Law Gives Some Relief on Cancer Drug Costs, but More Help Needed

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The drug-pricing provisions in Democrats’ sweeping health and climate law, the Inflation Reduction Act, will help people on Medicare purchase cancer medicines at pharmacies, but more help is needed in managing the high cost of oncology treatments, say the authors of an article published in JAMA Oncology.

The authors, led Ya-Chen Tina Shih, PhD, of the Houston’s University of Texas MD Anderson Cancer Center, detailed the three provisions most relevant to oncology drugs:

  • Putting an annual limit, or cap, on what people have to contribute toward their Medicare Part D plans. In 2025, there will be a cap of $2000 on out-of-pocket expenses. This limit is pegged to future increases in keeping with Part D drug costs.

For many cancer drugs covered by Part D, monthly costs are between $8000 and $10,000, which creates a “substantial financial burden” for patients, owing to copays, the authors write. There will be more immediate relief with one of these out-of-pocket costs, the 5% coinsurance tab now charged when spending exceeds what’s called the catastrophic limit. The Inflation Reduction Act eliminates that 5% copay in 2024.

While these Part D changes are good news, they don’t address the cost of infused therapies, which are covered by Part B, the authors note. They describe this as “an important shortcoming” of the Inflation Reduction Act.

  • Demanding rebates from drugmakers if prices rise more than consumer inflation. This provision is “especially relevant” for cancer patients, Shih and co-authors write. The annual cost per patient of many cancer medicines would be $9000 to $14,000 lower if the price escalation of these drugs were kept at the same pace as the medical care component of the consumer price index, the authors point out, citing previously published research.

  • Limited negotiations on drug costs. The authors say this provision is “less likely” to offer financial relief to cancer patients. The Inflation Reduction Act allows the federal government to begin limited negotiations on drug costs, starting in 2026 with 10 medicines covered by Part D. Negotiations will expand to include Part B drugs in 2028 and will cover a total of 20 drugs by 2029.

In choosing the targets for negotiations, Medicare may opt for products that many people use, which could thus reduce the number of cancer medicines included in the bargaining, Shih and co-authors write.

“More Work Is Needed”

In their article, Shih and co-authors say that “more work is needed” to address patients’ cancer-related financial hardship. They suggest setting a total cap on out-of-pocket costs for Part B and D drugs and broadening Medicare drug price negotiation to include more cancer medicines. They also recommend addressing the cost of cancer medicine for those who have private insurance.

“The Inflation Reduction Act is largely limited to Medicare beneficiaries. Research has shown that younger adult cancer patients are at an elevated risk of financial toxicity if they have inadequate insurance, so this is another group that policy makers should consider,” Shih told Medscape Medical News in an email exchange.

Separately, the American Cancer Society Cancer Action Network (ACS CAN) has published reports detailing how the cost of oncology care affects patients. The reports include the results of a web-based survey of 1218 people diagnosed with or treated for cancer in the past 7 years. More than half ― 51% ― of respondents reported incurring medical debt as a result of the costs of their cancer care.

In December, ACS CAN issued a report that offered recommendations regarding private coverage. These included a call for elimination of exclusions for preexisting conditions in all health insurance coverage and for expansion of financial aid programs.

“Considering there are 18 million cancer survivors in this country and more than 1.9 million people diagnosed with the disease each year, we need to consider how to help cancer survivors get out from under the costs of their care, and live productive lives,” said Lisa Lacasse, president of ACS CAN, in a statement.

The authors of the JAMA Oncology article report grants, fees, and employment with the following organizations: the American Cancer Society, the National Cancer Institute, Pfizer Inc, AstraZeneca, and Flatiron Health.

JAMA Oncol. Published online December 8, 2022. Abstract

Kerry Dooley Young is a freelance journalist based in Miami Beach.

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