from the choice of cancer treatments, which were financial incentives for infusional-therapy over oral-therapy or non-chemotherapy, and financial incentives for choosing some drugs over others. Patients should receive what is best for them and not what is best for their oncologists.
The new Medicare bill offers patients benefits they did not have before, some coverage for oral-chemotherapy drugs (full coverage in 2006). Compared to infusional-chemotherapy, oral-dose anti-cancer drugs can make receiving cancer treatment more convenient for patients by allowing flexibility in taking medication without disrupting work or other activities. This can often result in less time (or no time) spent in office-based oncology practices because of the absence of intravenous administration and its related side-effects.
The Community Oncology Alliance (COA) and the American Society of Clinical Oncologists (ASCO) say that the government is reducing payment for cancer care under the new Medicare bill (MMA). However, that’s not what they are doing. They are simply reducing overpayment for drugs. The government can’t afford to overpay for drugs, in an era where all these new drugs are being introduced, which are fantastically expensive.
The costs of a month’s worth of the new drugs Herceptin and Avastin average $8,000. This is not reimbursement or overreimbursement for services; this is simply the cost of the drugs. The thing about drugs like Herceptin and Avastin is that they are pretty much taken chronically, in some cases perhaps for years. The “old” drugs would typically just be given for six months or so. Eliminating the “doughnut hole” would drastically help these kind of patients.
So cancer patients have a choice. Keep overpaying their oncologists and not have access to new generations of cancer therapeutics. Or keep payments in line with actual costs and perhaps have something left over to help pay for the new drugs.
However, by continuing the additional $130 per infusional-chemotherapy per recipient treatment (CMS Demonstration Project) into 2006 will exacerbate existing economic and clinical problems instead of resolving them by increasing the temptations for physicians to overuse injectable drugs and promise to aggravate the economic problems Congress attempted to fix with the new law. That should stop by the end of 2005. CMS should not extend it.
There is an effort by COA to encourage some members of Congress to ask the President to extend this provision. It should be stopped.

3 replies »

Gregory D. Pawelski says:

Sep 28, 2006 at 5:42 pm

Report: Doctors’ $275M Study Questioned
By KEVIN FREKING
The Associated Press
Tuesday, August 29, 2006
http://www.boston.com/yourlife/health/aging/articles/2006/08/29/report_doctors_275m_study_questioned/
Medicare Drug Plan Helps Patients Fight Cancer
By Steven Reinberg
HealthDay Reporter
http://news.yahoo.com/s/hsn/20060912/hl_hsn/medicaredrugplanhelpspatientsfightcancer&printer=1
Gregory D. Pawelski says:

Jul 15, 2005 at 9:43 am

I know that the “doughnut hole” and the “drug price negotiation” needs to be drastically changed before 2006. My specific interest in the new Medicare bill has been in the “drug concession” provision. What that did was to remove the profit incentive from the choice of cancer treatments, which were financial incentives for infusional-therapy over oral-therapy or non-chemotherapy, and financial incentives for choosing some drugs over others. Patients should receive what is best for them and not what is best for their oncologists.
The new Medicare bill offers patients benefits they did not have before, some coverage for oral-chemotherapy drugs (full coverage in 2006). Compared to infusional-chemotherapy, oral-dose anti-cancer drugs can make receiving cancer treatment more convenient for patients by allowing flexibility in taking medication without disrupting work or other activities. This can often result in less time (or no time) spent in office-based oncology practices because of the absence of intravenous administration and its related side-effects.
The Community Oncology Alliance (COA) and the American Society of Clinical Oncologists (ASCO) say that the government is reducing payment for cancer care under the new Medicare bill (MMA). However, that’s not what they are doing. They are simply reducing overpayment for drugs. The government can’t afford to overpay for drugs, in an era where all these new drugs are being introduced, which are fantastically expensive.
The costs of a month’s worth of the new drugs Herceptin and Avastin average $8,000. This is not reimbursement or overreimbursement for services; this is simply the cost of the drugs. The thing about drugs like Herceptin and Avastin is that they are pretty much taken chronically, in some cases perhaps for years. The “old” drugs would typically just be given for six months or so. Eliminating the “doughnut hole” would drastically help these kind of patients.
So cancer patients have a choice. Keep overpaying their oncologists and not have access to new generations of cancer therapeutics. Or keep payments in line with actual costs and perhaps have something left over to help pay for the new drugs.
However, by continuing the additional $130 per infusional-chemotherapy per recipient treatment (CMS Demonstration Project) into 2006 will exacerbate existing economic and clinical problems instead of resolving them by increasing the temptations for physicians to overuse injectable drugs and promise to aggravate the economic problems Congress attempted to fix with the new law. That should stop by the end of 2005. CMS should not extend it.
There is an effort by COA to encourage some members of Congress to ask the President to extend this provision. It should be stopped.
Abby says:

Jul 15, 2005 at 8:22 am

I don’t think I have the expertise to do a review, but I’ve got a shameless request. When you get around to writing about the failure of HillaryCare, could you please address Brad DeLong’s criticisms of her managerial style?
DeLong said that she needlessly antagonized people on the Hill and that she ignored substantive criticisms of her plan. You can read his comments in a post explaining why she should never be president.