Recommendation 3. Minimize the contributions of drug costs to financial toxicity for cancer patients and their families.
Patients’ out-of-pocket costs for cancer drugs vary widely depending on a number of factors, such as cancer type, treatment plan, treatment setting, insurance status, and benefit design.1,2 The shift toward high-priced specialty drugs—which include most targeted therapies and immunotherapies—has substantially increased out-of-pocket costs for many patients. For example, average out-of-pocket costs for cancer drugs increased from $450 per month in 2001 to $647 per month in 2011 for nonelderly, privately insured patients, coinciding with an increase in use of targeted cancer drugs.3 These costs are likely to rise in the future with the advent of more immunologic therapies that have potential to be highly effective.
Although drugs are not the most expensive part of cancer care for most patients,1,4 drug costs are a significant concern for patients and their families. A nationally representative survey found that more than 90 percent of Americans think the cost of cancer drugs is too high.5 High out-of-pocket drug expenses can have a detrimental impact on patients’ care and well-being. Several studies of different patient populations have found that those with higher out-of-pocket costs for drugs are less likely to adhere to their treatment regimens.6-10 Patients may decide not to fill their prescriptions, skip doses, or take less drug than prescribed to save money.5,9 Other patients may deplete their savings, incur debt, or forego spending on necessities to pay for their drugs.11,12 Nonadherence to treatment regimens and experiencing significant financial hardship as a result of paying for care are examples of financial toxicity (see Financial Toxicity and Resources and Research Needed to Address Financial Toxicity). Steps should be taken to minimize the contributions of drug costs to financial toxicity for cancer patients and their families.
The term financial toxicity describes the negative impact of cancer care costs on patients and their families and caregivers. Like medical toxicities caused by cancer treatments, financial toxicity can cause significant distress, influence decisions about treatment, affect adherence to treatment, and shorten survival. Caregivers also may face financial strain if they must take significant time off from work during treatment and recovery. Financial toxicity results from a confluence of many factors, including out-of-pocket spending for drugs and other healthcare, indirect costs of care (e.g., transportation, childcare), loss of income for patients and caregivers, and insufficient financial resources. Younger patients and those with lower household incomes are at higher risk of treatment-related financial hardship.
Sources: PDQ Adult Treatment Editorial Board. Financial toxicity and cancer treatment [Internet]. Bethesda (MD): National Cancer Institute; [updated 2016 Dec 14; cited 2017 Apr 13]. Available from: https://www.cancer.gov/about-cancer/managing-care/track-care-costs/financial-toxicity-hp-pdq; President's Cancer Panel. Living beyond cancer: finding a new balance. Bethesda (MD): the Panel; 2004 May. Available from: https://deainfo.nci.nih.gov/advisory/pcp/annualReports/pcp03-04rpt/Survivorship.pdf
High-Quality Health Insurance Facilitates Affordable Access to Cancer Drugs
Health insurance—including prescription drug coverage—is a key factor in ensuring that drugs are affordable for cancer patients. Insurance plans negotiate reduced prices for their beneficiaries and usually cover a portion of drug costs. Uninsured patients are responsible for the full cost of their care, potentially leading to much higher out-of-pocket expenses. For example, the estimated patient responsibility for an infusion of gemcitabine—a drug used to treat breast, lung, ovarian, and pancreatic cancers—was $50 for Medicare beneficiaries compared with more than $2,000 for uninsured patients.13 Few patients can afford to pay these prices.
In 2017, over 90 percent of people in the United States had health insurance coverage, more than at any time in the past.14 As health insurance access has expanded, fewer Americans—including those with a history of cancer—report foregoing needed drugs because of cost.15 In addition to improved access to drugs,16 patients with health insurance are more likely to receive recommended screenings, less likely to be diagnosed with late-stage cancer, and more likely to survive after diagnosis.11,17 Future health policies should support and expand, not undermine, this progress. All Americans should have the opportunity to purchase reasonably priced, high-quality health insurance with prescription drug coverage to facilitate affordable access to cancer drugs. Limiting access to potentially lifesaving drugs could have devastating, possibly life-threatening consequences for cancer patients.
Patients’ Out-of-Pocket Expenses Should Be Limited to Minimize Financial Toxicity Caused by Cancer Drug Costs
As drug prices have increased, payers have shifted costs to patients through various cost-sharing mechanisms. An increasing number of plans are charging coinsurance—which is a percentage of a drug’s cost—rather than fixed copayments for prescription drugs. Coinsurance rates have increased in recent years, and many cancer drugs—including some generics—are placed on specialty tiers with higher rates of coinsurance.18-21 Drug prices also have contributed to insurance premium increases—about 14 percent of premium increases in 2017 were attributed to drugs.22 Increased cost-sharing has led to higher rates of underinsurance—defined as high out-of-pocket costs relative to income—among people with health insurance.23 Cost-sharing is an appropriate way to encourage judicious use of healthcare services (Recommendation 1), but it should not interfere with access to appropriate treatment or cause significant financial hardship. To protect people from excessive out-of-pocket costs, all public and private insurance plans should include out-of-pocket spending limits.
