Oncology Care in 2021: The FDA, Medicare, and Healthcare Reform

March 29, 2011
Oncology, ONCOLOGY Vol 25 No 6, Volume 25, Issue 6

At the Association for Community Cancer Centers annual national meeting in Washington, DC this past March, the session on “Oncology Care in 2021” featured three panelists with significant experience in shaping healthcare policy.

At the Association for Community Cancer Centers annual national meeting in Washington, DC this past March, the session on “Oncology Care in 2021” featured three panelists with significant experience in shaping healthcare policy. On the panel were Scott Gottlieb from the American Enterprise Institute; Tom Gustafson, senior policy advisor at Arnold & Porter, LLP; and Daniel Johnson, visiting fellow in health policy at the Heritage Foundation. The three shared their thoughts on the issues in oncology care that will affect how oncologists treat patients in ten years' time. The discussion focused primarily on FDA regulation of the products oncologists use, Medicare payment, and delivery system reforms.


Scott Gottlieb, MD
Resident Fellow

American Enterprise Institute

FDA Regulation-Now and in 2021

What are the main issues in FDA regulation that will affect how regulation looks in 2021?

Gottlieb cited three major factors: regulatory science, costs, and the organizational challenges that exist in the FDA. He stated that the FDA is moving more slowly and may continue to move slowly in the area of “approval for drug diagnostic combinations.” He also said that we will see a move toward trying to validate diagnostic tests in a way that's similar to how drugs are validated. He cited cost as another issue that will become increasingly important, saying “I don't think there will be anything in the regulatory process that will explicitly consider costs; this is a big debate that's going on in Europe right now…but I do think that cost is influencing the review process in two places. One, there's a sentiment in the agency that because these drugs are so high-priced and the returns are so lucrative in many cases, it justifies the requests that the agency makes for higher and higher data requirements. Two, I think you're seeing explicit considerations of costs in the advisory committees in terms of what they will ask manufacturers to do.” The final obstacle that Gottlieb cited for the FDA relates to its organization. He described the FDA review process as being “fragmented” and said that, as the institution has grown, the review process has become detrimentally compartmentalized.

Does the current FDA regulatory process promote innovation?

Johnson stated that while many criticize the FDA for being slow to approve drugs, he believes that caution and patience are important, saying “When you get to be my age, you see a lot of disasters from moving too fast on things. I'm not opposed to innovation, but caution is important.” Johnston admitted that the process needs to be streamlined, but thinks that it needs to be appropriate and primarily directed at patient safety.

Is the FDA equipped to handle the scrutiny of the new biological-based therapies that are emerging?

Gottlieb fielded this question, saying “I think the FDA is well staffed, but I think they do grapple with new areas of technology-that was certainly the case with the introduction of pharmacogenomics into drug labeling. I think you're starting to see that play out right now again with drug diagnostic combinations, where the practice community is certainly ahead of where the FDA is in terms of its regulatory comfort.” Gottlieb went on to say that the FDA possesses much expertise and a good ability to retain that expertise, but that in new areas of technology it's necessary to hand-recruit people on an ongoing basis and the FDA just doesn't have the resources to do this.

Medicare-Now and in 2021

Is CMS (Centers for Medicare & Medicaid Services) set up in a way that will enable it to optimize patient care with regard to on-label and off-label drugs?


Thomas A. Gustafson, PhD
Senior Policy Advisor

Arnold & Porter LLP

Gustafson said, “It's important to recognize that CMS's orientation is not in favor of or against new technology or the introduction of new uses for drugs; they are interested in facilitating access to high-quality care for their beneficiaries.” He stated that everything else is a tool that can be used, but is not their primary interest, and that oncology seems to be well regulated, compared to other areas of medicine, because of the NCCN compendia.

Gottlieb agreed with Gustafson on this point but said “The threat that I see long-term is that I think the government agencies, as they try to control their own budgets, will want to get more control over the use of off-label oncology products. I see CMS starting to try to distance itself from the compendia process and from the expectation that it will reimburse things that get listed with substantial evidence in the compendia…That's what I see as the biggest threat to the field of oncology right now.”

From a Medicare payment standpoint, what are the big issues that we need to be looking at-what will present the biggest challenges in the future?

Gustafson said “Well, in a nutshell, we're running out of money and that ought to scare us all. As a nation we have no plan for dealing with that problem. What I'm talking about is the exhaustion of the Medicare party trust fund; that's only part of the funding for Medicare but that's indicative-it will be gone by 2029. This is an issue that I've heard senior people say is critical, but it also isn't clear what we're going to do.” He went on to state that the 2029 number is based on current law, and having the Sustainable Growth Rate (SGR) and the Independent Payment Advisory Board (IPAB) go into place, saying “This prediction takes the health reform law and its underlying law seriously.” Gustafson went on to add “But every serious party I know looks at that situation and says ‘There's no way we can do a 30% cut in physician payment next January 1st,' but if Congress does something to remedy the SGR either on a short-term or long-term basis, if Congress repeals the IPAB, that is going to make the problem worse.” He also cited the aging population as being an important driving factor for costs. Gustafson suggests that the solution to the costs problem is three-fold-there would need to be a transfer of part of the responsibility for paying to the beneficiaries themselves; there must be an increase in income from some source (eg, taxes); and the entire system needs to be made more efficient.


Daniel H. Johnson, Jr, MD
Visiting Fellow

The Heritage Foundation

Johnson added that he believes the problem is that the system insulates the person from the cost, saying “I think it's very important to maintain a focus on the overall picture: the fundamental problem is the cost, and the fundamental reason for this is that the person receiving the services is insulated from the cost of the services. How can you fix that without addressing the fundamental problem?”

Gottlieb pointed out that while Medicare is treated as a comprehensive benefits package in Washington, in fact it “pays for nothing. There's a big list of benefits that Medicare patients can get, but in truth, they can't get access to anything because it pays so little, no doctors take it, and you see in the literature more and more evidence that Medicare patients have worse outcomes compared to every other group of patients. The product itself is an indicative predictor of poor outcomes, even after you control for the other factors, especially in oncology.”

Healthcare Reform-Now and in 2021

Please address the issue of the Independent Payment Advisory Board.

Gottlieb believes that healthcare reform will have two major outcomes: one will be explicit price controls on certain technologies, the other will be that CMS will be more active in arbitrating clinical decisions, (ie, what can and can't be reimbursed). He stated that “IPAB as a construct gives the agency the authority to do both of these things. So the IPAB effectively caps the rate of growth in Medicare. IPAB has to come up with a set of proposals that keep Medicare growth in line with the overall inflation rate of the economy, and they bring it to Congress and Congress has thirty days to accept the proposals or come up with a competing set of proposals to bring Medicare growth down by the same amount.” Ultimately he believes that IPAB will do three things: take down existing price schedules; import price schedules that might exist in one part of the market into new parts of the market; and confer authority on CMS to inject its own clinical reasoning into what it pays for.

Ten years from now, will the system be able to sustain cancer therapies that cost $80K a year and that yield weeks or months of survival?

Gottlieb: “I think we'll be spending a large proportion of our GDP on healthcare in ten years.”

Gustafson: “Yes, we will be able to sustain some of the kinds of care that you describe, but there will be a lot of scrutiny and a lot of friction surrounding that-it won't be easy.”

Johnson: “The nature of cancer care in this country ten years from now is going to be determined by the people in this room and the patients that you serve. You and your patients together will decide where the value is, and if you're smart, you will work towards bringing the value to your patients over time in a system that involves the patient as a partner, not only in the treatment but in the payment for services and the way and the place in which they're delivered.”