C O N T E M P O R A RY S U B J E C T
`
`Pharmacy Benefit Spending on Oral Chemotherapy Drugs
`
`FREDERIC R. CURTISS, PhD, RPh, CEBS
`
`ABSTRACT
`
`BACKGROUND: Pharmacy benefits have historically excluded injectable drugs,
`resulting in coverage of injectable drugs under the medical benefit. High-cost
`biologics and other new drug therapies are often injectables and therefore have
`not presented cost threats to pharmacy benefits. The U.S. Food and Drug
`Administration approval of capecitabine, an oral form of fluorouracil, in 1998,
`and imatinib mesylate in oral dose form for chronic myeloid leukemia, in 2001,
`signaled a new period in budget forecasting for pharmacy benefits, particularly
`for small, self-insured employers for whom a drug with a cost of $25,000 per
`year of therapy for 1 patient could increase total pharmacy benefit costs by
`10% or more.
`OBJECTIVE: To quantify the actual relative costs of the oral chemotherapy
`drugs in pharmacy benefits in 2006 and identify the history of spending on
`oral chemotherapy drugs relative to total pharmacy benefit spending for small,
`self-insured employers over the 4.5 years through May 2006.
`METHODS: Administrative pharmacy claims from the database of a pharmacy
`benefits manager (PBM) for approximately 500,000 members of small, self-insured
`employer plans were used to calculate the net plan cost of oral chemotherapy
`drugs relative to total drug benefit costs for the period January 1, 2002, through
`May 31, 2006. Current costs for oral chemotherapy drugs for small employers
`were compared with an insured health plan of approximately the same number
`of members for dates of service January 1, 2006, through May 31, 2006.
`RESULTS: This descriptive analysis found that oral chemotherapy drugs repre-
`sented 0.27% of total drug benefit costs, or approximately $0.08 per member per
`month (PMPM) for small, self-insured employers in 2002, rising linearly to 0.73%,
`or approximately $0.24 PMPM in the first 5 months of 2006. Members in pharmacy
`benefit plans sponsored by small employers paid an average 6.9% cost share for
`oral chemotherapy drugs in 2006, nearly identical to the average 8.5% paid by
`members of an insured health plan of similar size in total membership, versus
`26.9% average cost share for all drugs. Imatinib mesylate accounted for 45% of
`total spending on oral chemotherapy agents in 2002 versus 40% in 2006.
`CONCLUSION: Spending on oral chemotherapy drugs as a proportion of total
`pharmacy benefit costs has more than doubled, from about 0.3% in 2002 to 0.7%
`in 2006. For small, self-insured employers, this represents a nearly 3-fold increase
`in spending, from about $0.08 PMPM in 2002 to about $0.24 PMPM in 2006.
`KEYWORDS: Pharmacy benefits, Budget forecasting, Chemotherapy drugs, Drug
`costs
`JManag CarePharm.2006;12(7):570-77
`
`Author
`
`FREDERIC R. CURTISS, PhD, RPh, CEBS, is editor-in-chief, Journal of
`Managed Care Pharmacy, Academy of Managed Care Pharmacy, Alexandria,
`Virginia.
`
`AUTHOR CORRESPONDENCE: Frederic R. Curtiss, PhD, RPh, CEBS,
`Editor-in-Chief, Journal of Managed Care Pharmacy, Academy of Managed
`Care Pharmacy, 100 North Pitt St., Suite 400, Alexandria, VA 22314.
`Tel: (830) 935-4319; Fax: (703) 683-8417; E-mail: fcurtiss@amcp.org
`
`Copyright© 2006, Academy of Managed Care Pharmacy. All rights reserved.
`
`570 Journal of Managed Care Pharmacy JMCP September 2006
`
`Vol. 12, No. 7 www.amcp.org
`
`T
`
`he U.S. Food and Drug Administration (FDA) approved
`lenalidomide (Revlimid), an analogue or derivative of
`thalidomide, on June 29, 2006, for use in combination
`with dexamethasone in patients with multiple myeloma who
`have received 1 prior therapy.1 Its manufacturer immediately
`made headline news by announcing that it would price the
`chemotherapy agent at $6,195 per month, which extrapolates
`to a drug cost in excess of $74,000 per patient per year of
`therapy.2 This was not lenalidomide’s first approval, however.
