One big message from the first experiments with cancer pathways: they’re making it easier to predict therapy winners and losers. That emerged loud and clear from Real Endpoints’s March 20th webinar exploring cancer pathways. (If you missed the live event, you can access a free archived version by clicking on this link.)
In the new pathways world “we’d have no choice but to cover” a new drug that’s very expensive but improves overall survival, noted Lee Newcomer, UnitedHealthcare’s senior vice president of Oncology, Genetics and Women’s Health. But in doing so, United will also “jettison” those therapies that don’t clear that efficacy bar. And it’s going to so do quickly: Newcomer predicted that insurers like United will jettison poorly-performing drugs to find space in the formulary for new therapies “in as little as three to five years.”
The winners, then (surprise surprise) are the more efficacious drugs.
“If you are less efficacious you don’t have a strategy,” Newcomer emphasized bluntly.
Meanwhile, “for products that are ‘as good’” says Newcomer, “it comes down to price.” Indeed, in a world where cancer pathways dominate, a late market entrant either has the out-of-the-park efficacy to vault to first-in-class or must find another means of driving wide adoption. The only means of doing so in Newcomer’s opinion is by lowering a drug’s price tag to save the payer –and the healthcare system—money. (So much for risk-sharing.)
Still, as we’ve said before, the cost-savings associated with cancer pathways near term are likely to be modest. But focusing exclusively on the cost-savings misses the larger point. As the webinar also concluded, pathways are a necessary first step to experimenting with other kinds of reforms, including bundled payment schemes, patient centered oncology medical homes, and oncology accountable care organizations. And given how rapidly oncology costs are rising, payers can’t afford not to take that step.
“We expect to hold the line on costs and possibly save a little money,” said Ira Klein, who directs Aetna’s oncology strategy, which includes a rapid expansion of pathway programs into new US geographies in 2012. And that’s okay since keeping 2012 oncology costs to 2011 dollar levels actually represents a year-over-year savings of around 15% given historic oncology spend trend lines. Importantly, says Klein, those savings provide a budgetary buffer that enables Aetna to cover new drugs and technologies coming to market. “New drugs will take up space [in the budget]. We have to create room in the pocketbook to cover technology,” he said.
For biopharmas counting on oncology for sustained revenue growth, the messages from Newcomer and others are a bitter pill. But swallow it they must. Developing a winning oncology drug has never been easy scientifically; in a pathway-dominated world there may be fewer winners still.
Image courtesy of flickrer madamepsychosis via creative commons.