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COA Statement on Senate Finance Committee “Drug Pricing Reduction Act” (Chairman’s Mark)

Including Patient Financial Assistance in ASP a Dangerous Proposal

Washington, DC, July 23, 2019 (GLOBE NEWSWIRE) -- Statement from Ted Okon, Executive Director, Community Oncology Alliance (COA):

The Community Oncology Alliance (COA) appreciates the work of the Senate Finance Committee in developing the proposed Prescription Drug Pricing Reduction Act (drug package). There are provisions in the package that COA can support, such as encouraging a healthy and competitive biosimilars market, transparency around pharmacy benefit managers (PBMs) and DIR Fees, and changes to grandfathered site-neutral payments for hospitals. These are important problem areas in our health care system that we are encouraged to see Congress addressing.

However, COA is vehemently opposed to the proposal to include support from patient assistance programs (coupons and related financial support) in the calculation of Average Sales Price (ASP), the basis for Medicare Part B drug reimbursement. Physicians, nurses, practice administrators, and other community oncology professionals see this proposal as having a severe adverse impact for patients with cancer who depend on financial assistance.

If patient assistance is calculated as part of ASP, drug manufacturers can be expected to reduce or eliminate these critically important programs. In today’s world of higher patient cost sharing and insufficient insurance, financial assistance is vital to ensuring that patients get access to cancer treatment. Take that away and you create a system of tiered patient access to cancer care; those that can afford treatment get a shot at life, and those who can’t afford deductibles and co-payments get no shot at treatment.

With increasing premiums, high-deductible health plans, and higher cost-sharing, patients with cancer are responsible for a greater percentage of treatment costs, regardless of underlying drug prices. Patient out-of-pocket responsibility in private health insurance has continued to grow, creating even greater need for patient assistance. The average deductible for privately covered employees was $1,573 in 2018, up over 70% or $917 from 2010.

If, for some reason, manufacturers continue patient assistance programs should this proposal become law, the reduction in ASP would end up putting most Part B cancer therapies under water (reimbursed less than cost). Indeed, this is already the case with some Part B drugs. A 2018 Avalere analysis for COA found that 21% of all Part B drugs analyzed had a negative estimated difference between drug acquisition cost and the Medicare allowable payment amount. The same analysis found that among the top 10 highest cost cancer drugs (accounting for 72% of all cancer drugs and 23% of all Part B drug spending in 2016), the average estimated difference between drug acquisition cost and Medicare allowable payment amount is 2.4% or $2.50. If more cancer drugs are pushed underwater then it will simply cause more cancer care to be shifted to the much more expensive hospital setting, resulting in patient access issues – particularly for rural or underserved areas – and much higher costs.

As the frontline providers of care for the majority of Americans battling cancer, community oncologists are highly aware that the trend of continuously increasing drug prices and cancer care costs are unsustainable and unacceptable. We commend Congress for prioritizing efforts to address this important and complex issue affecting patients. Ensuring access to affordable life-saving cancer treatments is a top concern for oncologists, oncology nurses, practice administrators, pharmacists, and other cancer care professionals.

COA believes that every stakeholder – starting with oncologists – in our incredibly complex health care system must come together and selflessly collaborate to reduce medical costs. Stakeholders from every corner of the health care system can – and must – find a solution to high drug prices. But incentivizing the killing of support for patient-focused assistance problems is bad policy and a potential death blow for needy patients with cancer.

History has documented that even well-intended policymaking can backfire, harming patients, increasing costs, and limiting access to care. This has been particularly true in cancer care where patients are forced into the much more expensive hospital system, driving up costs for seniors with limited mobility and fixed incomes, as well as all taxpayers who fund Medicare. As the 2018 Community Oncology Practice Impact Report notes, since 2013, approximately 135 independent community cancer clinics – many comprised of multiple locations – have been forced to close their doors, and approximately 190 clinics have been acquired by hospitals. The actuarial firm Milliman found that the consolidation of community cancer practices into hospitals cost Medicare and taxpayers an extra $2 billion in 2014 alone. In addition, Medicare beneficiaries responsible for the 20% coinsurance saw their bills rise by $500 million that same year.

The Senate Finance proposal to radically alter the reporting of patient assistance programs and link them to Part B drug reimbursement would severely upend patient care to solve a problem the government admits it does not know enough about. A 2016 Government Accountability Office (GAO) report on the use of coupon discounts in Part B notes that more data is needed and specifically recommends Congress give the HHS Secretary authority to first collect the data. That is exactly what the proposed Senate Finance drug package should do so that patients are not harmed. It is mindboggling that anyone would propose such a dramatic change with real patient impact without even a proper understanding of the magnitude or scale of the problem.

Congress must act to curb high drug prices but must do so carefully and thoughtfully. We applaud several of the Senate Finance’s proposals but strongly urge Congress not to include patient financial assistance in ASP calculations. This is a dangerous proposal without the proper study and analysis. The lives of patients with cancer depend on it.


About the Community Oncology Alliance: The majority of Americans battling cancer receive treatment in the community oncology setting. Keeping patients close to their homes, families, and support networks lessens the impact of this devastating disease. Community oncology practices do this while delivering high-quality, cutting-edge cancer care at a fraction of the cost of the hospital setting. The Community Oncology Alliance (COA) advocates for community oncology and smart public policy that ensures the community cancer care system remains healthy and able to provide all Americans with access to local, quality, affordable cancer care. Learn more at www.CommunityOncology.org.

Nicolas Ferreyros
Community Oncology Alliance