`The FDA had approved it on December 27, 2005, for the treat-
`ment of transfusion-dependent anemia due to myelodysplastic
`syndrome (MDS); for that indication, it was dosed at 10 mg per
`day with downward dose adjustment for patients experiencing
`thrombocytopenia.3 The manufacturer’s pricing structure appeared
`different for the 2 indications.
`When the FDA approved the second indication, lenalido-
`mide’s average price per patient per year increased by about
`35%, from $55,000 for 12 months of therapy for anemia associated
`with MDS to $74,000 per patient per year for the second, more
`common indication, multiple myeloma. While the dose for
`multiple myeloma is 25 mg per day (two-and-one-half times
`higher than the starting MDS dose), some Wall Street analysts
`criticized the pricing of lenalidomide for multiple myeloma
`because (a) its annual cost far exceeds that of other antineoplastic
`agents, (b) its production costs should be lower since it is not a
`biologic agent and is an oral as opposed to an injectable
`dosage form, and (c) excessive pricing would likely invoke
`Congressional scrutiny due to its potential financial impact on
`Medicare and Medicaid programs.1
`
`■■ Capecitabine Marks New Era of Oral Antineoplastics
`A few oral antineoplastics have been available for decades; most
`of these have been relatively inexpensive. The new world
`of high-cost oral chemotherapy began in the United States
`when the FDA approved capecitabine (Xeloda), an oral form of
`fluorouracil, on April 30, 1998, for the treatment of advanced
`breast cancer resistant to paclitaxel in combination with
`(Table 1). Three years
`an anthracycline such as doxorubicin4
`later, and despite the fact that “cancer” is a collection of
`diverse diseases, results from clinical trials of imatinib
`mesylate triggered hopes that not only was a cure for cancer
`possible but also that the treatment could be administered by
`mouth.
`
`Imatinib Mesylate
`At the annual meeting of the American Society of Hematology
`in early 2001, the results from three phase 3 clinical trials were
`presented for STI571, a tyrosine kinase inhibitor. One clinical
`CELGENE 2076
`APOTEX v. CELGENE
`IPR2023-00512
`
`

`

`TABLE 1
`
`Generic Name
`
`Mercaptopurine
`
`Thioguanine
`
`Capecitabine
`
`Imatinib mesylate
`
`Gefitinib
`
`Erlotinib
`
`Sorafenib
`
`Sunitinib malate
`
`Thalidomide
`
`Brand Name
`
`Purinethol
`
`Tabloid
`
`Xeloda
`
`Gleevec
`
`Iressa
`
`Tarceva
`
`Nexavar
`
`Sutent
`
`Thalomid
`
`FDA Approval
`
`Indication
`
`September 11, 1953
`
`Multiple neoplasms
`
`January 18, 1966
`
`Multiple neoplasms
`
`April 30, 1998
`
`May 10, 2001
`
`May 5, 2003
`
`November 18, 2004
`
`Breast cancer; colorectal cancer
`
`Chronic myeloid leukemia
`
`Advanced non-small cell lung cancer (NSCLC)
`
`Non-small cell lung cancer (NSCLC); pancreatic cancer
`(approved November 2, 2005)
`
`December 20, 2005
`
`Advanced renal cell carcinoma
`
`January 26, 2006
`
`GI stromal tumor; advanced renal cell carcinoma
`
`May 26, 2006†
`
`Multiple myeloma—in combination with dexamethasone,
`for the treatment of patients with newly diagnosed multiple
`myeloma
`
`Chronic, accelerated, or myeloid or lymphoid blast phase
`chronic myeloid leukemia; Philadelphia chromosome-positive
`acute lymphoblastic leukemia
`
`In combination with dexamethasone for the treatment of
`multiple myeloma patients who have received at least
`1 prior therapy
`
`Pharmacy Benefit Spending on Oral Chemotherapy Drugs
`
`Selected Oral Chemotherapy Drugs* Used in Outpatient Pharmacy Benefits in 2006
`
`Dasatinib
`
`Sprycel
`
`June 28, 2006
`
`Lenalidomide
`
`Revlimid
`
`June 29, 2006‡
`
`* These drugs are identified by Medi-Span Generic Product Indicator (GPI) beginning with 2153, or 9939 or 2130 (except not GPI beginning with 213000501
`[methotrexate], which is standard treatment for several indications, including rheumatoid arthritis and psoriasis, in addition to use as an antineoplastic agent).
`† Thalidomide previously approved by the FDA on July 16, 1998, for acute and maintenance therapy for erythema nodosum leprosum.