Many insurance plans already limit patients’ out-of-pocket expenses. Since 2014, all commercial insurance plans have been subject to annual out-of-pocket spending limits under the Affordable Care Act. Costs contributing to out-of-pocket maximums include deductibles, coinsurance, copayments, and other similar charges.24 For the 2018 plan year, out-of-pocket limits cannot exceed $7,350 for individuals and $14,700 for family plans (actual out-of-pocket limits vary by plan and are often lower than required).25,26 Cost-sharing subsidies paid by the federal government reduce out-of-pocket limits for low- and moderate-income individuals and families who purchase plans through the health insurance exchanges.27 Though out-of-pocket caps will not protect all patients from financial toxicity, they undoubtedly provide relief to many people facing cancer diagnosis and treatment.28 The Panel agrees with the American Cancer Society Cancer Action Network29 that limits on out-of-pocket spending should be maintained to help protect cancer patients from financial toxicity caused by costs of drugs and other components of care.
Some patients may face out-of-pocket costs of nearly $12,000 per year for one drug.
There are no out-of-pocket spending limits for most beneficiaries of Medicare Part D, Medicare’s prescription drug benefit plan.* Part D covers most orally administered cancer drugs, which account for a rapidly growing proportion of cancer drug costs.30 Unsubsidized Part D beneficiaries being treated with targeted oral cancer drugs paid an average of $810 per month out-of-pocket in 2012.31 Although this is lower than patients’ costs in earlier years (due to the closing of the coverage gap),** it may cause financial hardship for many patients.
A growing number of Part D beneficiaries are reaching the catastrophic threshold,32** in part because of the increased availability and use of high-priced drugs.33 Once this threshold is reached, patients are required to pay 5 percent of the price of their drugs.32 Costs can add up quickly, particularly for patients who must take specialty drugs for months or years. Some patients may face out-of-pocket costs of nearly $12,000 per year for one drug.34 The Panel agrees with the National Academies of Sciences, Engineering, and Medicine and the Medicare Payment Advisory Commission that Medicare Part D should eliminate cost-sharing for patients above the catastrophic threshold.35,36 Out-of-pocket spending limits may result in higher premiums for all Medicare beneficiaries or increased cost-sharing before out-of-pocket limits are reached. However, this scenario is preferable to imposing unlimited costs on patients dealing with serious diseases like cancer.
Resources and Research Needed to Address Financial Toxicity
Addressing out-of-pocket costs for drugs is critically important—particularly as drug prices rise and an increasing number of patients face coinsurance for their drugs—but it will not solve the problem of financial toxicity for cancer patients. Throughout the workshop series, the Panel heard and read many times about the overwhelming financial burden experienced by some cancer patients. Many patients—even those with health insurance—are unable to both cover their medical expenses and continue to pay for basic necessities. The scope of this problem goes beyond cancer drug costs, but the Panel believes that addressing financial toxicity is essential to ensuring that all patients achieve the best possible outcomes. Programs and resources that support cancer patients and their families are needed to prevent, detect, and address financial toxicity and ensure that costs do not exacerbate health inequities.
Financial Counseling Services
As recognition of financial toxicity has grown, many clinical settings, cancer programs, and nonprofit organizations have begun offering financial counseling services. Financial counselors may help patients navigate the complicated insurance landscape and identify external resources, including those that provide financial assistance for drugs. The increasing availability of financial counseling services is encouraging, but additional efforts are needed to ensure that information is provided in an effective manner and that the needs of all cancer patients are being met during and after treatment.
Patient Assistance Programs
Several types of programs offer financial assistance for cancer patients. Many pharmaceutical companies have programs that provide copay assistance or free drugs to patients. Other charitable organizations, such as those funded by private donations or grants, also help with treatment costs and indirect costs, such as transportation and lodging. Millions of U.S. cancer patients have received help from one or more of these programs. Concerns have been raised that some programs, particularly those sponsored by drug manufacturers, may increase spending on drugs by shielding patients from out-of-pocket expenses. The Panel shares this concern but believes that patient assistance programs should remain in place until alternative means are established to ensure access and prevent financial hardship. A shift toward value-based drug pricing and use should reduce the need for these programs.
Research to Better Prevent, Detect, and Address Financial Toxicity
Many unanswered questions remain regarding the best ways to meet patients’ financial needs. Which patients are at highest risk of financial toxicity? Who should discuss costs with patients? Should people providing financial counseling receive specialized training? What types of cost information are most helpful to patients? At what points during the cancer care continuum should cost information be provided? How and when should tools to identify risk or presence of financial toxicity be integrated into clinical care? Cancer treatment facilities should monitor outcomes related to financial counseling services, and additional research should be done to identify the best ways to prevent, detect, and address financial toxicity among cancer patients.
