ThoseWho Pay Have a Say: A View on Oncology Drug Pricing and Reimbursement Ovarian Cancer and Us OVARIAN CANCER and US Ovarian Cancer and Us

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Tuesday, June 21, 2016

ThoseWho Pay Have a Say: A View on Oncology Drug Pricing and Reimbursement

Oncology and Genetics, UnitedHealthcare, Minnetonka, Minnesota, USA
June 20, 2016

The four actions recommended above require commitment,
rigor, and courage. Failure to address the problem drives the
whole medical care system to a crisis point. No one involved
in cancer care—pharmaceutical firms, physicians and nurses,
payers, and most importantly, patients—will escape the
consequences of failing to change. It is time to stop writing
articles and begin doing something different.

 Scores of articles have been published stating that cancer
therapy costs are unsustainable and unjustified, and the
effect of all of those papers has been nothing but a continued
escalation in the price of cancer therapies. It is time to take
action rather than to simply lament the present. This article
assumes that costs are too high, and it suggests four specific
strategies to help lower those costs. Although some
examples and data from UnitedHealthcare are used in this
article, the views reflected in this essay are solely those of the
To better understand these recommendations, a quick
review of basic economics is helpful. Price in a free market is
determined by supply and demand. It is a safe assumption
that pharmaceutical firms are able to manufacture unlimited
supplies of medications if the demand is high enough.
Demand is determined by the consumer’s willingness to pay,
and it is this critical component that is altered in health care
purchasing decisions. The free market is an illusion, because
the buyer is not the payer. The consumer, a patient consulting
with a physician, makes a selection and then asks a third party,
the payer, to write the check. Any rational person in this
scenario would be indifferent to the price. The payer
functions as a broker for the patient. The payer, however,
has limited resources, and this constraint forces decisions
about the value of therapies.Those decisions may be different
from the patient’s values, and some conflict is inevitable in
this situation.
An economist’s solution removes the payer and
allows the patient to purchase her care directly, but any
oncologist—and any patient—knows that without insurance,
precious few patients could afford therapy.Retaining insurers
is essential for keeping the health care system intact, but it
does mean that the payer must find a balance between
affordability and access to therapy. Following are four
strategies that could help.....


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