Cancer drug spending by health plans and employers has nearly doubled in the past five years and is expected to double again by 2022. In 2018 alone, 15 new cancer drugs and 55 new indications for existing cancer drugs were approved by the FDA, compared to just seven in 2007. Per member per imonth (PMPM) spend on medical benefit specialty drugs was $29.97 for commercial plans, compared to $25.49 in 2016, an 18% increase; for Medicare the figures were $52.19 versus $46.56, a 12% rise. Oncology accounted for 43% of commercial spending, 58% of Medicare spending and 46% of Medicaid spending.[1]

The average cost of a new cancer drug released in 2017 was $150,000, compared to an average cost of drugs brought to market in 2013 at $79,000.[2] In addition, the dramatic growth rate of novel, high-cost agents is difficult to predict. Drugs like Keytruda and Opdivo have burst onto the scene in just the past five years and represent an annual cost of $120,000 annually, which health plans were not paying for before the FDA approval.

The New Reality

New therapies offer hope for cancer patients, but higher spending doesn’t necessarily equal better care. The rapid pace of oncology innovation and increasing drug costs have put health plans in a difficult position.

How does a health plan control costs and utilization in this new age of cancer care?

Old strategies and resource models for managing oncology costs simply won’t scale. Increasing member and employer premiums only exacerbates the problem.

Keep Control with Oncology Analytics

A partnership with Oncology Analytics provides the critical missing link for health plans to manage the total cost of cancer care. This includes access to current, evidence-based, disease-specific analytics on all cancer types and treatment options, backed by board-certified oncology physicians and pharmacists.

The growing number of treatment options, combinations, and additional lines of therapy simultaneously increase the complexity in making an evidence-based determination for how to treat a patient’s cancer. Without investing in a team of board-certified oncologists, pharmacists and researchers, how can health plans keep up with this rising expense?

Oncology Analytics can provide your health plan with deep, real-time oncology expertise as an extension of your internal teams, for a fraction of the cost of doing it yourself. Further, with provider satisfaction scores in the 90th percentile, we partner with your providers to ensure the right care at the right time.

Our comprehensive approach addresses the in-house resource constraints most health plans face by providing support in two critical areas:

1) Data-driven, utilization management, which is purpose-built for oncology and provides an in-depth evaluation and analysis of patients through the entire continuum of care, under the guidance of board-certified oncology physicians and pharmacists.

2) Deep analytics and insights into health plans cancer drug spend, which ensures that anti-cancer therapies are based on science and evidence-based protocols and specific to the patient’s unique circumstances and needs.

We believe that by consistently employing technology, data science, analytics, and deep oncology expertise, patients will get the right treatment, at the right time, at the right costs. Our protocol intervention recommendations have demonstrated proven results in quality and value improvements, including an average PMPM savings of $4 across lines of business.

Oncology Analytics understands the complexity involved in the management of cancer treatment options caused by the rapid pace of research and new drug introductions that are changing the oncology landscape daily.

If you would like to contact one of our oncology specialists to discuss strategies to help your organization Keep Control of rising oncology drug costs, please click here.


[1] Magellan 2018 medical and pharmacy spend report
[2] Cancer drug spending doubled in the last 5 years, report says, by Maggie Fox, NBC News, May 24, 2018.

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