HemOnc Today's PharmAnalysis
HemOnc Today's PharmAnalysis
Disclosures: Lyman reports consultant/advisory roles with Agendia, Amgen, Genomic Health, Halozyme, Mylan, Partners Healthcare, Pfizer, Samsung Bioepis and Spectrum Pharmaceuticals. Mariotto, Yabroff and Zafar report no relevant financial disclosures.
November 10, 2020
13 min read

Strategies aim to ensure cancer care for Americans ‘without financial ruin’

Disclosures: Lyman reports consultant/advisory roles with Agendia, Amgen, Genomic Health, Halozyme, Mylan, Partners Healthcare, Pfizer, Samsung Bioepis and Spectrum Pharmaceuticals. Mariotto, Yabroff and Zafar report no relevant financial disclosures.
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The cost of cancer care in the U.S. continues to rise as debate persists about how to best bring down drug prices while ensuring sufficient health care coverage.

Over the last 2 decades, the advent of targeted therapies, checkpoint inhibitors and chimeric antigen receptor T-cell therapy, among others, has represented great progress in treatment of many cancer types.

Drug prices are not the only source of high cancer costs, according to Gary H. Lyman, MD, MPH, FASCO, FRCP (Edin).
Drug prices are not the only source of high cancer costs, according to Gary H. Lyman, MD, MPH, FASCO, FRCP (Edin). “Hospitalizations, scans, MRIs, emergency room visits, drug prices … these are all the things that go into the health care costs,” he said.
Source: Fred Hutchinson.

However, that progress has come at a price, with the cost of cancer care in the U.S. projected to increase by over 30% by 2030.

Experts said that, unlike some other developed countries around the world, the U.S. has failed to maintain costs and expand coverage for all patients, leading to what is now a health care crisis.

“We all want better and longer lives, but there is a price tag that comes with that,” Gary H. Lyman, MD, MPH, FASCO, FRCP (Edin), senior lead in health care quality and policy at Hutchinson Institute for Cancer Outcomes Research, professor in the cancer prevention program and clinical research division at Fred Hutchinson Institute for Cancer Outcomes Research, and professor of medicine/medical oncology at University of Washington School of Medicine, told HemOnc Today. “If it were only about containing costs, there wouldn’t be new medicines or hospitals. We want to keep improving and getting better. The problem is that it comes with a cost.”

HemOnc Today spoke with experts about the continued problem of rising health care costs in the United States, what strategies may help reduce these costs, and future directions the country make take to help all patients get the care they need.

Scope of the problem

The NIH projected the national cost of cancer care this year would reach $157 billion in 2010 dollars.

This projection reflects an increase of 27% from 2010, driven by increases in costs of care and a growing number of cancer survivors.

There are currently 18.1 million cancer survivors in the United States, which is 30% more than in 2010, according to the NCI.

Moreover, Ekwueme and colleagues evaluated data from the 2011 to 2016 Medical Expenditure Panel Survey and found survivors aged 18 to 64 years had higher average annual out-of-pocket expenses ($1,000 vs. $622; P < .001) and a higher out-of-pocket burden (> 20% of annual family income, 1.9% vs. 1%; P < .001) than people without a cancer history.

About 25% of survivors reported material hardship and 34.3% reported psychological hardship.

With the number of cancer survivors and patients only expected to increase, researchers projected national cancer-attributable costs will increase by more 30% to a total of $246 billion by the year 2030, according to results of a study published in July in Cancer Epidemiology, Biomarkers & Prevention.

“Our projections of the total costs of cancer care are substantial,” Angela Mariotto, PhD, study researcher and chief of the data analytics branch at NCI, told HemOnc Today. “The number of people diagnosed with cancer increases with age, and an aging population means that the number of cancer survivors will increase, which is accompanied by significant cost.”

Angela Mariotto, PhD
Angela Mariotto

Mariotto and colleagues analyzed the NCI’s SEER registry data linked to Medicare enrollment and claims data and identified patients aged 65 years or older diagnosed with cancer between 2000 and 2012. Researchers estimated costs by cancer site, cancer stage at diagnosis and phase of care, which included the initial phase, defined as the first 12 months following a cancer diagnosis; the end-of-life phase, or the 12 months before death among those who died; and the continuing phase, which included the months between the initial and end-of-life phases.

Results showed annualized average medical care costs for patients in the end-of-life phase to be $105,500 per patient, the highest of any group. Patients in the end-of-life phase also had the highest cancer-attributable annualized average oral prescription drugs costs, at $4,200 per patient.

