State Mandated Insurance Benefits and Off-label Use of Cancer Drugs

Background: Access to cancer drugs used off-label is considered vital to the treatment of many cancer patients in the United States. Yet policymakers are concerned that use of drugs in this way may drive up health care costs with little rigorous evidence of benefit to patients. There is little empirical work on trends in off-label use nor in how public policies influence off-label use. We hypothesized that state health insurance mandates for private insurers to provide coverage for off-label use of cancer drugs cause higher rates of off-label use.

Methods: We paired a tabulation of state laws mandating coverage for off-label usage of cancer drugs with Truven Marketscan data on utilization of cancer drugs in private health plans nationwide from 1999-2007, covering the period when changes took place in the laws of 8 states. We studied all 35 infused chemotherapies approved between 1987 and 2007, and designated on-label, appropriate and inappropriate off-label use for each drug according to the two main drug compendia cited by state laws on off-label coverage. We studied trends in the three types of case-mix adjusted drug use, and estimated difference-in-difference regressions of the effect of state laws on off-label use.

Results: Our sample includes 71,493 patient-years of data. We estimate 41% of utilization was off-label, including 17% of use conservatively defined as inappropriate. Trends show gradual declines in appropriate and inappropriate off-label use over time. There was no observable change in off-label use trends after state laws changed to require off-label coverage. The regression analyses demonstrate no effects of state policies on either appropriate or inappropriate off-label use. These results were robust to several changes in model specification and sample restrictions.

Conclusions: Off-label use has been declining in importance in recent years, perhaps due to the boom in therapies approved in new indications. State mandates for off-label coverage may not be an effective approach to increase off-label chemotherapy use. In surveys regarding off-label use, physicians also place little importance on the recognition of compendia by private payers, suggesting that enforcement of state laws may be inconsistent. As well, payers often unify their drug coverage policies across states to be consistent with the most stringent policies, so that individual state laws do not bind on coverage decisions. The ineffectiveness of state policy may actually improve patient outcomes, given that compendia updates and state policymaking are not always evidence-based processes.