Tom McCann

The pressure on employers to manage the rising costs of health care is increasingly focused on the pharmacy benefit plan. Within the pharmacy benefit, there is a significant expenditure differential between specialty and traditional drugs. In 2012, traditional drug expenditure actually decreased by 1.5%, while specialty drug expenditure increased by 18.4%. Oral chemotherapy on the pharmacy benefit grew over 25% in this period.

As a class, cancer now ranks third in overall specialty pharmacy drug spending, and it can be expected to continue to rise throughout this decade. The routine approval of new medications for cancer comes with a price — a price that is gaining the attention of health plans, PBMs, and employer benefit managers. In the 2012 Genentech Oncology Trend Report, managed care organization respondents identified quantity-limit programs as the number one strategy for specialty pharmacy providers to create oncology- related cost savings. While there is much activity and interest related to these quantity-limit programs, plan sponsors and benefits managers may have unrealistic expectations regarding cost avoidance associated with this strategy.

Oral oncology limits

Oral oncology quantity-limit programs, presented under different names such as cycle-management, short-fill, or split-cycle programs, are designed to avoid costs associated with unused oral chemotherapy and are most often focused on the first month or cycle of treatment. In most quantity-limit programs, the first treatment cycle is split into two equal shipments. The patient is contacted several days into treatment and given an assessment by a clinical representative of the specialty pharmacy. In the event that the patient cannot continue treatment for any reason, the remainder of the medication is not shipped, avoiding patient or plan sponsor liability for several thousands of dollars of unused oral chemotherapy. It can be expected that because of the mid-cycle intervention by a pharmacist or nurse from the specialty pharmacy, patients may actually see an improvement in treatment adherence, a very valuable side effect of this program. Intuitively, this seems to be an obvious strategy to avoid unnecessary spending and improve adherence to treatment. However, benefits managers and chief financial officers should pause to consider the real financial effect on their populations and balance any savings potential with risks of interruption of the treatment cycle.

Tom McCann

Quantity-limit programs offer some hope in cutting the expense of cancer care, not so much because payers can avoid the direct cost of the drugs, but rather through clinical interaction, says author Tom McCann.

In 2013, there are approximately 27 oral oncology medications available. While this number continues to grow, not all of these medications can be dispensed in durations appropriate for a quantity-limit program. Many are subject to risk evaluation and mitigation strategy (REMS) programs that restrict change in quantity dispensing, while other medications may have dosing variability or complexities that can introduce a level of risk that is inappropriate for limiting quantities. Of oral oncology drugs that may be appropriate for quantity-limit programs, most will have limited use due to the low incidence of treatment.

The four most commonly used oral oncology drugs based on total quantity dispensed in 2009 (excluding medications that are subject to REMS requirements) account for more than 86% of total oral chemotherapy volume (Figure 1). They are Gleevec (48%), Tarceva (22.2%), Sutent (9.5%), and Nexavar (6.4%).

Figure 1 Market share by total quantity dispensed for antineoplastic enzyme inhibitors*

Market share for antineoplastic enzyme inhibitors

*Period ending December 2009.
Source: CVS Caremark BOB Metrics 2009 Trend Cohort Excluding Medicare Part D (January–December 2008 vs. January–December 2009).

While utilization is not always limited to FDA-approved indications, the most common cancers treated by these four oral chemotherapies are leukemia (chronic myeloid leukemia or CML), lung, and kidney. Publicly accessible data on new start rates for these medications is limited, but can be estimated using information from the United States Cancer Statistics published by the Department of Health and Human Services, Centers for Disease Control and Prevention, and National Cancer Institute Web-based report (Table 1, below). These sources report cancer incidence rates per 100,000 lives, providing a baseline of understanding for a payer population’s exposure to specific types of cancer.

Table 1 Cost avoidance per 100,000 lives for oral oncology market share leaders using quantity-limit programs
Oral oncology market leader Tarceva Sutent/ Nexavar Gleevec
Cancer site Lung Kidney Leukemia
Rate per 100K lives 77.1 21.1 15.4
% Patients receiving chemo 50% 22%(a) 34%(b)
Cost avoidance potential/NRx $1,790 $2,764(c) $2,057
% Drop off rate 13% 26% 2%
Avoided shipments(d) 5.1 1.2 0.1
Cost avoidance total(e) $9,129 $3,317 $206 $12,652
(a) Data not shown for kidney cancer. Default value of 22% used from “average for all cancers”
(b) Data shown is for CLL and used to represent CML as default value
(c) Average of Sutent and Nexavar
(d) Avoided shipments = (rate per 100K lives) x (% patients receiving chemo) x (% Drop-off rate)
(e) Cost Avoidance Total = (Cost avoidance potential/Rx) x (Avoided Shipments)

In a commercial population, only about 22% of patients diagnosed with the most common types of cancer will receive chemotherapy of any kind (oral or infused) in any year. Lung cancer patients are treated with chemotherapy approximately 50% of the time at some point during a year-long period, while leukemia and kidney cancer patients are less likely to be treated with chemotherapy. Pharmacy benefit managers and specialty pharmacy providers that manage oral oncology drugs routinely report discontinuation rates for these four medications at less than 30%, and even less for extremely well tolerated drugs like Gleevec. When projecting incidence rates for the most common types of cancer that can be treated with oral chemotherapies, discounting those patients not on chemotherapy and isolating only patients who discontinue therapy on the first treatment cycle, actual drug-cost avoidance per 100,000 lives can be expected to be less than $13,000 (Table 1). Considering that total specialty spending for a commercial population of 100,000 lives is approximately $24.6 million, direct savings from a quantity-limit program can be as little as 0.18% of total specialty spending.

