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Uninsured Patients Paying Far More for Cancer Drugs

Stacie Dusetzina

Stacie Dusetzina (Univ. of North Carolina, Chapel Hill)

8 April 2015. An analysis of cancer drug costs and reimbursement practices shows people without health insurance are paying much more for chemotherapy drugs than people covered under private insurance or Medicare. The team led by pharmacy professor Stacie Dusetzina at University of North Carolina in Chapel Hill published its findings in the April issue of the journal Health Affairs (paid subscription required).

The cost of pharmaceuticals, particularly cancer drugs, is becoming a more urgent issue for the health care industry as new payment models and formulas take hold in the U.S. that move away from traditional fee-for-service to performance-based measures. A study published in 2013 shows the price of cancer drugs doubled in the past decade from about $5,000 to more than $10,000 a month.

In some instances, health care providers are questioning the high cost of cancer drugs. In one case, Memorial Sloan-Kettering Cancer Center in New York declined to treat patients with a new, more expensive drug for colorectal cancer, when a less expensive alternative considered just as effective was available at less than half the price, with the decision explained in a 2012 New York Times op-ed.

Dusetzina and colleagues examined the issue of cancer drug costs from a different angle, looking at the prices paid by patients depending on their health insurance. While claims data have long been available to show amounts paid by insurance companies and public sources (e.g., Medicare) for drugs, other sources showing drug prices charged by health care providers before negotiated discounts became available only in the past few years. The Medicare Provider Utilization and Payment Data Public Use File was one of those newer sources examined by the researchers that reveal drug costs before and after insurance companies and public agencies negotiate their discounts.

The researchers, including colleagues from UNC’s and Harvard’s medical schools, investigated prices charged by health care providers for drugs in outpatient chemotherapy, and found the prices varied widely in 2012 depending on the drug and source of funds to pay for it. Costs for a single chemotherapy infusion ranged from $59 for 500 milligrams of fluorouracil, a generic drug, to $9,225 for 10 milligrams of bevacizumab, marketed as Avastin. Both drugs are prescribed to treat various types of solid tumor cancer. And average reimbursements varied that year for chemotherapy from 40 percent for Medicare to 56 percent for private insurance plans.

Uninsured patients, however, found themselves often paying full price for their chemotherapy drugs, since they were not able to take advantage of discounts negotiated by insurance companies or public agencies. Uninsured patients paid prices as much as 5 times higher than amounts reimbursed by private health plans and 43 times as much as Medicare reimbursements for the same drugs. The researchers found similar discrepancies in amounts and reimbursements in prices charged and paid by uninsured, private plan insured, and Medicare patients for office visits to their doctors.

“One key concern here is that patients without insurance could be asked to pay more,” says  Dusetzina in a university statement, “not just more than an insured person but more than Medicare or private health insurance plans.” She adds that “There needs to be more transparency and less variability in health care pricing.”

Health care costs for people without insurance are paid by the individuals or their families, or absorbed by public agencies and hospitals. The Affordable Care Act aims to reduce the number of uninsured by providing subsidies to households, under certain income levels, for buying private insurance through online exchanges or expanding Medicaid. Expansion of Medicaid coverage is up to the states, with 22 states yet to expand their Medicaid rolls leaving some 5.1 million people without health insurance, according to White House estimates.

In addition, subsidies for people who enrolled for private insurance in states where the Federal government runs the online exchange are being challenged in the King vs. Burwell case now before the U.S. Supreme Court. The Robert Wood Johnson Foundation estimates a decision in favor of the plaintiffs will raise the number of uninsured Americans by 8.2 million, an increase of 44 percent.

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