Can a new pricing model improve cancer drug adherence?

Patients generally prefer pills and capsules to injections or intravenous drug administration. The cost to the system is lower, too, because oral meds don’t require pricey self-injectors and can be taken at home, rather than in a doctor’s office or hospital. Drug companies are happy, too, because the convenience of oral meds dramatically increases the sales potential.

Therefore it should be great news for cancer patients that more oral formulations are coming to market. Yet in Cancer Pills Prompt Compliance Worries, the Wall Street Journal addresses a potential downside: patients who are prescribed oral medications for cancer may be less apt to adhere to their regimens. [For some reason I can’t find this article online yet.]

The lack of patient discipline in oral therapies could have business implications, but doctors warn about more serious health consequences.

“You’ve got a very specific window of time in which you’ve got to take these drugs or they’re not going to work,” [oncologist Angela] DiMichele said.

She said that not taking the drugs as prescribed often leads to health-care cost increases as a result of more physician and hospital visits –not to mention the distortion of clinical trial data.

Dr. DeMichele also worries that skipping doeses will cause disease resistance –as happens in HIV treatments– and lead to development of more aggressive cancers.

There are a variety of reasons for this “lack of patient discipline.”

  • Inconvenient dosing schedules
  • Side effects and toxicity
  • Forgetfulness or lack of understanding by patients of the importance of adherence
  • Benefit design: oral drugs are often covered in the pharmacy benefit, which means co-pays, donut holes and the like
  • Overall cost: the patient contribution is too high, so people skip doses or abandon therapy

These are all thorny issues, but there’s really no excuse not to resolve the last two. One way to do so would be by adjusting the pricing model for the drugs. Rather than charging a fixed amount per prescription, why not switch to a software licensing model? A patient would receive a license to use the medication for the full course of their treatment in exchange for a one-time fee, and then receive whatever product they need over that time frame. The patient could pay his or her share up front or it could be subsidized by someone else if the cost is a problem. Either way the financial concern would be addressed at the start and wouldn’t have to be dealt with over the course of treatment.

Fixed costs represent a very high percentage of the total cost of supplying the drug, so it doesn’t really matter whether the patient needs a few or many refills.  The model could be taken a step further by providing some kind of a financial or other incentive to patients who demonstrate adherence to their regimen once the license is established. That could aid in to a resolution of the first three issues.

June 10, 2009

8 thoughts on “Can a new pricing model improve cancer drug adherence?”

  1. This is a very good topic and leads me to a comment: There’s a device for that! I should say there will be after reading your post!

    One of my big topics of conversation today is the use of medical devices that report data. There are no laws here yet and it needs to be used with patient permission, i.e. the best scenario using a PHR to grant permission to view and share, this way data is not sent to who knows who. It also solves the issue of showing compliance too, especially with cancer oral medications.

    You are right that oral medications are an issue and I do agree with you on the lat 2 issues needing to be addressed too.

    If a device is used though, all privacy issues must be addressed so you, the patient know where you data is going. I hate to see reporting health devices business turn into an insurance device, which is what will happen to monitor if we all don’t speak up. The post I wrote about Target stores is one to view as they have an insurance company who offers incentives to those who will potentially electronically connect and beam their vitals from an iPhone. If a patient agreed to such, it should be sent through a PHR first to show and allow the patient to also have a record and give permission.

    In summary, a device could work here too with cancer medications as long as all permissions were granted and everything as far as reporting was done in a constructive manner so the doctor and patient work together. The bluetooth inhaler is not far away either, so I think you may even start seeing delivery methods possibly under go some changes in the near future too.

  2. “A patient would receive a license to use the medication for the full course of their treatment in exchange for a one-time fee, and then receive whatever product they need over that time frame.”

    This just isn’t feasible. One of the primary obstacles suppliers face in marketing a product is maintaining excludability. This means making people pay for their product. Under a distribution scheme such as this, a black market would spring up immediately. Here’s an analogy; it would be like a group of five people going to an all you can eat diner, and having only one person order.

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