The Impact of Utilization Management on Patients and Practices

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Welcome to this ASCO in Action podcast. This is ASCO's podcast series where we explore policy and practice issues that have impact on oncologists, the entire cancer care delivery team, and most importantly the individuals who care for people with cancer.
My name is Clifford Hudis, and I'm the CEO of ASCO, as well as the host of the ASCO in Action podcast series. For today's podcast, I am delighted to have as my guest Dr. Jeffrey Ward. He's the chair of ASCO's Government Relations Committee, and a longtime active member in that area. In addition to his important contributions to ASCO over the years, Dr. Ward is a medical oncologist and a hematologist at the Swedish Cancer Institute in Edmonds, Washington.

Our conversation today will focus on utilization management in cancer care, or the policies that public and private insurers use to control the use of anticancer drug therapies, such as prior authorization requirements, restrictive formularies, step therapy, or fail first requirements, and specialty specific tiers. These are all new and complex topics for some listeners. For others, there's great familiarity. And we're going to explore all of them in the coming discussion.

In September of 2017, ASCO published in the Journal of Oncology Practice a policy statement on the impact of utilization management practices specifically directed at cancer drug therapies. In that statement, ASCO outlined its opposition to payer imposed utilization management policies that restrict patient access to high quality, high value cancer care. The statement also points to high quality clinical pathways as the best first option for ensuring the appropriate utilization of anticancer drugs and the delivery of the highest quality cancer care.

So with that as introduction, Dr. Ward, I'm delighted to welcome you to the podcast, and really looking forward to hearing your thoughts on utilization management. Thank you for being here.

It's a pleasure. Thanks for inviting me.

So to get the conversation started, can you just define first exactly what we mean by the phrase utilization management?
Utilization management is classically when insurers or payers put controls over what care a patient may receive. And in our case, that usually means control of the drug therapies that they're going to get. I think that utilization management more strictly could also include when providers themselves use practices that try to strive for the highest quality care at the best price.

So that already raises the possibility that there are a number of utilization management policies that payers could employ focusing, for example, on the use of specific prescription medications or other interventions. What are some of the more common utilization management practices that are being used specifically in cancer care?

Well, I think the one that we run into every day is specialty care pricing. I was talking to the MedPack folks at Congress just a couple of months ago and began telling them the contortions we go through in a practice, where in my practice, we have seven docs. We have two full-time people who their whole job is to get authorization for drugs, and then to figure out how the people are going to pay for their co-pays that can sometimes be several thousand dollars a month. It's a restriction that I suspect the drug companies actually utilize to try and market their drug by providing co-pay support.

At the same time, I think payers build it into the pricing of their insurance. So it's become a big part of what happens. And it's almost a dance between practices and payers. But it takes a tremendous amount of time and effort. And I'm not sure that it accomplishes a whole lot.

Wow. I mean, I think there's a lot that we could unpack there. And I think for some of our listeners, it would help to frame this in even more realistic terms. We shouldn't use specific drugs or drug names. But I'm curious if you could provide a more concrete example of what exactly would happen to Mr. Smith in your office when you make a recommendation for a treatment, and what then ensues in terms of this specialty tier pricing.

Sure. So Mr. Smith has prostate cancer. And he is appropriately treated with a very expensive oral medication along with his castrate therapy. And in doing so, I write a prescription. I send that prescription to a specialty pharmacy.

They then begin doing a preauthorization process, or that preauthorization process may be done from the doctor's own office. They get preauthorization for the drug, but they find out that the patient has a 20% co-pay. This drug may cost $12,000 a year, and so the patient is now responsible for the other 20% of that cost.
If it is a commercial payer, then the patient will-- then the specialty pharmacy will go to the drug company, and the drug company will provide co-pay support. That requires often the patient to give them a copy of their last tax return, and there will be some other requirements to show that they don't have the ability to easily pay for that co-pay.

If that kind of process wasn't in place, the patient would probably in many circumstances deny the treatment and not get the best care that they deserve.

If it's a Medicare patient, then the drug company directly providing co-pay support is called fraud. And so in that circumstance, the pharmacy will then-- or the practice will turn to foundations that help provide co-pay support, and try and get the patient foundation support. You're better apt to do that in January or this time of year in March than you are in November, December, because foundations tend to run out of money.

So you run around scrounging up foundation support for your patient until you're able to do it. That puts delays that can sometimes last weeks before you can initiate a treatment.
And not to put too fine a point on it, but in this example, you recommended a specific therapy, and ultimately the patient getting it, the delay is really in scrounging up or managing the co-pay through these various channels. Is that a fair assessment of what you've described? Or did I miss something?
That's exactly right. And so the patient will almost always get the drug, but there can be considerable delays.

