Inadequacies for Cancer Care in Pending Medicare Prescription Drug Legislation.

The chemotherapy provisions of this bill are different than are being described and will seriously compromise cancer care provisions for all American cancer patients.

Inadequate Funding for Drug Payments

For 2004, drug payments would be at 80-85% of the April 1, 2003, AWP. At least some drugs, such as carboplatin and topotecan, cannot currently be obtained by physicians for that amount. Although there is some flexibility for CMS to increase payment amounts in such cases, those increases would not take effect until April 1, 2004, unless CMS has already been notified of the problem. This could lead to an access problem in the first quarter of 2004.

For 2005 and later, drug payments would be 106% of the manufacturer’s average sales price (ASP), where ASP is defined as including the deeply discounted prices paid by hospitals, HMOs, and other large buyers, and ASP does not include the wholesaler markup paid by physicians. The ASPs for drugs are not publicly known, but we have serious doubts that community physicians will be able to purchase drugs for 106% of ASP or less. The ASP system is wholly untested and is based on non-public price information, yet Congress has put it into effect. Again, we have serious concerns about patient access if the reimbursement amount is less than the price of the drug, as it appears will often be the case.

Inadequate Funding for Payments for Drug Administration

The bill would increase payments for drug administration services. There will be a significant increase for 2004, although we cannot calculate the exact amount based on the bill language. According to Congressional estimates, the increase will be about 160%, but even if this figure is correct, it is less than the 200-300% increase that we believe is necessary to cover the costs involved.

For 2005 and later, however, the payments would drop sharply. This decrease is based on the Congress’s assumption that 3% of the drug payment (at 106% of ASP) will be profit to the physician that can be used to pay for practice expenses. This assumption is wholly unwarranted – we have serious doubts whether drugs can be purchased by physicians for even 106% of ASP, and there is no reason to believe that the Medicare payment will be so much higher than the purchase price that 3% will be available to pay for office expenses.

As indicated in a recent ASCO survey, if drug administration payments are not adequate to cover physician costs, many oncologists may limit the number of Medicare patients they see, stop seeing Medicare patients altogether, or take other steps to reduce costs. The result will be reduced patient access to high quality cancer care.

Inadequate Provision of Time for MedPAC Study

The bill provides for a Medicare Payment Advisory Commission study of payment for drugs and drug-related services, but the study and recommendations are not due until January 1, 2006 – long after the large payment reductions have gone into effect. It would be far preferable to have only modest reductions until the study is completed and Congress has had time to act on it.

Editor's Note:
Adequate care for American cancer patients cannot be compromised. If this bill cannot be amended, it must be defeated.
 

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