Clearly, there are additional oral oncology drugs that can now be included in quantity-limit programs. However, these four oral oncology drugs represent a significant percentage of oral oncology utilization that is appropriate for a quantity-limit program. Gleevec, in particular, is typically the leading oral oncology drug in terms of total market share and is often the target of oral oncology quantity-limit programs. While Gleevec does command a significant portion of oral oncology spending, this is a reflection of the chronic use of this medication and is not due to the frequency of diagnosis of CML. Furthermore, pharmacy benefit managers report Gleevec adherence rates of much greater than 90%, significantly reducing the potential of direct savings associated with avoidance of drug shipments.

Greater clinical oversight

Beyond cost-savings promises, quantity-limit programs typically offer greater clinical oversight during the onboarding of the “new to treatment” patient. Many who discontinue their oral oncology treatment, especially in the first treatment cycle, do so for avoidable reasons. The mid-cycle intervention of a specially trained clinical representative of a specialty pharmacy can help manage side effect or dosing concerns that may lead to noncompliance with treatment or even lead to unnecessary hospital or emergency room visits.

A shrewd benefits manager may conclude that any saving is worth pursuing and, as new drugs are introduced into the program, saving will increase. While this is true, it is important to understand that these are not risk-free savings. Quantity-limit programs are designed to manage waste at the outset of oral chemotherapy treatment. For a newly diagnosed cancer patient or an existing cancer patient with progressive disease, starting oral chemotherapy can be daunting. Coordination with antiemetic therapy, changes in diet, side effects, and more can significantly affect adherence to treatment. Adding an additional administrative drug delivery in the initial treatment cycle — either in a retail or home delivery scenario — can add adherence risk for no clear clinical value. Without an overwhelming clinical or even financial justification, benefits managers will need to carefully weigh the value of these quantity-limit programs in terms of real cost avoidance, improvements in adherence, and potential disruptions in treatment due to product delivery or care coordination errors.

In the balance, quantity-limit programs offer some hope in addressing the growing costs associated with cancer care. However, the direct effect of these programs may come more from increased clinical interactions and less from direct drug cost avoidance. Prior to implementation, benefits managers should require rigorous modeling of oral oncology quantity-limit programs in order to fully understand the cost savings and the effect on their populations.

For further reading

  • Antineoplastic Enzyme Inhibitor Drug Trend Utilization in the United States. Anna A. Theodorou, RPh, MBA; Kelly M. Johnson, MBA; and Tamra Wade. Am J Pharm Ben. June 2010.
  • Cancer Patients Receiving Chemotherapy: Opportunities for Better Management. Milliman Client Report. March 30, 2010.
  • CVS Caremark Oral Oncology Drug List (effective 10/1/2012).
  • Express Scripts 2012 Drug Trend Report.
  • Impact of Clinical Oral Chemotherapy Program on Wastage and Hospitalizations. Nikhil Khandelwal, PhD, BPharm; Ian Duncan, FSA, FIA, FCIA, MAAA; Tamim Ahmed, PhD, MBA; Elan Rubinstein, MPH, PharmD; and Cheryl Pegus, MPH, MD. Am J Manag Care. 2011;17(5 Spec No.):e169‐173.
  • Integrated Medical and Pharmacy Prevalence of Members Diagnosed and Treated within a Specialty Condition/Drug Class. B. Gunderson, K. Slavik, C. I. Starner, J. Phillips, P.P. Gleason. AMCP Poster, presented April 20, 2012, San Francisco, CA, USA.
  • Medco Health Solutions data on file (accessed March 14, 2013)
  • Prime Specialty Therapeutic Category Profile. February 2010. Targeted%20Cancer%20Profile.pdf
  • The 2012 Genentech Oncology Trend Report (Figure 8).
  • U.S. Cancer Statistics Working Group. United States Cancer Statistics: 1999‐2009 Incidence and Mortality Web-based Report. Atlanta (GA): Department of Health and Human Services, Centers for Disease Control and Prevention, and National Cancer Institute; 2013. Available at:

Tom McCann is vice president for strategic services at Hobart Holdings, a pharmaceutical marketing agency solely focused on payer strategy. Before joining Hobart, he was vice president for oncology marketing and market access at Accredo Health Group. He has over 20 years of experience in pharmaceutical sales, marketing, and managed care. He holds a master’s degree in human resource management from Troy University and a bachelor’s degree from the United States Military Academy at West Point.

Conflict of interest statement: This article is based solely on the author’s personal experience, was not commissioned or influenced by any pharmaceutical manufacturer, and was not a billable effort.

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