OK. And so that answers, in a sense, the next question, that the concern about the overall impact of this kind of approach on individual patients is a delay in terms of needed therapies. And sometimes that might be a critically important one, but other times it might be honestly less critical.

But it's also a lot of work. And there's a lot of expense on the side of the practice in navigating this. Is that also a fair assessment?
Yes. And none of that is, of course, reimbursed. It's become an expected part of practice, but it is a burden on practices.
OK. And just out of curiosity, what do you think the alternative would be? Since all of this seems to boil down to the fact that there is co-pay, and there are multiple ways of mitigating the impact of co-pay on the actual individual patient. What would the alternative to this actually be?

Well, I think in a perfect world, the alternative would be that the patient would not have the co-pay, and the drug companies would admit that they're actually lowering their price significantly when they provide co-pay support. And patients would pay less. And we wouldn't have to go through the dance now. That seems, at this point in time, unrealistic. But I think that right now, the payers really have this locked into their cost of their insurance. So it is a dance that's expected. If there was a way to get rid of that, that would be great. One suggestion that has been made is that part D drugs that are cancer drugs actually get moved to part B, and that they get paid for that way for Medicare patients. And then the co-pay issue with part D drugs goes away for the Medicare patients. And then maybe some policy might follow on the commercial side. Maybe not, right?

Yeah. That may follow. But the commercial side is a little bit easier, because the commercial side, you can get direct support from the pharmaceutical company for their co-pay. And you can't do that for Medicare patients.

OK. So let's-- forgive the pun-- take the next step and talk about step therapy. As I understand it right now, the White House and Congress, along with ASCO and other stakeholders, we are all working-- and I think it's true at this point in a fairly collaborative way to try to talk about and start to address the high cost of prescription drugs here in the US.

One part of these efforts from CMS has been to propose expanded use of step therapy. Can you describe what step therapy would look like for a patient with cancer?

Sure. I think that some of us prefer the word fail first to step therapy, because that's more descriptive of what it is. Step therapy is the idea that before you can get drug B, you have to use and fail drug A. Most step therapy is based on price of the drug. And we don't think that that applies very well to cancer patients.

Most of our patients, there is a best drug for them. And to have to use inferior drugs to get to the best drug is problematic, not just in time and delays, but we know that our disease evolves over time. And if you use an inferior drug first, the superior drug may not work nearly so well as a second line therapy.

So in an ideal situation, hypothetically, were there two drugs that on average offered the same response rate, progression free survival, overall survival, and similar toxicities where one costs less than the other, this approach might make sense, assuming there weren't mitigating factors at the individual patient level. And it's fair to point out, I think, that in other domains outside of oncology, classically blood pressure management, step therapy has been accepted and is reasonably successful.

If I'm hearing you right though, the problem we see in oncology is that kind of ideal equivalence is rare. And most of the time there really are reasons, good reasons, defensible evidence-based reasons, that oncologists select one treatment or another. Is that a fair summary?

Yes, I think it is. An example where someone I think might inappropriately use step therapy would be in renal cell cancer, where we have a number of TKIs that are available. Someone may say that they all have similar response rates. Of course, none of them have been compared head to head. And so that makes it very difficult to say whether they're really the same or not.
But they do have different toxicities. And so even if you would say on average their toxicities are similar, for a given patient, one drug may be better tolerated or more appropriate than another. To use those drugs in a step therapy fashion would be inappropriate, and I think would harm patients.

There are circumstances where I think step therapy is easy to apply in oncology, but they are few and far between. One example where step therapy I think will be applied-- and I wouldn't have problems with it-- is in the biosimilar products.

And my understanding then is that the Medicare Advantage, at least, some of the plans began allowing step therapy just at the beginning of this year, 2019. Have you begun to see or hear about any impact on patients yet as a result of that or is it still too early?
I have seen payers doing some step therapy in, for example, the biosimilar realm, or even requiring you to use a filgrastim instead of pegfilgrastim. But I have not yet seen the part D payers using step therapy. I don't know whether ASCO and its state affiliate counsel has begun gathering examples across the country otherwise.
The filgrastim-pegfilgrastim issue that you just mentioned, I think, is a good one for highlighting some of the subtle challenges here. It's probably fair to say that the impact on hard measures, like infection or admission to the hospital, will be indistinguishable.
But in one case there are multiple either office visits or health care professional interactions or a burden on the part of the family members or patient for regular administration, whereas with the other choice, of course, there's one dose per cycle. So the price, if you will, of that convenience, I think, is another issue that will eventually bubble to the surface. Right?