`‡ Lenalidomide previously approved by the FDA on December 27, 2005, for the treatment of patients with transfusion-dependent anemia due to low- or inter-
`mediate-1 risk MDS associated with a del 5q cytogenetic abnormality with or without additional cytogenetic abnormalities.
`FDA = U.S. Food and Drug Administration; GI = gastrointestinal; MDS = myelodysplastic syndrome.
`
`trial involved 500 chronic phase patients with chronic
`myelogenous leukemia (CML) who had failed to respond to
`interferon therapy. CML is characterized by translocation of
`chromosome material from chromosome 9 to chromosome
`22 with formation of the so-called Philadelphia chromosome.
`After 6 months, greater than 90% of STI571-treated patients
`had white cell counts return to normal range and half had a
`significant reduction of Philadelphia chromosome-positive
`cells.5 In a second study of 154 CML patients who had received
`STI571 for at least 1 month, 78% had a hematology response
`and 14% (22 patients) experienced disease remission. A third
`trial involving 94 patients in blast crisis (end-stage CML)
`showed a 47% response rate after 2 months of therapy with
`STI571. The researchers speculated that the combination of
`STI571 and cytosine arabinoside (Ara-C) or interferon could
`one day produce a cure for CML. Stem cell (bone marrow)
`transplant remains the only known cure for CML.6
`The manufacturer sought fast-track approval in Europe and
`the United States, describing STI571 as a “smart” drug that
`disables only the abnormal protein that causes CML without
`affecting normal cells. In March 2001, STI571 was expected to
`be approved by the FDA as early as fall 2001.7 In fact, the FDA
`
`approved STI571 (imatinib mesylate) in May 2001, just
`3 months after the fast-track approval request, with a
`proprietary name change from the already-approved European
`name Glivec to Gleevec.8
`The manufacturer marketed imatinib mesylate in June 2001
`at an initial $19.68 average wholesale price (AWP) per 100 mg
`capsule, resulting in an annual cost in the range of $29,000 to
`$57,500 per patient when dosed in the recommended range of
`400 mg to 800 mg per day. Nine months later, the FDA
`approved imatinib mesylate for the additional indication of
`inoperable or metastatic malignant gastrointestinal stromal
`tumors (GIST).9 The GIST indication represented a significant
`advance in pharmacological treatment: until then, GIST had
`responded extremely poorly to polychemotherapy, and patients
`with inoperable GIST had extremely poor prognoses. Imatinib
`mesylate became the first effective treatment for GIST.10
`Imatinib mesylate is now approved for the treatment of
`patients with all 3 stages of CML—myeloid blast crisis, accelerated
`phase, and chronic phase—either before or after other therapy,
`and GIST.11 Its dosage form has been redesigned for patient
`convenience, and it is now available as 100 mg scored tablets
`and 400 mg tablets.
`
`www.amcp.org Vol. 12, No. 7 September 2006 JMCP Journal of Managed Care Pharmacy 571
`
`

`

`Pharmacy Benefit Spending on Oral Chemotherapy Drugs
`
`FIGURE 1
`
`Proportion of Total Pharmacy Benefit
`Spending for Oral Chemotherapy Drugs
`
`1.0%
`
`0.9%
`
`0.8%
`
`0.7%
`
`0.6%
`
`0.5%
`
`0.4%
`
`0.3%
`
`0.2%
`
`0.1%
`
`0.0%
`
`0.56%
`
`0.60%
`
`0.73%
`
`0.36%
`
`0.27%
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`Thalidomide is excluded from these data since the drug was not approved for
`a cancer indication until May 26, 2006; summary data for claims with dates
`of service from January 1, 2002, through May 31, 2006, for more than 2,000
`small, self-insured employers.
