5O-5
FUELING RISING ANTICANCER DRUG PRICES: MEDICARE PART D'S COVERAGE MANDATES FOR ORAL CHEMOTHERAPY
Methods: We used 2007-14 claims from Truven Health Analytics MarketScan Databases to obtain average monthly per-patient expenditures for orally administered anticancer drugs approved by the FDA between 2000 and 2013. We exploited exogenous variation in the age of diagnosis for different cancer types - and therefore the proportion of individuals diagnosed with different cancers that became eligible for Medicare’s prescription drug coverage – to isolate the impact of Part D on the average monthly per-patient expenditures for oral chemotherapy. We defined the proportion of each cancer type that was Medicare-eligible as the proportion of patients who were age 65 or older at the time of initial cancer diagnosis, which we obtained for 15 unique cancer types from the Surveillance, Epidemiology and End Results program database. We used fixed-effects regression models with robust standard errors to evaluate changes over time in monthly costs of oral chemotherapy within each cancer site. All costs were inflated to 2014 USD.
Results: Across all cancer types, the average monthly cost of oral anticancer drugs increased 8.7% per year over inflation between 2007 and 2014. Monthly costs increased significantly faster over time for cancer sites with a larger exposure to the Medicare market. The average monthly cost of using oral chemotherapy rose 1.9% (95% CI: 0.3, 3.5) faster per year for every 1% increase in the share of the cancer site eligible for Medicare. These cancer-specific trends were driven primarily by greater shifts in utilization towards newly FDA-approved and more expensive oral anticancer therapies rather than larger increases in the costs of existing drugs.
Conclusions: We observed substantial increases in the monthly costs of oral anticancer drugs that may be partly attributable to the reimbursement incentives produced by Medicare Part D. The impact of Medicare Part D’s mandate to include all anticancer drugs on plans’ formularies on pharmaceutical innovation in the market for oral chemotherapy warrants further exploration.