Cancer Drugs: Prices and State Policy Responses
Cancer drugs are currently the primary focus of the global biopharmaceutical industry, representing nearly one third of all drugs in clinical development and offering meaningful survival gains for patients with several forms of cancer. Yet the prices of oncology drugs are high and rising fast, imposing a great financial burden on insurance plans and patients who pay for them and attracting substantial media and policy attention. States have been at the forefront of the policy response to cancer drug prices, pursuing legislative remedies by mandating that insurance benefits provide broad access to chemotherapies with limits on patient cost-sharing. These policy experiments have served as the precursors of attempts at federal legislation or regulation. This session includes three papers that examine prices and state policy responses in the cancer drug market. The first paper takes a careful look at trends in drug prices in the Medicare program, constructing price indices that control for improvements in drug quality and shifts from intravenous to oral chemotherapies (typically covered under Part B and Part D, respectively). The second paper studies an early wave of state mandates requiring insurers to provide coverage for off-label use of even the priciest cancer drugs, analyzing their effects on off-label utilization in private health plans and distinguishing between use deemed ‘appropriate’ and ‘inappropriate’ according to standard drug compendia. The third paper considers the more recent state legislative trend of oral chemotherapy parity laws and evaluates their impact on drug utilization, out-of-pocket and total expenditures in private plans.