Study Finds Higher Utilization of Expensive Chemo Drugs Since 2005

In 2005 CMS implemented their new chemotherapy drug reimbursement rules based on Average Sales Price rather than the previous method using Average Wholesale Price, reducing reimbursement from a 1.22 to a 1.06 payment-to-cost ratio, as we are all well aware.  American Medical News is reporting results of a recent study of chemotherapy treatments lung cancer patients received post CMS rule implementation.

The study found that the numbers of patients who were treated with chemotherapy actually went up since that payout change.  However, the use of drugs that maintained higher payouts increased while usage of drugs with lower reimbursement decreased.  Two of the study authors, Joseph P. Newhouse, who is an economist and health policy professor at Harvard University in Massachusetts and Mireille Jacobson, who is a senior health economist at RAND Corporation in Santa Monica, CA, provided their conclusions based on the results they found.  Newhouse commented that, "It looks like the oncologists substituted toward the agents whose prices had fallen the least."  Jacobson cautioned, “lawmakers should consider such behavioral responses to payment cuts before they consider implementing more of them. ‘Changing prices alone is just one piece of the puzzle.’  She goes on to say, "We're not suggesting that physicians only take into account payments when they make clinical decisions."

Indeed, Allen Lichter, MD, CEO of ASCO, questions the validity of the authors’ conclusions based on a relatively low (2%) increase in overall chemotherapy usage in lung cancer patients.  He identified numerous considerations an oncologist must make when choosing an appropriate chemotherapeutic agent, pointing out, "It's naïve to think the actual cost of the drug is the only factor."

It appears more research must be done before CMS decides to make another sweeping reimbursement change.  Lawmakers would do well to take their time on this issue.