`
`Gefitinib
`On May 5, 2003, the FDA approved gefitinib (Iressa) for treat-
`ment of non-small cell lung cancer (NSCLC), dosed as a 250 mg
`tablet with or without food; higher doses do not improve
`response but do increase toxicity.12 Two large trials involving
`2,130 chemotherapy-naïve patients with stage III and IV
`NSCLC showed that gefitinib failed to improve tumor response
`rates, time to progression, or overall survival, when dosed at
`either 250 mg or 500 mg per day in combination with platinum-
`based chemotherapy regimens. The chemotherapies given in these
`first-line trials were gemcitabine and cisplatin (n = 1,093) or
`carboplatin and paclitaxel (n=1,037). Subsequent to the release of
`the findings from these 2 large clinical trials, the FDA asked the
`manufacturer to relabel gefitinib to restrict it to monotherapy
`for treatment of patients with locally advanced or metastatic
`NSCLC after failure of both platinum-based and docetaxel
`chemotherapies.13 On June 17, 2005, the FDA approved new
`labeling for gefitinib for use only in patients who have demon-
`strated benefit from receipt of the drug.14 As part of the new
`labeling, distribution of gefitinib is restricted under a risk
`management plan called the Iressa Access Program. Gefitinib’s
`effectiveness had been determined from objective response
`rates, and no controlled trials have demonstrated clinical benefit
`(e.g., improved disease-related symptoms or increased survival).
`Off-label use of gefitinib includes treatment of squamous cell head
`and neck cancer.
`
`tyrosine kinase associated with the epidermal growth factor
`receptor (EGFR), and further work is under way to completely
`characterize its mechanism of action.15 Like gefitinib, erlotinib is
`approved as monotherapy for patients with locally advanced or
`metastatic NSCLC after failure of at least 1 prior chemotherapy
`regimen. It is not approved, however, for first-line therapy, since
`2 multicenter, placebo-controlled, randomized, phase 3 trials
`showed no clinical benefit when erlotinib was combined with
`platinum-based chemotherapy (carboplatin and paclitaxel, or
`gemcitabine and cisplatin) as first-line treatment of patients
`with locally advanced or metastatic NSCLC.16 On November 2,
`2005, the FDA approved the second indication for locally
`advanced, unresectable, or metastatic pancreatic cancer in
`combination with gemcitabine.17 Unlike gefitinib, erlotinib’s
`effectiveness has been proven in randomized, controlled trials.18
`
`Sorafenib and Sunitib Malate
`The FDA approved 2 additional oral agents, sorafenib (Nexavar)
`on December 20, 2005,19 and sunitinib malate (Sutent) on
`Sorafenib, a multikinase inhibitor that
`January 26, 2006.20
`decreases tumor cell proliferation, was approved for advanced
`renal cell carcinoma (RCC). Dose instructions include expected
`skin toxicity and consequent dose reductions to 50% or 25% of
`the initial recommended dose of 400 mg (two 200 mg tablets)
`twice daily. 21 Sunitinib malate, which inhibits multiple receptor
`tyrosine kinases, was approved for GIST after disease progression
`or imatinib mesylate intolerance. Concurrent FDA approval for
`the indication RCC was based on partial response rates and
`duration of responses since there are no randomized trials
`of sunitinib malate demonstrating clinical benefit, such as increased
`survival or improvement in disease-related symptoms in RCC.22
`
`Thalidomide
`On May 26, 2006, the FDA approved thalidomide (Thalomid)
`under expedited review for the indication of newly diagnosed
`multiple myleoma patients in combination with dexamethasone.23
`Despite a preapproval, U.S. market withdrawal decades earlier
`for teratogenicity identified in postapproval European markets,
`thalidomide had been reintroduced to the U.S. market on July
`16, 1998, when the FDA approved an indication for erythema
`nodosum leprosum (ENL; a complication of leprosy).24
`Thalidomide’s wide range of off-label uses include treatment of
`graft-versus-host disease after bone marrow transplantation,
`refractory multiple myeloma, primary brain tumors, appetite
`stimulant for cachexia in advanced cancer or human immuno-
`deficiency virus (HIV)/acquired immunodeficiency syndrome
`(AIDs), aphthous ulcers, and prostate cancer in combination
`with docetaxel.25
`
`Erlotinib
`Erlotinib (Tarceva) was first approved by the FDA on November
`18, 2004. Erlotinib inhibits intracellular phosphorylation of
`
`Dasatinib
`The FDA approved dasatinib (Sprycel) on June 28, 2006, for
`use in the treatment of adults with chronic phase, accelerated
`
`572 Journal of Managed Care Pharmacy JMCP September 2006 Vol. 12, No. 7 www.amcp.org
`
`

`

`Pharmacy Benefit Spending on Oral Chemotherapy Drugs
`
`phase, or myeloid or lymphoid blast phase CML with resistance
`or intolerance to prior therapy, including imatinib mesylate.26
`The expedited approval requires additional follow-up data to be
`converted to regular approval by the FDA. The FDA granted
`regular approval to dasatinib for use in the treatment of adults
`with Philadelphia chromosome-positive acute lymphoblastic
`leukemia with resistance or intolerance to prior therapy.
