It's the Volume Stupid..and the Rebates

  • by: Robert Goldberg |
  • 06/02/2016
An IMS report on Oncology Drug trends was released today. 

I guess it was too much to ask for the media to actually read the full report or report on the full report.  It's easier to feed into the drug spending is unsustainable and creates financial toxicity narrative..  Meg Tirrell came closest to getting it right, noting that most of the increase was due to more people taking new medicines for longer.  

The report breaks it down thusly
  • Over the past five years, the cost of oncology medicines in the U.S. increased by $15.9 billion, or 72% over the 2010 level. Over $9 billion of total growth came from the adoption of new therapies introduced since 2010 and a similar amount is due to increased volume and price of existing branded drugs.
  • Greater use of older brands – due to increasing numbers of patients receiving treatment as well as lengthening treatment durations – led to $9.3Bn in cost growth in the past five years.
Payers are also noticing the impact on drug budgets of longer treatment duration and increased numbers of patients receiving treatment.

What Meg didn't mention and should have because she brought up financial toxicity is that cost sharing for cancer drugs is that insurance imposed cost sharing soared by 30 times more than prices net of rebates..  I just compared the out of pocket data from the IMS report on Developments in Cancer Treatments, Market Dynamics, Patient Access and Value from May 2015 (page 35) with data in the report the media is writing about. 

And rebates remain about 40 percent of the total increase in cancer drug spending.  None of that money directly goes to cancer patients.  At the same time, drug companies are helping patients with out of pocket costs. 

Meg alluded to it.  Most other reporters didn't.

Rebates up.  Cost sharing up.   Someone is making a lot of money and sticking it to patients.  

Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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