Emerging Cancer Drugs
Cost may prohibit access to newly approved targeted cancer drugs that offer promising vehicles for treatments associated with marked improvements in clinical outcomes (Table 1). These new drugs, available for difficult-to-cure cancers, selectively target malignant cells and result in fewer side effects than standard chemotherapeutic agents. The drugs comprise two classes of novel targeted cancer agents: (1) monoclonal antibodies that bind to surface antigens present only on tumor cells, not the surrounding cells, and (2) kinase inhibitors that regulate tumor and tumor vessel growth. A recent study found that the annual cost per patient of targeted drugs for cancer typically ranges from $20,000 to $50,000, but may be as low as $13,279 and as high as $100,000.
Coverage and Reimbursement
Cancer treatment in individuals over 70 years of age results in significant out-of-pocket expenditures (OOPE). Langa examined OOPE, including prescription medications and home care services. Cancer-related medications accounted for $1,120 per year in spending and home care services for $250 per year. Low-income individuals spent about 27% of their annual income in these areas, compared with only a 5% annual income expenditure for high-income individuals without cancer. A prior history of Cancer Resulted in an additional $240 OOPE per year. Current cancer treatment was associated with an additional $670 per year, even after controlling for sociodemographics, living situation, functional limitations, comorbid chronic conditions, and insurance coverage. Costs were driven, in part, by inpatient care; those undergoing active cancer treatment were more likely to be hospitalized at least once in the prior 2 years (56% vs 31% for those with no cancer history).
OOPE for insured women with breast cancer who were covered by private, Medicare, or Medicaid health insurance included lost income costs of $1,455 per month, on average. The financial burden of breast cancer was greatest for those with an annual household income < $30,000 and lowest for those with an annual income > $60,000, accounting for a mean of 98% of monthly income in the lowest income group, but only 26% in the highest. The OOPE was $1,687 for women under 65 years old and $627 for older women. The difference in expenditures was mostly attributed to a decrement in income (due to reduced work ability and early retirement) in younger women, accounting for approximately $727 per month.
For a cohort of insured breast, colorectal, prostate, lung, and head and neck cancer patients, McKoy et al estimated costs incurred by those aged less than 65 years as compared to those 65 years and older. Cancer burden was found to be considerable when measured in dollar expenditures per month, with the total cost ranging from $0 to $28,291.67. Mean total OOPE ranged from $0 to $28,291.67 per month. The investigators found no significant differences in actual or adjusted costs relating to hospital bills, medications and herbs/supplements/vitamins across breast cancer or other cancer groups by age.
Reimbursement by Third-Party Payers
Insurance coverage and reimbursement policies for cancer care and related prescription drug coverage vary by type of payer and coverage policy. Working-age individuals may receive insurance through employment-based health insurance, through the purchase of private health insurance, or by seeking assistance from states, local governments, and charities. These types of insurance generally extend coverage for inpatient and outpatient care and may include other benefits/services such as pharmaceuticals, home health care, and rehabilitation. Insurance policies typically require copayments (usually approximately 20% of the approved amount) and annual deductibles.
Coverage and reimbursement policies, whether for medical care or pharmaceuticals, differ by type of drug and whether it is administered in the inpatient hospital setting, the outpatient clinic setting, or the patient's home. Many private insurers and HMO formularies include some of the targeted cancer drugs and will pay for the drugs, provided prior authorization and medical necessity requirements are met. In addition, many pharmaceutical manufacturers provide their own reimbursement programs to make targeted drug therapies affordable for patients.
Cancer insurance, known as a specified disease policy, provides limited benefits, is activated only when the insured is diagnosed with cancer, and may impose increased premium rates with aging.
There are three types of cancer insurance policies: (1) an expense incurred policy, which pays a percentage for expenses listed up to the benefit or policy's maximum dollar limit; (2) an indemnity policy, which pays for all listed benefits up to a set limit; and (3) a first-diagnosis or first-occurrence cancer policy, which pays a lump sum upon the diagnosis of cancer. Preexisting exclusions and waiting periods apply to those purchasing these products. The majority of companies selling cancer policies do so directly to large businesses for payroll deductions and through associations. A few cancer insurance products are offered through direct marketing to individuals, but they are rarely available to Medicare beneficiaries.
Total medical care expenditures for oncology account for 10% of all Medicare expenditures. Medicare Part A covers inpatient cancer care, whereas Part B covers cancer screening services, breast cancer, and many types of chemotherapy and related treatment modalities. Medicare will not pay for certain cancer-related expenses, such as those that are considered experimental or some oral medicines commonly used to treat cancers of the breast and prostate. Medicare supplemental insurance is available privately to help pay for some but not all expenses that are not covered by Medicare. For patients with Medicare Plus Choice, pharmaceutical coverage is provided.
Medicare Part D also provides a drug benefit that covers both cancer pharmaceuticals and noncancer drugs. Most patients are responsible for an annual deductible ($250), and those with prescription expenses more than $2,250 are subject to a coverage gap. When the coverage gap or "donut hole" is reached, the patient is fully responsible for payment for the nondiscounted cost of prescribed drugs. In 2007, this "donut hole" in coverage will end once the patient spends $3,850 in OOPE for covered drugs, deductibles, and copayments. Expenditures for nonformulary and noncovered drugs are excluded from the calculation. After spending $3,850, the patient becomes eligible for catastrophic drug coverage for the remainder of the year.
Reimbursement for Older Patients in Clinical Trials
Older patients are underrepresented in cancer treatment trials. Even though individuals age 65 and older account for 63% of the US population of cancer patients, they account for only 25% of subjects enrolled in clinical trials.[35,36] Bugeja found that 35% of original clinical research papers in the BMJ, Lancet, Thorax, and Gut excluded elderly persons (over age 75), unjustifiably citing family pressure, time constraints, and increased risks as reasons for exclusion. Cost has been another barrier to older patients' participation in trials. Until recently, most insurers did not cover care provided in a clinical trial and Medicare excluded coverage of any costs associated with clinical trial participation, citing such treatment as experimental or investigational.
Since patients often receive routine patient care services (eg, physician visits, hospital stays, clinical laboratory tests, x-rays, etc) whether or not they are participants in clinical trials, Medicare began reimbursing doctors for the routine care costs of clinical trials in 2002. The Centers for Medicare and Medicaid Services (CMS) subsequently revised its National Coverage Determination (NCD) for off-label use in cancer clinical trials in early 2005. Medicare now pays for both routine and nonroutine costs associated with the patient's care, as well as the off-label use of some anticancer drugs.[38,39] Following Medicare's lead, nearly half of all US states and several private insurers now cover the costs of patient care in "qualifying" clinical trials.