The United States has long had the highest prescription drug prices in the world — and that includes drugs used to treat cancer. These high prices lead to more spending on cancer drugs, and higher co-payments and deductibles for patients with cancer. The problem has been with us for a long time; almost two decades ago, one of us (Mark) coined the phrase “financial toxicity” to describe one of the most common side effects of cancer treatment. Since then, the problem has only gotten worse.
In 2022, in an attempt to lower the prices being paid for brand-name drugs, Congress passed a law requiring the Centers for Medicare & Medicaid Services to “negotiate maximum prices for brand-name drugs that do not have other generic equivalents and that account for the greatest Medicare spending.”
In the first two rounds of the Medicare Drug Price Negotiation Program (MDPNP), CMS secured discounted prices for 25 drugs. Five of these drugs were for the treatment of cancer. On average, CMS was able to negotiate a discount of 47% (range: 38% – 60%) for these oncology drugs, relative to the pre-negotiation reported “Wholesale Acquisition Cost” (WAC). The discount amounted to annual savings of $5.5 billion (authors’ calculations using figures reported by CMS).
The most recent list of drugs subject to the MDPNP was announced five weeks ago, and includes four additional oncology drugs: Erleada, Kisqali, Lenvima, and Verzenio.
If CMS can achieve the same level of average savings it did previously, we estimate an additional $2.8 billion in annual savings for taxpayers.
15 new drugs added to Medicare price negotiations
But when CMS is done negotiating pricing through the MDPNP, there is a second arrow in CMS’ quiver that it can use to lower drug spending even further. Federal law requires CMS to limit coverage to items and services that are “reasonable and necessary.” It also requires CMS to cover all antineoplastic (anticancer) drugs through Medicare Part D.
Neither of these provisions requires CMS to pay for excessive doses of cancer drugs — which is what it is doing right now.
As far as we can tell, CMS considers all FDA-approved oncology drugs to be reasonable and necessary — but the FDA only evaluates whether a drug is “safe and effective.” What is “safe and effective” is often not “reasonable and necessary,” let alone optimal.
The FDA expects anticancer drugs to have significant toxicity and has long approved most anticancer drugs at what oncologists call the maximum tolerated dose (MTD). The MTD almost always results in material side effects (e.g., moderate diarrhea with six bowel movements per day, moderate oral pain, or ulcers that require dietary modification).
These side effects might be worth it if the MTD were required for the drug to be maximally effective. But for many anticancer drugs, lower doses have the same therapeutic benefit but fewer side effects. Lower doses also mean lower spending — both for the patient (who is responsible for co-pays) and CMS.
CMS could benefit patients and taxpayers by only paying for dosages that are reasonable and necessary, as the Medicare statute specifically requires. There is also ample support for this approach in the Medicare Program Integrity Manual, which states that for a drug to be “reasonable and necessary,” it must meet but not exceed a patient’s “medical need.” Excessive dosing clearly does not satisfy this requirement, since it exceeds such a need.
We are directors of the Optimal Cancer Care Alliance, whose goal is to ensure that patients receive optimal doses of oncology drugs. In many instances the dosage recommended by the manufacturer, and considered “safe” by the FDA, far exceeds the optimal dose. The side effects of cancer treatment can have an immense impact on a patient’s quality of life. Sometimes, fear of treatment exceeds fear of the disease, and patients may discontinue treatment due to recurrent unacceptable side effects. Side effects from cancer treatment may also significantly increase the overall cost of cancer care. Even if the oncology drug is (relatively) inexpensive, reducing excessive dosing can lower spending if severe toxicity is avoided.
For chemotherapy, there has long been a general belief that “more is better,” since the goal is to poison the cancer. But modern oncology drugs are often developed to inhibit one or more specific drug targets. For these agents, more is often not better. This approach was explicitly acknowledged by the FDA in 2021 and was formalized as Project Optimus.
The recently announced set of drugs for price negotiation includes Kisqali, which was approved by FDA in 2017 at a dose of 600 mg daily for advanced breast cancer. However, the FDA noted in its approval letter that the sponsor (Novartis) was required to evaluate the efficacy and safety of an alternative dosing regimen, due to safety concerns about the approved dosage. That study, comparing 600 mg and 400 mg daily, was recently published, and demonstrated that the most important endpoints (survival and progression-free survival) were virtually identical, and that the lower dose (unsurprisingly) was less toxic.
Cancer patients shouldn’t be responsible for out-of-pocket costs
However, because the FDA and Novartis had agreed in 2017 to focus on changes in tumor size as the primary endpoint, the results were deemed “to support continued use of 600 mg as the initial dose” with tapered lowering of the dose as appropriate to address side effects.
But the FDA’s decision does not preclude CMS from determining that the higher dose is not reasonable and necessary — consistent with an editorial published with the primary study. If CMS decided it would cover only the lower dose, it would save one-third of the total cost on top of whatever savings are obtained from price negotiation.
Kisqali is not unique. One of us (Mark) recently published a paper about a compendium of alternative dosage strategies for 90 patent-protected oral oncology drugs, including all nine of the oncology drugs included in the MDPNP. Based on the best available evidence, our recent paper and compendium suggest alternative dosage strategies for five of these nine drugs, with potential median cost savings of 50% (range: 33%-75%).
Policymakers, payers, prescribers, and patients should recognize that the FDA-approved recommended dose may not be optimal. Lower dosages of oncology drugs, when supported by high quality clinical data, could have a major impact on the quality of life of patients undergoing treatment without any detrimental effect on survival — while also reducing costs for patients and taxpayers.
To consider these issues, we have convened a meeting, Novel Solutions to Address the Rising Cost of Oncology Drugs: Targeting the Demand Side, on March 4-5 at Georgetown Law in Washington to further discuss this strategy. The meeting is open to the public and we hope a wide range of people will join us. The conference is funded by Georgetown Law as well as by a grant from Arnold Ventures to the University of Chicago.
Given the unsustainable increases in this country’s health care costs, it is critical that legislators, regulators, payers, prescribers, and patients consider opportunities to reduce health care spending beyond simple price negotiations or controls. Excessive prescribing of toxic, expensive oncology drugs needs to be on everyone’s radar as a preventable hazard to both patients and taxpayers.
Mark Ratain is the Leon O. Jacobson professor of medicine and director of the Center of Personalized Therapeutics at the University of Chicago and chairman of the Board of the Optimal Cancer Care Alliance. David Hyman is the Scott K. Ginsburg professor of health law & policy at Georgetown Law and treasurer of the Optimal Cancer Care Alliance.