“Higher annualized costs at the end-of-life phase indicates that patients initially diagnosed with more advanced stage received more intensive treatment, either given with curative intent or with a palliative focus,” Mariotto said. “Costs at the end of life also were higher for poor-prognosis cancers. Future research to identify the value of specific cancer treatments in relation to expected survival and quality-of-life benefits, along with risk for adverse events and costs of care, will be important.”

Patients in the initial phase had $41,800 in cancer-attributable annualized average medical costs and $1,800 in prescription drug costs, whereas those in the continuing phase had $5,300 in average medical costs and $1,100 in prescription drug costs. Within each phase, medical costs were highest for patients diagnosed with distant-stage disease.

Costs varied by cancer site and by malignancy, with annualized cancer-attributable medical costs ranging from $71,300 for men with prostate cancer to $239,400 for patients with acute myeloid leukemia.

“We found that the costs in the end-of-life phase of care were higher than those in the initial phase of care, and costs were highest among those initially diagnosed with advanced disease,” Robin Yabroff, PhD, MBA, study researcher and senior scientific director of health services research at American Cancer Society, told HemOnc Today. “These results suggest that further research is needed to better understand the value and appropriateness of treatment intensity, especially among patients with advanced disease.

Robin Yabroff, PhD, MBA
Robin Yabroff

“As treatments improve, costs of cancer care depend on a different number of factors, including the cost of the new treatments compared with current standards of care,” she added. “In particular, the effectiveness of these new treatments, whether they cure the cancer or prolong life and how long patients need to take these new treatments will influence costs.”

To further project national cancer-attributable costs, Mariotto and colleagues combined phase-specific attributable costs with cancer prevalence projections based on aging and population changes and including data of those aged younger than 65 years.

They estimated that in 2015, national costs for cancer-related medical services were $165 billion, whereas the cost of oral prescription drugs was $18 billion.

Based on an aging population, researchers estimated the national costs of cancer-related medical care would reach $221 billion in 2030, whereas costs of prescription drugs would be $25 billion — which is how researchers calculated the $246 billion figure — representing a national cost increase of 34% from 2015.

“In one sense, I wish the big costs of cancer were derived mainly from the drug prices, because that is much more manageable than the real problem we have, which is the cost of care in general,” Lyman said. “Hospitalizations, scans, MRIs, emergency room visits, drug prices ... these are all the things that go into the health care costs.”

Cost vs. value

Value of care for a patient is based on delivery of the best possible treatment at the most affordable cost.

On a societal level, discussions of value focus on a treatment’s effectiveness, with a cost-effectiveness component added to the equation.

Experts said larger questions that help frame this discussion with patients include how much they can afford to pay for cancer treatment and how much they are willing to pay for drugs.

“When I have a cost discussion with a patient, it is really more about how I can help make that patient’s care affordable,” Yousuf Zafar, MD, MHS, FASCO, gastrointestinal medical oncologist and associate professor of medicine at Duke University, told HemOnc Today. “Making that distinction is very important for patients.

Yousuf Zafar, MD, MHS, FASCO
Yousuf Zafar

“The anxiety that patients have about their oncologist bringing cost of care into the office setting stems from a fear that it will limit their options,” he added. “But that is not what a discussion of cost is about. It is really about understanding how we as providers help our patients afford the best possible care. Financial toxicity is a real side effect of cancer treatment, so cost and value are crucial to the patient’s outcomes.

“In addition to drug pricing, we also are seeing increasing trends and cost sharing on the part of insurance companies through higher premiums and deductibles,” Zafar added. “I think clinicians and health systems are part of the problem, as well. We need to do a better job in terms of delivering evidence-based care and talking to our patients about the potential benefits or risks of their treatment.”

A clinician should ask a patient if they can afford the care that they’ve discussed. If the answer is no, the oncologist can refer the patient to a financial counselor or a pharmacist who can assist the patient with financial aid.

“Oncologists should think of themselves as the first line of defense when it comes to identifying their patients’ financial circumstances and potential challenges,” Zafar said. “It’s a tricky subject. I tell patients that I want them to receive the best possible treatment, but I also want them to be able to afford it. If they can’t afford it, I refer them to people who can help, such a social workers and financial counselors.”

Finding value within the U.S. health care system can be difficult compared with other countries, experts said.

For example, a review presented in 2018 at ASCO Annual Meeting showed that a month’s worth of chemotherapy for metastatic colorectal cancer cost $12,345 in the United States compared with $6,195 in Canada. Survival time was the same for patients in both countries.

