Laws Limit Medicare's Ability to Control Cancer Drug Costs

-- Andrea Mongler

Tuesday, January 27, 2009

TUESDAY, Jan. 27 (HealthDay News) -- A unique regulatory and legislative framework prevents Medicare from controlling the quickly escalating costs of cancer drugs, as it does with other drugs and medical goods, according to a report published online Jan. 27 in the New England Journal of Medicine.

Peter B. Bach, M.D., of Memorial Sloan-Kettering Cancer Center in New York City, writes that Medicare spending on Part B drugs -- a category dominated by cancer treatments -- increased 267 percent from 1997 to 2004, and that out-of-pocket costs can threaten cancer patients' financial security.

Bach notes that for non-cancer drugs, Medicare's strategy to keep costs down involves control of utilization, generally by limiting coverage of payment; control of prices, often by encouraging price competition among makers of interchangeable drugs; and control of both utilization and prices. However, Medicare cannot use these strategies for cancer drugs because of several laws and regulations. Medicare interprets some of these to mean it must provide coverage, meaning it cannot limit utilization. Other laws and regulations prohibit it from deeming cancer drugs as interchangeable, the report indicates.

"If policymakers seek to slow the upward rise in cancer drug prices and spending, they could enable Medicare to use its existing approaches or provide legislation that would empower the program to experiment with new ones. Medicare's previous successes in several related areas suggest that the potential reductions in spending on cancer drugs could be meaningful," Bach writes.

The author reports financial ties to several pharmaceutical and health care companies.

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Specialties Cardiology
Diabetes & Endocrinology
Internal Medicine
Family Practice

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