Drug parity legislation: States, organizations seek to make oral cancer drugs more affordable


  • Carrie Printz

When Georgia resident Carolyn Jones was diagnosed with gastrointestinal stromal tumor in 2009, she began treatment with imatinib mesylate (Gleevac), an oral cancer drug that typically costs nearly $4000 a month. “The cancer I have is incurable, but this medication has been successful in keeping it at bay,” she says. “My oncologist said I'll be on it for years.”

From a drug affordability standpoint, Jones was one of the lucky ones. Because she is unable to work and does not have insurance, staff at Grady Memorial Hospital in Atlanta, Georgia (where she was treated) arranged a special program with the drug's manufacturer, Novartis (Basel, Switzerland). The company covers most of the costs so that Jones only pays $3 per month for the drug she needs to manage the disease. She is in the small minority of patients who benefit from such a program, however.

Many other patients, particularly those with insurance, do not qualify for this type of assistance and are faced with much higher out-of-pocket costs for oral cancer drugs. Some newer drugs are even more expensive than Gleevac.

“As of 5 years ago, I would say that 70% of chemotherapy was given intravenously, but these days it feels more like 50/50 [between oral and intravenous drugs],” says R. Donald Harvey, PharmD, assistant professor of hematology/oncology at the Emory University School of Medicine in Atlanta, Georgia. “Of the drugs that are in the pipeline, about 30% are oral. We will see more and more oral drugs, and we may see a combination of the 2 to treat certain cancers.” He anticipates these drugs will be used more frequently as cancer becomes more of a chronic disease that can be managed for a long time by medication.

According to the American Society of Clinical Oncology, the US Food and Drug Administration has approved more than 40 oral anticancer medications for the treatment of 54 different types of cancer. These drugs enable patients to receive treatment outside the hospital or physician's office and to experience less disruption in their lives. However, some health insurance plans impose much higher copayments on patients receiving oral cancer drugs than those treated with drugs that are administered intravenously. Not only can the costs be devastating, but as many as 10% of patients with cancer do not fill oral prescriptions because of the enormous expense, thus hampering their treatment.

State and Federal Levels

As much as 20% to 25% of the cost of these drugs is shifted to the patient in out-of-pocket costs that can be upward of $30,000 annually, says Hagop Kantarjian, MD, chairman of the leukemia department at The University of Texas MD Anderson Cancer Center in Houston, who has also been leading an effort by more than 100 cancer specialists to convince pharmaceutical companies to lower their drug prices to enable patients to afford their treatments. “No one will be able to afford that,” he says. “It will bankrupt Medicare and the health care system.”

Health insurers generally cover most of the costs for intravenous chemotherapy that patients receive at infusion centers, but that is not the case for oral cancer drugs, depending on the state in which a patient lives. Over the past 5 years, cancer organizations and patient advocacy groups have successfully helped to pass oral parity laws in 26 states and the District of Columbia. At the same time, active legislation is pending in Missouri, Wisconsin, Michigan, Ohio, Pennsylvania, Maine, and North Carolina, whereas coalitions are planning to introduce legislation this year in Kentucky, Arizona, Idaho, South Carolina, and Georgia.

In addition, a federal law, the Cancer Drug Coverage Parity Act of 2013 (H.R. 1801), was introduced in April 2013 by US Representative Brian Higgins (D-NY). At press time, the bill, which has received bipartisan support, had been assigned to a congressional committee. Oral parity legislation requires health insurance plans to cover all oral anticancer medications so that patients pay the same cost percentage for oral drugs as they do for intravenous treatments. However, these laws only apply to privately insured patients and not to those who are covered by Medicare, says Dr. Kantarjian. “Medicare will reimburse for a drug if it is traditionally given in a hospital or physician's practice setting,” he says. “They won't cover it if the patient is taking the drug on his or her own.”

As a result, he says that physicians, hospitals, and pharmaceutical companies benefit at the expense of patients and the overall health care system. However, if enough states pass these laws, Dr. Kantarjian is hopeful that Medicare will begin paying equally for oral medications as well as intravenous treatments.

Further Efforts

Nevertheless, Dr. Kantarjian and others note that parity laws are only one solution to the problem, and they will not address the larger issue of the escalating costs of cancer therapies.

“Companies will charge what the market will bear,” Dr. Harvey says. “The life cycle of a patent on a drug is for a limited period of time, and manufacturers have a certain model they follow to make it a profitable venture that is based on the duration and frequency of the disease and the time that is expected most patients will be on it.”

Dr. Kantarjian puts it a bit more bluntly. “Pharmaceutical companies are becoming greedy,” he says. “They are moving from simple profits to profiteering. At most, costs should be one-half to one-third of what they are now.”

Donald W. Light, PhD, a professor at the Rowan University School of Osteopathic Medicine in Stratford, New Jersey and a visiting fellow at the Edmond J. Safra Center for Ethics at Harvard University in Cambridge, Massachusetts, as well as a leader in medical ethics, also finds the current situation unacceptable. “It's highly unethical to discriminate against people when they are seriously ill,” he says. “Only the United States allows in law and practice the singling out of the most vulnerable and poor for, in a way, punishment.”

Indeed, other countries have systems in place for evaluating the costs and benefits of drugs and setting prices, which does not occur in the United States, according to both Dr. Kantarjian and Dr. Light. In addition, Dr. Light says that approximately 90% of all newly approved drugs are judged by independent physician groups to have few or no clinical advantages over existing drugs.[1] “Our laws are driven to help special interest groups such as the pharmaceutical companies against the interests of citizens and patients,” Dr. Kantarjian says. “I don't see how that system is sustainable.”

He hopes that his efforts to call attention to skyrocketing cancer drug prices will gain momentum. Since initiating his campaign in April 2013, Dr. Kantarjian has seen more attention to the matter, including a New York Times article published in April and interest from the American Society of Clinical Oncology in addressing the matter.

He sees 2 options: working to solve the problem or doing nothing and letting drug prices increase by 20% every year, eventually bankrupting many more patients and Medicare as a whole.

The saddest part is seeing patients who could have been helped eventually die of their disease, Dr. Kantarjian says. “Usually, these people have done everything right,” he says. “They went to college; got a degree, a job, and insurance; and then they got a catastrophic illness and went bankrupt so they couldn't take their medicine,” he says. “They come back when they're dying, and there's nothing else we can do to help them, and they die. It happens all the time.”

The life cycle of a patent on a drug is for a limited period of time, and manufacturers have a certain model they follow to make it a profitable venture. —Donald Harvey, PharmD