“We try to talk to patients newly diagnosed with cancer about how expensive these drugs are and what they may be facing financially,” Lyman said. “But, these patients are usually desperate, and in many cases the patient or their loved ones have to pull out any resources they can to try to get the recommended and effective treatment.”

Structural change is needed to better manage U.S. health care costs, Lyman added.

“The trajectory we have been on is unsustainable,” he said. “We really need to find a way that any patient with a life-threatening condition can get the treatment they need with the best chance of surviving and maintaining their quality of life. The current system does not allow that and, in my opinion, we should not accept that as a country.”

Possible solutions

Although there are many pieces to the overall cost of cancer care, bringing down drug prices will significantly help patients manage the cost of their care and relieve a major burden on the overall health care system, according to experts with whom HemOnc Today spoke.

There are several smaller steps that can be done to achieve this.

Among those that have been proposed is letting the federal government, through Medicare and Medicaid, negotiate drug prices directly with pharmaceutical companies.

“We are the only developed country where the government is not allowed by congressional mandate to negotiate drug prices,” Lyman said. “Medicare is the largest provider of health care in the U.S. and they have enormous clout in the industry to negotiate lower prices, but they don’t.

“Because of that, we are bankrolling drug prices for the whole world because we pay so much,” he added. “This is all driven by industry that has fought not to be regulated.”

Letting Medicare negotiate prices could have an enormous impact on drug pricing because insurance companies would most likely follow suit and expect to pay the same prices that Medicare has negotiated.

On Sept. 13, President Donald Trump signed an executive order that Medicare should not pay more for costly Part B or Part D prescription drugs or biological products than the “most-favored nation” price.

This means that the United States should pay the lowest price, after adjusting for volume and differences in national GDP, for a pharmaceutical product that the manufacturer sells in a member country of the Organization for Economic Cooperation and Development.

However, experts are skeptical that this new rule can be implemented without a law passed by Congress.

“The idea is right, but the law itself probably can’t be enforced,” Zafar said. “This is something that should be passed immediately. I see it as a no-brainer.”

Still, such a law would not address the problem of many Americans who can’t simply write a check for drugs if they don’t have proper insurance coverage.

Another idea that has been suggested is importing drugs from other countries to increase competition and bring down the cost of all drugs.

However, there is some risk to this, depending on the country of origination.

For instance, WHO estimates that one in 10 medical products in low- and middle-income countries is substandard or falsified, meaning it likely was produced in very poor and unhygienic conditions and contains unknown impurities. Such drugs can be very difficult to detect because they appear identical to the originator drug or product; however, these drugs may fail to properly treat the disease for which they are intended and can lead to serious health consequences.

Currently, there is no method for the FDA to guarantee the safety of these drugs.

Still, some believe that the United States could be very selective of where the imported drugs come from to ensure their safety.

A final rule from HHS states the government will allow pharmacists to import drugs from Canada in the future, provided the drug manufacturers have shown evidence that the medications are the same as those sold in the U.S.

“The idea of going elsewhere for drugs, which some Americans are already doing by traveling to other countries to get medication or skirting the law to sneak their drugs back into this country, can be done properly with the FDA looking at the approval processes in the countries where they are getting these drugs,” Lyman said. “In fact, many of our drugs, particularly generics, are being manufactured in other countries and imported to the U.S. We have to look country by country to make sure the regulatory process is comparable to the U.S. to ensure safety — Canada is a good example.”

However, pharmaceutical companies have long fought such efforts.

“This is going to be enormously opposed by drug companies because the U.S. is their cash cow because there is no regulation here,” Lyman said.

Drug repository programs are another tool to save costs on drugs for cancer. Thirteen states currently have such programs available for unused cancer drugs, supplies and devices.

Bach and colleagues previously estimated that $3 billion is lost annually to cancer drug waste, which can occur when pharmacy benefit managers send an incorrect dosage or type of medication or when drugs sent directly to a patient’s home expire before the patient has a chance to take them.

Such mistakes and wasted prescriptions add additional costs to the health care system and can delay or interrupt treatment.

Unused medication, if kept in a closed system within a drug repository, can be made available to patients who may not be able to afford it otherwise.

ASCO released a series of recommendations earlier this year to help ensure the safety of drug repository programs.

These include liability protections for participants, letting patients know they are receiving donated prescription drugs and implementing these programs at no additional cost to the patient beyond a handling fee based on Medicaid’s standard pharmacy dispensing fee.

“Oncologists’ first priority is always to ensure that their patients can access the right treatment at the right time,” Howard A. “Skip” Burris, III, MD, FACP, FASCO, who was president of ASCO at the time, said in a press release earlier this year. “Unfortunately, for some people with cancer there are significant barriers standing between them and the care they need. Appropriately implemented drug repository programs can help these patients by increasing the supply of lower-cost cancer drug treatments in a manner that helps keep recipients safe.”