`
`Lenalidomide
`The first FDA approval of lenalidomide was on December 27,
`2005, for myelodysplastic syndrome (MDS), characterized by
`hyperactive bone marrow but low blood cell counts.27 While the
`colony-stimulating factors such as filgrastim are used off-label
`for MDS, lenalidomide is the only oral drug approved by the
`FDA for MDS. Other drugs for MDS are injectables such as azac-
`itidine (Vidaza), approved by the FDA on May 19, 2004.28 The
`Myelodysplastic Syndromes Foundation, sponsored by the
`manufacturers of drugs for MDS, includes on its Web site
`patient information for Medicare Part D and a Web link to find
`drug formulary coverage for MDS chemotherapy.29
`
`■■ Methods
`The present study was precipitated in part by the pharmaco-
`economic work by Ramsey et al. who earlier this year found a
`seemingly small budget impact from the coverage of erlotinib as
`a formulary drug, for 1 indication, NSCLC.30 The estimated
`budget impact of $0.01 per member per month in a hypothetical
`health plan of 500,000 members could be consequential in
`a small employer health plan of 500 members, particularly if the
`pharmacy benefit is self-insured. Second, 5 new FDA approvals
`for high-cost oral chemotherapy drugs in 7 months through
`June 30, 2006, creates the need for descriptive, benchmark
`analysis of the actual direct pharmacy benefit costs for oral
`chemotherapy drugs.
`Data for this study were obtained from 2 sources: the admin-
`istrative pharmacy claims in the database of a pharmacy benefits
`manager (PBM) for approximately 500,000 members from more
`than 2,000 small, self-insured employers (2 to 5,000 members
`each) and an insured health plan with approximately 520,000
`members. The PBM serves members nationwide, and the
`insured health plan is located in the southern United States.
`The net plan cost of oral chemotherapy drugs relative to
`total drug benefit costs was calculated for the period from
`January 1, 2002, through May 31, 2006, for the small employer
`drug plans. Current costs in 2006 for oral chemotherapy drugs
`for small employers were compared with the insured health plan
`for dates of service from January 1, 2006, through May 31, 2006.
`These oral chemotherapy drugs were identified by Medi-Span
`Generic Product Indicator (GPI) starts with 2153 or 9939 or
`2130 (except not GPI starts with 213000501 [methotrexate,
`which has indications such as rheumatoid arthritis and psoriasis
`in addition to use as a antineoplastic agent]), and all but oral
`
`FIGURE 2
`
`Small Employer Cost Per Member Per
`Month for Oral Chemotherapy Drugs
`
`$0.50
`
`$0.40
`
`$0.30
`
`$0.20
`
`$0.10
`
`$0.00
`
`$0.19
`
`$0.17
`
`$0.24
`
`$0.11
`
`$0.08
`
`2002
`
`2003
`
`2004
`
`2005
`
`2006
`
`Thalidomide is excluded from these data since the drug was not approved for
`a cancer indication until May 26, 2006; summary data for claims with dates
`of service from January 1, 2002, through May 31, 2006 for more than 2,000
`small, self-insured employers.
`
`FIGURE 3
`
`Average Member Cost Share* Over 5
`Years for Beneficiaries of Small Employers
`Pharmacy Benefit Plans for Oral
`Chemotherapy Drugs Versus All Drugs
`
`50%
`
`40%
`
`30%
`
`20%
`
`10%
`
`0%
`
`2002
`
`2003
`
`2004
`
`2006
`
`Overall Cost Share for All Drugs
`
`Oral Chemotherapy Cost Share
`
`* Member cost share is the sum of all out-of-pocket costs at the point of service,
`including pharmacy benefit deductibles, benefit maximums, copayments,
`and coinsurance.
`
`dose forms were excluded.
`Drug cost is defined from the payer perspective as the
`allowed charge less the member cost share (sum of deductibles,
`copayments, and coinsurance); hence, unless otherwise noted,
`drug cost is the net plan cost after subtraction of member cost
`share. Allowed charge is the sum of the allowed (discounted)
`drug ingredient cost plus the allowed pharmacy professional
`fee. Days of drug therapy is the sum of the days supply submitted
`
`www.amcp.org Vol. 12, No. 7 September 2006 JMCP Journal of Managed Care Pharmacy 573
`
`

`

`Pharmacy Benefit Spending on Oral Chemotherapy Drugs
`
`FIGURE 4
`
`Distribution of Cost by Oral
`Chemotherapy Drug for Small
`Self-Insured Employers in 2006*
`
`Thalidomide is excluded from these data since the drug was not approved for
`a cancer indication until May 26, 2006; summary data for claims with dates
`of service from January 1, 2002, through May 31, 2006 for more than 2,000
`small, self-insured employers.
