Enhanced Reimbursement Incentives for Generic Cancer Drugs Found Not to Affect Prescribing Patterns

Authors of a study funded by the American Cancer Society and the National Cancer Institute determined that a national insurer’s payment reform program in which medical oncology practices could opt-in to increase reimbursement for less expensive, generic cancer drugs — in contrast to their more expensive, brand-name equivalents — did not significantly affect prescribing patterns or spending on cancer care.¹

The investigators, who include researchers from the University of Pennsylvania Perelman School of Medicine in Philadelphia, the Wharton School, University of Pennsylvania in Philadelphia, an analyst from UnitedHealthcare, and a former executive from UnitedHealth who is now a consultant, specifically looked at buy-and-bill practices in Medicare, which they wrote can create “potentially perverse financial incentives to prescribe higher-price anticancer drugs irrespective of their efficacy or toxicity because profit margins track with drug prices.”

To determine whether changing the fee schedule for prescribers to a higher profit margin for generic anticancer medications could prompt an increase in prescribing of these drugs, UnitedHealthcare ran a voluntary pilot program from 2007 to 2016 that sought to bring the financial rewards for prescribing generic meds more in line with those garnered by oncologists when they prescribe equivalent brand-name medications.

To do this, the insurer raised the percentage markup on the average sales price (ASP) for 12 anticancer medications:  5-fluorouracil, cisplatin, docetaxel, doxorubicin, gemcitabine, irinotecan, oxaliplatin, topotecan, vinorelbine, paclitaxel, etoposide, and carboplatin (all of the associated substitutions that would be considered branded equivalents were not listed). More than 120 cancer drug regimens were prescribed and analyzed as part of the evaluation, according to authors.

The thought was that the program would create “financial equivalence” for the oncologists, increasing the margins of generic drugs to better match incentives that would be received by the oncologists had they prescribed brand-name drugs.

The authors determined that even in the presence of amped-up fee schedules, adoption of the pilot program by oncologists did not lead to a change in practice or in spending — both in terms of reimbursement by the payer and out-of-pocket spending for patients.

This article originally appeared on Cancer Therapy Advisor