Video: Cancer Care Costs Everyone Too Much. What Can Health Plans Do About It?

The fast-rising cost of new oncology drugs is a major reason why the cost of cancer care in the U.S. is increasing 12% a year, on track to hit $240 billion by 2023.1 But what are we getting for all this investment? Are patients living much longer than if they were to receive tried-and-true therapies? What can health plans do to ensure higher quality at lower costs?

These questions were at the center of our recent panel discussion with three leaders in the field: Dr. Vinay Prasad, a practicing hematologist-oncologist and author of Malignant: How Bad Policy and Bad Evidence Harm People with Cancer; Dr. Elizabeth Malko, Florida Blue Medicare vice president and chief medical officer; and Dr. Andrew Hertler, an oncologist and chief medical officer of New Century Health.




Four main takeaways from this discussion:

The value proposition for many new oncology drugs is very poor.

Certainly, there are drugs that have transformed survival for some types of cancer. But those are exceptions, Dr. Prasad said, and the average cancer drug offers modest to incremental benefits. Among 71 consecutively approved drugs for solid tumors, median improvement in survival was just 2.1 months.2

For those meager benefits we’re paying a steep price. New drugs routinely cost $100,000 to $200,000 a year, and as much as $400,000 a dose. Dr. Prasad called the value proposition very poor, and that’s hard to argue.

For all the hype that accompanies new cancer drugs, the evidence used to approve many of them is astonishingly skimpy.

Despite what many of us might expect, the trials used to gain FDA approval of new cancer drugs often aren’t that rigorous, Dr. Prasad explained. About a third are approved and brought to market following trials that don’t have a control arm, which would allow us to compare the drug against the standard of care. Another third of these trials measure outcomes other than survival, such as how long it takes for the cancer to grow by an arbitrary percentage. And drug-trial participants are typically healthier, younger and wealthier than the overall cancer population—leading to potentially rosier outcomes than what real-world patient will experience.

Health plans need an oncology strategy and a partner to sort through the data, point to the best cancer regimens and manage drug spend.

Health plans face tremendous pressure to authorize new cancer therapies, even in cases where the indications are questionable (and the oncologists themselves are skeptical they will be effective). But they can’t possibly keep up with the science, and they worry about coming off as the “big bad insurance company” if they deny treatments. Partnering with New Century Health not only gives health plans and providers access to the latest science through proprietary clinical pathways, but it also changes the conversation to focus on what’s best for the patient. There’s an understanding that more care often isn’t the best care. Focusing on quality and science is a much more effective way to rein in costs than simply focusing on costs.

There are three things all health plans should be doing today to better manage oncology care.

Dr. Hertler listed three concrete steps. First, despite the threat of COVID-19, plans need to encourage more patients to get age-appropriate screenings for cancers. Some studies have shown cancer screenings decreasing by as much as 90% during the pandemic3, and NCH has seen about a 70% decrease among its partners. When these cancers are eventually diagnosed, they will be more deadly and more expensive to treat.

Next, plans need to tap into expert advice to sift through the mountains of clinical evidence, interpret it and turn it into pathways for virtually every cancer type. Following these pathways can sometimes save tens of thousands of dollars without sacrificing quality.

Finally, plans can reward oncologists for selecting the highest value regimens. Many cancer practices still rely heavily on the revenue from drug margins—the difference between what they pay to acquire a drug and how much they can charge for it when it’s dispensed. They have little financial incentive to select lower cost, but equally effective drugs. Health plans can address these misalignments by rewarding providers for using high-value regimens.

To learn more about how to bend the cost curve in oncology while improving patients outcomes and experience, reach out to me directly at


IQVIA: Global Oncology Trends 2019; Cancer Insurance

 Fojo T, Mailankody S, Lo A. Unintended consequences of expensive cancer therapeutics—the pursuit of marginal indications and a me-too mentality that stifles innovation and creativity: the John Conley Lecture. JAMA Otolaryngol Head Neck Surg 2014;140:1225-36.

STAT; Epic Health Research Network: Routine cancer screenings have plummeted during the pandemic, medical records data show, 2020 


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