Yes. And the ironic thing about that step therapy is that if a patient decides that they want to self-administer the drug at home, they have to pay co-pays for the privilege of giving themselves a shot.
Right. Well, we could probably fill the whole podcast with perverse incentives and bizarre quirks of the system, I'm sure, in terms of drug administration, right?

I think that that's one of our problems.

So look, we've identified these challenges. Of course, our job here is both to highlight them so that our members and listeners are aware, but even more importantly is to do something about that. So can you start to describe how ASCO is working with Congress and the administration to address some of these issues to encourage policies that would be better for people with cancer?

Well, I think one of the first things that we've done is we've collaborated with our state affiliate societies in individual states where there has been legislation regarding some of these utilization management activities that don't make a lot of sense. There are a number of bills last year in just step therapy itself. In a number of states, I think there were a total of about 90-some odd bills that addressed some kind of utilization management in different states across the country last year.

We have a similar bill that's in the legislature here in Washington state right now that is looking at step therapies, and to put some curbs on it, and more particularly, to make the processes transparent so that when you do have a step therapy in place, you know it. You understand it. And you know what literature has been used so that you have an ability to appeal it if it's appropriate for your patient. So those kind of processes ASCO is facilitating.
The big picture, I think, is that we need to somehow develop a reimbursement system that actually incentivizes oncologists and payers to work together instead of being at odds over this. And that would involve developing pathways that are value based, but in our mind, very distinct from step therapy.

Well, I mean, that's a natural segue to the next topic, which is, in fact, ASCO's 2017 policy statement, which addressed utilization management, and pointed to high quality clinical pathways as payers best first option for ensuring appropriate utilization of anticancer drugs. Can you talk a little bit about why we at ASCO have turned to focus on that as the tool to drive the delivery of high quality care?

Well, I think there are several reasons. One, we've staked out a position that we believe that as oncologists we should be responsible for the way we use drugs, and the management of our patients' care, and that part of that responsibility should be to be cognizant of the cost and the value of the drugs we give.

But we don't believe that we should be responsible for the prices that those drugs carry. A system that we have right now in buy and bill makes us responsible for that. And many of the reimbursement reforms that have been done, the oncology care model being one of them, for example, actually makes oncologists responsible for the cost of the drugs in the reimbursement scheme. We think that that is a mistake, and that there are better ways to try and leverage the cost of drugs than making us responsible for them.

Right. I mean, one of the things we say is that we don't set the launch price, and we're not responsible for it. But in these models, it can be the case that expensive new drugs that drive up the cost of care even when they do deliver better outcomes and are the right therapy can become a financial liability for the prescriber, right? And that's a real challenge, I think, for us.

Correct. I mean, I was a lead author on a paper that we published a year or so ago in the Journal of Oncology Practice that used a model to demonstrate what the risks of taking on responsibility for the cost of drugs in a model like OCM would be. And in doing so determined that if you were a small practice of less than 10 doctors, there was a 10% risk that you could have a 30% deficit in your drug costs just on the basis of who happened to walk in your door.
The end result would be that if you were in that kind of arrangement and taking on risk for the cost of your drugs, whether you were successful or not would depend less on the skill and the choices you made, but on who walked in your front door.
Yeah. And that's a real problem, because we certainly don't want a system where there's an incentive and disincentive to select or select against certain sick patients, obviously.

So I guess the one question that some people may ask as they think about this is whether there are any situations where the utilization management policies we're seeing now do provide a benefit. That is, are there patients or outcomes that are improved because of the current utilization management tools? Are there places where costs are controlled or there's more effective management of resources in general? Meaning, are there any silver linings in this right now?
I think that for individual payers, particularly large payers, there may be a silver lining that we don't see. So I'm guessing as to whether this exists or not. Many of them, I believe, get rebates, often volume rebates, based on step therapy. Whether that actually computes into lower premiums for patients or not or simply higher profits for the insurer, that would be well out of my realm of knowledge.

But I think that there is some leverage. I think there'd be a better way to develop leverage. And that would be if we were using routinely value-based pathways and partnering with insurers to be able to put downward price on drug-- downward pressure on drug prices.

Right. So alignment of incentives is what you're describing at the end there. And I think that's ultimately the best solution for many of the problems that plague us in the health care system.
With that, I want to thank you, Dr. Ward, once again for joining me on this ASCO in Action podcast. It was a real delight to hear your thoughts, and to gain a little bit of deeper knowledge. Thanks for doing that.

You're great. It was fun to be here.

For listeners who want more information on utilization management policies and the latest cancer policy news and updates, visit ASCO in Action, which is literally ascoaction.asco.org on the web. And otherwise, until next time, thank you for listening to this ASCO in Action podcast.