Dec. 18, 2009 – Battling cancer in the U.S. is a
costly proposition, especially for the extremely expensive drugs
required to fight the disease, which causes many – even those on
Medicare - just to skip the treatment, according to an analysis of the
cost of obtaining these drugs in the U.S. and the U.K.
For 7 of 11 expensive cancer drugs, British
patients pay no out-of-pocket costs; U.S. patients, even with Medicare,
pay out $1,200 to $24,000 – uninsured pay even more
Kalipso Chalkidou, M.D. director of the
international program at the National Institute for Health and Clinical
Excellence in London, with U.S.-based lead author Ruth Faden, Ph.D., at
the Johns Hopkins Berman Institute of Bioethics, compared the cost and
availability of 11 drugs used to treat a variety of cancers, focusing on
those costing between $8,700 and $32,000 for a three-month supply.
For seven of the 11 expensive cancer drugs
examined, British patients pay no out-of-pocket costs. In comparison,
U.S. patients, even those with Medicare coverage, pay out-of-pocket
costs ranging from $1,200 to $24,000, depending on the length of their
treatment.
U.S. patients without insurance pay even more, and
because cancer patients often take more than one drug, their
out-of-pocket costs could soar higher.
Many senior citizens on Medicare have little
knowledge of what awaits them when confronted with the live-saving need
of expensive drugs, a common need in the fight against cancer.
The following is a section of the article published
in the December issue of The Milbank Quarterly that deals primarily with
Medicare’s role in helping senior pay for the drugs they need.
““More is known about the access to
and financing of cancer drugs by Medicare than by most other payers in
the United States. Part B of Medicare covers the category of drugs
(mostly cancer medications) that are generally administered in clinical
settings. For Medicare enrollees who have purchased Part B coverage
(99.2 percent of all Medicare beneficiaries), Medicare is required by
law to include cancer drugs that have received what is described as a
"medically accepted indication."
This instruction is interpreted liberally to
include uses approved by the Food and Drug Administration (FDA) as well
as drugs reported in peer-reviewed journals and pharmaceutical compendia
to have a positive impact.
“The legal situation with regard to Medicare Part D
coverage for medications (generally taken orally) purchased from a
pharmacy is somewhat less clear but also expansive. The private plans
that contract with Medicare to provide Part D benefits are required to
cover all cancer drugs that were approved for use in 2006 at the time
the program was implemented.
“Congress has since passed legislation that
requires these plans as of 2010 to include all drugs for conditions that
are major or life threatening, with cancer drugs cited as a prototypical
example.
“In addition, Medicare must pay for several drugs
and treatments for cancer that have not been approved by the FDA. Some
of these treatments, known as "off-label," cost as much as $10,000 a
month. Medicare pays for these drugs based on appeals from patients and
doctors who see few other possibilities for severely ill patients, as
long as these are listed in what are often pharma-funded compendia.
Medicare Prescription Drug Plan
“The addition of pharmaceutical benefits coverage
(Part D) to Part B's limited coverage has resulted in payment for drugs
for more than 90 percent of the United States' elderly and disabled
enrolled in Medicare. But although these beneficiaries thus are now
insured for expensive cancer drugs, they still do not have full
financial coverage, and their out-of-pocket costs for expensive cancer
drugs can still be substantial (see table 1 in article).
Medicare's Annual Open Enrollment is from Nov. 15 -
Dec. 31
Each year drug and other plans change what they cost and what they
cover. The next general open enrollment starts on November 15, 2009.
During this time, people with Medicare can add, drop or change their
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2010 coverage.
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“In the lead-up to passage of the Medicare
Prescription Drug, Improvement, and Modernization Act (MMA), the U.S.
Congress imposed a $400-billion budget ceiling on the new benefit in
response to criticism of the program's huge price tag.
“In turn, this led to the inclusion of the "donut
hole" in Medicare Part D's pharmaceutical benefit rules. That is,
patients who have paid the Part D premium must pay an annual $295
deductible, and then Medicare pays 75 percent of their drug costs up to
an annual ceiling of $2,700. Beneficiaries pay the full cost until their
out-of-pocket expenditures reach $4,3501
(the donut hole).
“At that point, catastrophic coverage kicks in,
with low copayments for patients—the greater of $2.40 for generics and
$6.00 for many other brand-name drugs, or 5 percent of the drug
cost—which can be quite large for specialty (Tier 4) drugs.
“Although the MMA created a set of standard
benefits for Part D, private plans competing for consumers under the
Medicare Advantage Program have come up with a wide variety of drug
classifications, with different tiers of drugs associated with different
levels of cost-sharing and deductibles.
“Several studies and news reports have documented
the burden that the donut hole in the Medicare pharmaceutical creates
for cancer patients who do not qualify for low-income subsidies. Cancer
patients can be particularly affected because the high cost per pill may
force them into the donut hole as early in the calendar year as
February, no doubt a problem for individuals on a fixed income.
“Medicare enrollees with low incomes may be
eligible for subsidies and eligibility for Medicaid, which can
significantly defray drug costs (9.4 million are enrolled out of 12.5
million eligible).
“But the creation of Part D worsened the financing
of treatment for some patients who had been receiving free or subsidized
drugs from pharmaceutical companies or special insurance programs. In
the most heartrending examples, this meant that some Medicare
beneficiaries no longer could receive the oral cancer drugs they
previously had been given for free, as they were unable to afford the
out-of-pocket costs but earned too much to receive needs-based
assistance.
“Besides stories of hardship, there also is
substantial evidence, both statistical and anecdotal, that spending on
expensive cancer drugs represents a difficult barrier to care, for
younger as well as older cancer patients, both those with no insurance
and those with inadequate insurance, who cannot afford to pay what is
required, and a serious financial handicap even for those who can.
“As a recent joint report of the Kaiser Family
Foundation and American Cancer Society (ACS) notes, although the
majority of cancer patients in the United States under age sixty-five
are privately insured, it is impossible to determine how many of these
patients face high out-of-pocket health costs.
“For insured patients, the percentage of costs that
they must pay varies from plan to plan and within plans by type of
service. Such coinsurance requirements are increasingly being applied to
so-called Tier 4 or specialty medications, that is, expensive drugs that
include a number of biologic treatments for cancer such as Herceptin (trastuzumab)
and Avastin (bevacizumab).
“The most common coinsurance percentage for
patients across all types of services in employer-sponsored PPO plans is
20 to 25 percent, and for Tier 4 medications, the estimate ranges from
20 to 33 percent.
“Both the drug cost and the physicians' markup to
private insurance plans can be substantial. As of 2008, approximately 86
percent of Medicare drug plans and 10 percent of private plans that
included drug benefits incorporated Tier 4 coinsurance.
"It is not
surprising, then, that news reports suggest that about 12 percent of
individuals with advanced cancer—25 percent of those with incomes below
$40,000—have not used the care recommended for them by medical
professionals because of high cost."
To view the full study on Wiley-Blackwell’s
website, freely accessible to all visitors until March 2010,
click here. For copy in pdf:
click here.
Keep up with the latest news for senior citizens, baby
boomers
Dec. 18, 2009 – Battling cancer in the U.S. is a
costly proposition, especially for the extremely expensive drugs
required to fight the disease, which causes many – even those on
Medicare - just to skip the treatment, according to an analysis of the
cost of obtaining these drugs in the U.S. and the U.K.
For 7 of 11 expensive cancer drugs, British
patients pay no out-of-pocket costs; U.S. patients, even with Medicare,
pay out $1,200 to $24,000 – uninsured pay even more