`
`FIGURE 5
`
`Distribution of the Costs for
`Oral Chemotherapy Drugs for
`an Insured Health Plan in 2006*
`
`* Pharmacy claims with dates of service from January 1, 2006, through
`May 31, 2006.
`
`on pharmacy claims. The PBM database includes mail-service
`and community pharmacy claims. During the time period of
`this study, from January 1, 2002, through May 31, 2006, mail-
`service pharmacy accounted for 5% to 7% of all pharmacy
`claims and 15% to 23% of total net plan (payer) cost. Pharmacy
`claims are aggregated by date of service, and all resource
`utilization and costs are reported net of claim reversals and
`adjustments.
`
`■■ Results
`Oral chemotherapy drugs represented approximately 0.27% of
`total drug benefit costs in 2002, rising in a nearly linear manner
`
`over a 5-year period to 0.73% in 2006 (Figure 1). Net plan cost
`PMPM, after subtraction of member cost share, was approxi-
`mately $0.08 in 2002 and approximately $0.24 PMPM in the
`first 5 months of 2006 (Figure 2). Due to dollar copayments as
`the predominant structure for member cost sharing in pharmacy
`benefit plans of small, self-insured employers during this time
`period and the relatively high cost for oral chemotherapy drugs,
`the average member cost share for oral chemotherapy drugs was
`about one third that for all drugs over this 4.5-year period Figure
`3). In the first 5 months of 2006, the average member cost share
`for oral chemotherapy drugs was 6.9% for beneficiaries in
`pharmacy benefit plans sponsored by small employers versus an
`average 8.5% for the comparison insured health plan of similar
`total membership (data not shown).
`Imatinib mesylate accounted for 45% of total spending on
`oral chemotherapy agents for small employers in 2002 versus
`40% in 2006 (Figure 4). Despite market availability for only a
`few months in 2006, erlotinib accounted for 18% of the net cost
`of oral chemotherapy drugs, followed by capecitabine at 14%;
`among the other oral chemotherapy drugs, each accounted for
`less than 10% of total spending. The distribution of spending
`among the oral chemotherapy agents was similar for the insured
`health plan, with the exception of gefitinib which, unlike the
`small employers, had some utilization at 3% of total spending
`(Figure 5), accounting for approximately $0.01 PMPM (Table 2).
`The actual price of the oral chemotherapy drugs in the first
`5 months of 2006 is derived from the average allowed charge
`per day of therapy multiplied by 30 to obtain a standardized
`price per 30-day supply, prior to subtraction of the member cost
`share. Lenalidomide and sunitinib malate had the highest average
`allowed charge per 30-day supply, approximately $7,000 for
`each (Figure 6). The average allowed charge per 30-day supply
`for the 3 highest-expenditure oral chemotherapy drugs was
`$3,015 for imatinib mesylate, representing approximately 40%
`of total spending; $2,864 for erlotinib (18% of total spending);
`and $2,127 for capecitabine (14% of total spending).
`
`■■ Discussion
`Prior to the market introduction of capecitabine and imatinib,
`chemotherapy agents were either relatively low-cost oral drugs
`or injectable drugs. The relatively low-cost oral chemotherapy
`drugs included mercaptopurine (6-MP, Purinethol), and
`thioguanine, both approved before 1967. High-cost chemotherapy
`drugs such as trastuzumab (Herceptin; initially approved by the
`FDA on September 25, 199731), bevacizumab (Avastin;
`approved for metastatic colon cancer February 26, 2004), and
`cetuximab (Erbitux; approved for metastatic colon cancer,
`February 12, 2004) are available as injectable dosage forms only.
`All of these have had either indications added to their approved
`package labeling or will have in the near future.