Howard A. “Skip” Burris, III, MD, FACP, FASCO
Howard A. “Skip” Burris, III

The development and approval of biosimilar products offers another opportunity to lower U.S. drug costs. In fact, projections published in 2017 by Rand Corporation estimated that biosimilars would reduce direct spending on biologic drugs by $54 billion (range, 24-150) from 2017 to 2026, or about 3% of total estimated biologic spending over that period.

However, as HemOnc Today reported in the Oct. 10 issue, data suggest clinicians are not completely comfortable prescribing them. Greater uptake will be essential to realize the cost-saving potential of biosimilars over the next decade, experts said.

The bigger picture

Because the cost of care extends beyond drug costs, payment models, such as CMS’s Oncology Care Model (OCM), aim to ensure high-value care, coordinated care.

According to Community Oncology Alliance Payment Reform Brief, the OCM is one of four national payment models, along with those of Aetna, Cigna and Humana. In total, there are 35 payment models planned or underway in 37 states, compared with only 19 last year.

These models aim to increase value by proposing clinical standards and measures, using various payment methodologies, requirement performance reporting, and ED and inpatient admission reporting, among other measures.

“The fee-for-service payment model is a problem for the health care system at large,” Zafar said. “But if you look at the early results from the CMS Innovation Center Oncology Care Model, they suggest that even when you introduce value-based models, the costs do not decrease all that much in the short term.”

Moreover, lowering drug prices and overall costs of cancer care will not be sufficient unless everyone is properly insured.

To do that, the U.S. would have to undergo substantial changes in its insurance system to make sure everyone has affordable and quality coverage.

“In the ideal world where there weren’t other forces, I would hope that we would have universal health care in this country,” Lyman said. “It has worked well in other countries, but it isn’t perfect. There can be long waits or other problems, so it has to be done right.”

Doing it correctly would take a step-by-step process, he added.

“For the U.S. to go from a totally free-market system to a total universal health care system is probably too big of a step in the political world,” he said. “The Affordable Care Act was a good first step. Eventually, I’d love to see a system where all Americans can get treatment without financial ruin. But, political realities are what they are.”

The costs of supporting a single-payer health care system or “Medicare for All” would be enormous, making it a well-known hot-button political issue.

“These same arguments were made about Medicare and Medicaid when they were first proposed,” Lyman said. “But now, when you poll the population, these programs are accepted and very popular ways for older citizens and disabled citizens to get health care.”

Any new system is going to meet enormous resistance during its implementation, but eventually would become accepted, Lyman said.

“We are working our way to what is ultimately needed, which is where everyone receives appropriate and affordable health care,” he said. “What is that timeline? I don’t know. I’d like to see it in my lifetime, but it’s going to be a rocky road.


Bach PB, et al. BMJ. 2016;doi:10.1136/bmj.i788.

Community Oncology Alliance. 2020 payment reform model brief. Available at: communityoncology.org/2020-payment-reform-model-brief/. Accessed Oct. 16, 2020.

Ekwueme DU, et al. MMWR Morb Mortal Wkly Rep. 2019;doi:10.15585/mmwr.mm6822a2.

HHS. Importation of prescription drugs. Available at: www.hhs.gov/sites/default/files/importation-final-rule.pdf. Accessed Oct. 16, 2020.

Mariotto AB, et al. Cancer Epidemiol Biomarkers Prev. 2020;doi:10.1158/1055-9965.EPI-19-1534.

Mariotto AB, et al. J Natl Cancer Inst. 2011;doi:10.1093/jnci/djq495.

Mulcahy AW, et al. Rand Health Q. 2017;doi:10.7249/PE264.

The White House. Executive Order on Lowering Drug Prices by Putting America First. Available at: www.whitehouse.gov/presidential-actions/executive-order-lowering-drug-prices-putting-america-first-2/. Accessed Oct. 19, 2020.

Yezefski T, et al. Abstract LBA3578. Presented at: ASCO Annual Meeting; June 1-5, 2018; Chicago.

For more information:

Gary H. Lyman, MD, MPH, FASCO, FRCP (Edin), can be reached at glyman@fredhutch.org.

Angela Mariotto, PhD, can be reached at mariotta@mail.nih.gov.

Robin Yabroff, PhD, MBA, can be reached at robin.yabroff@cancer.org.

Yousuf Zafar, MD, MHS, FASCO, can be reached at yousuf.zafar@duke.edu.