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Express Scripts pushes for pay-for-performance in cancer

States it is the only way to fund the growing cost of cancer care

UK Life Sciences Strategy - one year on 

Express Scripts has indicated it wants pharma companies selling certain cancer drugs to only be paid for their medicines if they provide a benefit to patients.

The pharmacy benefit manager (PBM) sees so-called pay-for-performance deals as the only way to fund the escalating cost of cancer care in the face of a stream of new drugs costing in excess of $100,000 a year, according to a Wall Street Journal report. 

Paying drugmakers for outcomes rather than products is gaining traction around the world, with examples in Europe of companies agreeing P4P and risk-sharing deals with health technology assessment agencies, but the US's free-market approach to healthcare has meant it has lagged behind.

Now, insurers and PBMs have started to get on board with the concept, with Express Scripts' chief medical officer Steve Miller telling the WSJ it wants to sign deals with companies selling cancer drugs to introduce differentiated pricing, depending on how well they work against different tumour types.

He gives the example of Roche and Astellas' Tarceva (erlotinib), which is less effective in pancreatic cancer than in lung cancer. There are practical considerations to consider, however, such as the costs associated with monitoring outcomes and ensuring that the price paid matches the intended use of the drug.

The move would mark a departure from Express Scripts' earlier approach to curbing costs, which have focused on preferential formulary positions in return for discounts and is most evidence on recent deals involving new hepatitis C virus (HCV) drugs, another group with hefty annual price tags.

The PBM has published an analysis of prescription cancer drug use and costs ahead of the start of the American Society of Clinical Oncology (ASCO) meeting later this week. 

Cancer drugs made up a third of the medication costs among patients whose total 2014 annual medication spending reached or exceeded $100,000 under the pharmacy benefit, and were the third-largest contributor to 2014 specialty medication spending, with spending rising 20% year-on-year.

With nine new targeted cancer therapies approved by the FDA last year, cancer drugs "will maintain their lead position as a major contributor to drug spending," says Express Scripts, although some relief will come from FDA approval of biosimilars, particularly for Novartis' Gleevec (imatinib) which could occur next year.

The global spend on oncology medicines jumped from $75bn to $100bn in just five years, according to IMS data, with targeted cancer therapies accounting for almost half of total spending last year.

Article by
Phil Taylor

28th May 2015

From: Sales

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