`While the present impact on outpatient pharmacy budgets is
`still relatively small, oral antineoplastic agents are associated
`
`574 Journal of Managed Care Pharmacy JMCP September 2006 Vol. 12, No. 7 www.amcp.org
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`

`

`Pharmacy Benefit Spending on Oral Chemotherapy Drugs
`
`with a host of attractive features that guarantee the commitment
`of research funding and market introduction of more oral
`agents. Obvious reasons for the preference of oral dose forms
`over injectable dose forms include ease of administration,
`patient preference, and lower risk of complications compared
`with injectable drugs, particularly intravenous administration.32
`Less obvious reasons include the lower cost of administration,
`(e.g., the direct costs in medical professional time, medical sup-
`plies, and intravenous pumps) and the indirect costs associated
`with travel time to medical facilities and caregiver time. Oral agents
`may have fewer side effects with the possibility of improved toler-
`ance and adherence to therapy.33 However, adherence to therapy is
`not necessarily assured with oral chemotherapy agents,34 and
`the cost of production is not necessarily lower.35
`A drug like erlotinib, with an average charge per year of
`therapy of approximately $35,000 for 1 patient and a net cost
`after member cost share of $34,000 or more, can increase net
`pharmacy benefit costs by more than 15%, or $5.67 PMPM, for
`a small self-insured employer with 500 enrolled members. The
`matter of financial budget impact on a large health plan was
`posed by Ramsey et al. in mid-2006.30 The authors used a
`pharmacoeconomic model to predict the budget impact of
`erlotinib on a hypothetical third-party payer with 500,000
`enrolled members. When used according to the FDA-approved
`label indications as second-line or third-line therapy for
`NSCLC, they estimated that the incremental cost of placing
`erlotinib on the drug formulary would be less than $0.01
`PMPM. This pharmacoeconomic work suggests a minimal and
`insignificant budget impact for a 500,000-member health plan.
`However, the actual cost effects could be different since (a) the
`assumed reductions in chemotherapy-related infusion costs
`may or may not be realized, and (b) costs associated with
`adverse events may be either over- or under-reported in the
`actual medical and pharmacy claims data.
`From a silo-perspective in cost management, a predominant
`business perspective in 2006, including the focus on quarterly
`financial results for the enterprise and its individual departments
`and cost centers, the immediate effect on departmental (benefit)
`costs is important. This present research suggests that prior to
`consideration of potential offsetting costs, the direct drug benefit
`costs for erlotinib in 2006 are approximately $0.04 PMPM,
`approximately 5 times higher than the cost identified in the
`research by Ramsey et al. This 5-fold discrepancy suggests a
`need to validate the pharmacoeconomic modeling with actual
`health plan data for pharmacy and other medical costs.
`The most likely source of the cost discrepancy is the focus
`by Ramsey et al. on only 1 of erlotinib’s 2 approved indications.
`In ignoring erlotinib’s approval for first-line treatment of
`patients with locally advanced, unresectable, or metastatic
`pancreatic cancer when used in combination with gemcitabine
`the budget forecast model is not a budget forecast
`(Gemzar),36
`model for the drug but for the drug for a specific indication.
`
`TABLE 2
`
`Pharmacy Benefit Costs for Oral
`Chemotherapy Drugs in 2006*
`
`Small Employers
`
`Insured Health Plan
`
`Net Plan Cost
`PMPM ($)
`
`% Total
`
`Net Plan Cost
`PMPM ($)
`
`% Total
`
`0.10
`
`0.04
`
`0.03
`
`0.02
`
`0.02
`
`0.02
`
`0.00
`
`0.01
`
`<0.01
`
`0.24
`
`40
`
`18
`
`14
`
`9
`
`8
`
`7
`
`0
`
`4
`
`<1
`
`0.12
`
`0.09
`
`0.07
`
`0.03
`
`0.05
`
`0.05
`
`0.01
`
`NA
`
`NA
`
`0.42
`
`30
`
`21
`
`16
`
`7
`
`13
`
`11
`
`3
`
`–
`
`–
`
`Generic Name
`
`Imatinib mesylate
`
`Erlotinib
`
`Capecitabine
`
`Lenalidomide
`
`Sunitinib
`
`Sorafenib
`
`Gefitinib
`
`Mercaptopurine
`
`Purinethol
`
`Total
`
`* These drugs are identified by Medi-Span Generic Product Indicator (GPI)
`beginning with 2153, or 9939 or 2130 (except not GPI beginning with
`213000501 [methotrexate], which is standard treatment for several indications,
`including rheumatoid arthritis and psoriasis, in addition to use as an anti-
`neoplastic agent), for dates of service from January 1, 2006, through May 31, 2006.