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* There are out-of-pocket spending limits for the approximately 30 percent of Part D beneficiaries who qualify for the Low-Income Subsidy.
** The coverage gap, sometimes called the doughnut hole, refers to the gap in Medicare Part D coverage after beneficiaries reach the initial coverage limit and before they reach the threshold for catastrophic coverage ($4,950 out-of-pocket spending for drugs under the standard benefit in 2017). When Medicare Part D was established in 2006, beneficiaries were responsible for the full cost of their drugs within the coverage gap (100% coinsurance). The Affordable Care Act included provisions to gradually reduce coinsurance rates to 25 percent between 2011 and 2020.
- Dieguez G, Ferro C, Pyenson B. A multi-year look at the cost burden of cancer care. Seattle (WA): Milliman; 2017 Apr 11. Available from: http://www.milliman.com/insight/2017/A-multi-year-look-at-the-cost-burden-of-cancer-care
- American Cancer Society. The costs of cancer. Atlanta (GA): ACS; 2017 Apr 11. Available from: https://www.acscan.org/policy-resources/costs-cancer
- Shih YC, Smieliauskas F, Geynisman DM, Kelly RJ, Smith TJ. Trends in the cost and use of targeted cancer therapies for the privately insured nonelderly: 2001 to 2011. J Clin Oncol. 2015;33(19):2190-6. Available from: https://www.ncbi.nlm.nih.gov/pubmed/25987701
- Narang AK, Nicholas LH. Out-of-pocket spending and financial burden among Medicare beneficiaries with cancer. JAMA Oncol. 2017;3(6):757-65. Available from: https://www.ncbi.nlm.nih.gov/pubmed/27893028
- American Society of Clinical Oncology. National Cancer Opinion Survey: key findings. Alexandria (VA): ASCO; 2017 Oct 24. Available from: https://www.asco.org/sites/new-www.asco.org/files/content-files/research-and-progress/documents/ASCO-National-Cancer-Opinion-Index-infographic.pdf
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- Shen C, Zhao B, Liu L, Shih YT. Adherence to tyrosine kinase inhibitors among Medicare Part D beneficiaries with chronic myeloid leukemia. Cancer. [Epub 2017 Oct 4]. Available from: https://www.ncbi.nlm.nih.gov/pubmed/28976559
- Dusetzina SB, Winn AN, Abel GA, Huskamp HA, Keating NL. Cost sharing and adherence to tyrosine kinase inhibitors for patients with chronic myeloid leukemia. J Clin Oncol. 2014;32(4):306-11. Available from: https://www.ncbi.nlm.nih.gov/pubmed/24366936
- Bestvina CM, Zullig LL, Rushing C, Chino F, Samsa GP, Altomare I, et al. Patient-oncologist cost communication, financial distress, and medication adherence. J Oncol Pract. 2014;10(3):162-7. Available from: https://www.ncbi.nlm.nih.gov/pubmed/24839274
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- Szabo L. As drug costs soar, people delay or skip cancer treatments. Shots: Health News from NPR [Internet]. 2017 Mar 15 [cited 2017 Dec 8]. Available from: https://www.npr.org/sections/health-shots/2017/03/15/520110742/as-drug-costs-soar-people-delay-or-skip-cancer-treatments
- Dusetzina SB, Basch E, Keating NL. For uninsured cancer patients, outpatient charges can be costly, putting treatments out of reach. Health Aff (Millwood). 2015;34(4):584-91. Available from: https://www.ncbi.nlm.nih.gov/pubmed/25847640
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- Pearson CF, Carpenter E, Sloan C. Consumer costs continue to increase in 2017 exchanges [Press Release]. Washington (DC): Avalere; 2017 Jan 18. Available from: http://avalere.com/expertise/life-sciences/insights/consumer-costs-continue-to-increase-in-2017-exchanges
- Pearson CF. Majority of drugs now subject to coinsurance in Medicare Part D plans [Press Release]. Washington (DC): Avalere; 2016 Mar 10. Available from: http://avalere.com/expertise/managed-care/insights/majority-of-drugs-now-subject-to-coinsurance-in-medicare-part-d-plans
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- Avalere. Outpatient services are the largest driver of 2017 premium increases. Washington (DC): Avalere; 2016 Aug 2. Available from: http://avalere.com/expertise/life-sciences/insights/outpatient-services-are-the-largest-driver-of-2017-premium-increases
- Collins SR, Gunja MZ, Doty MM. How well does insurance coverage protect consumers from health care costs? Findings from the Commonwealth Fund Biennial Health Insurance Survey, 2016. The Commonwealth Fund; 2017 Oct. Available from: http://www.commonwealthfund.org/~/media/files/publications/issue-brief/2017/oct/collins_underinsured_biennial_ib.pdf
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