`NA = data not available; PMPM = per member per month.
`
`FIGURE 6
`
`Average Charge per 30-Day Supply* in
`2006 and Distribution of Spending for
`the High-Cost Oral Chemotherapy Drugs
`for Small Self-Insured Employers
`
`$7,083
`
`$6,896
`
`39.6%
`
`$4,646
`
`$3,015
`
`18.1%
`
`$2,864
`
`14.2%
`
`$2,127
`
`8.6%
`
`7.7%
`
`6.9%
`
`Lenalidomide
`
`Sunitinib
`
`Sorafenib
`
`Imatinib
`
`Erlotinib
`
`Capecitabine
`
`Charge per 30-Day Supply
`
`% Total Spending for Class
`
`Allowed charge is discount pricing, comprising allowed ingredient cost and
`pharmacist professional fee, before subtraction of member cost share, for
`claims with dates of service in 2006 through May 31; from a PBM database
`for more than 2,000 small, self-insured employers.
`PBM= pharmacy benefits manager.
`
`www.amcp.org Vol. 12, No. 7 September 2006 JMCP Journal of Managed Care Pharmacy 575
`
`

`

`Pharmacy Benefit Spending on Oral Chemotherapy Drugs
`
`A portion of the cost difference could also be attributable to
`off-label use, a factor for erlotinib and the other oral chemotherapy
`agents as it is for all drugs. For erlotinib, off-label use includes
`treatment of squamous cell head and neck cancer.
`
`Limitations
`This analysis was intended to be descriptive, focusing on the
`direct financial effects of oral chemotherapy drugs on pharmacy
`benefit costs. Cost-benefit analysis was beyond the objective
`and scope of this research. Analysis of the cost per outcome is
`information that is needed. For example, one of the 2 clinical
`trials used to seek FDA approval for the multiple myeloma
`indication for lenalidomide showed that median time to
`progression of disease was increased approximately 17 weeks,
`from 19.9 weeks in the dexamethasone group to 37.1 weeks in
`the lenalidomide plus dexamethasone group.1 In addition to the
`drug cost in excess of $6,000 per month, the cost in terms of
`side effects was large, with a greater proportion of patients
`experiencing serious side effects such as febrile neutropenia and
`deep vein thrombosis (DVT) in the lenalidomide + dexamethasone
`group compared with the dexamethasone group alone. The
`incidence of thrombotic events such as DVT, pulmonary
`embolism (PE), and intracranial venous sinus thrombosis was
`12% in the lenalidomide + dexamethasone versus 4% in the
`dexamethasone group. The “black-box” warning on the label of
`lenalidomide includes the potential for birth defects; hemato-
`logic toxicity, including neutropenia and thrombocytopenia;
`and DVT and PE.37 Results in the willingness-to-pay research
`suggests that patients with NSCLC and healthy subjects are
`willing to pay a median of $100 CAD per month of therapy with
`an oral epidermal growth factor receptor tyrosine kinase
`inhibitor such as erlotinib,38
`less than 5% of the actual price of
`the drug in the present study.
`Others have posed the question of the value of the outcomes
`obtained for the rapidly escalating cost of chemotherapy
`regimens. Schrag compared the costs of various drug therapy
`regimens for metastatic colorectal cancer following FDA
`approval in February 2004 of the monocolonal antibodies
`bevacizumab (Avastin, targeting vascular endothelial growth
`factor) and cetuximab (Erbitux, targeting epithelial growth
`factor receptor) for use in conjunction with cytotoxic drug
`regimens.39 Calculated at 95% of the average wholesale price in
`May 2004, 8 weeks of the Mayo Clinic regimen of monthly
`bolus of fluorouracil plus leucovorin cost $63 versus $304 for
`a weekly bolus of fluororacil plus leucovorin (Roswell Park
`regimen) or $263 for biweekly fluorouracil plus leucovorin in a
`48-hour infusion (LVSFU2 regimen). Adding either irinotecan
`(FOLFIRI) or oxaliplatin (FOLFOX) to LVSFU2 increased the
`initial 8-week cost to $9,381 or $11,889, respectively. The addition
`of bevacizumab to FOLFIRI or FOLFOX increased the 8-week
`cost in 2004 dollars to about $21,000, and cetuximab added to
`either irinotecan or FOLFIRI resulted in an 8-week cost of
`
`approximately $30,700. The