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Effective Health Care Program

Data Points #6: Utilization and cost of anticancer biologic products among Medicare beneficiaries, 2006-2009

Research Report

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Note: This report is greater than 5 years old. Findings may be used for research purposes but should not be considered current.

This report is from AHRQ's Data Points Publication Series.

Overview

From 2006 to 2009, over 800,000 Medicare fee-for-service beneficiaries continuously enrolled in Parts A and B had a claim for an anticancer biologic of interest.

Bevacizumab was the most frequently used anticancer monoclonal antibody and its use doubled from 2006 to 2009.

In 2009, the total Medicare reimbursement for all anticancer monoclonal antibodies billed for in Medicare Part B noninstitutional and institutional outpatient settings exceeded $2 billion.

Cancer causes considerable morbidity and mortality in older adults. Of the 1.4 million Americans diagnosed with cancer each year, Medicare covers 61 percent. This proportion will increase to 70 percent by 2030. The overall prevalence of cancer in the Medicare population is estimated to be 17 percent. Therefore, based on 2010 enrollment data, nearly 8 million Medicare beneficiaries have cancer. Further, one in five Medicare beneficiaries will die from cancer, second only to heart disease. Accordingly, Medicare reimburses a major share of total spending on cancer treatment, 45 percent of the estimated $72 billion in costs (in 2004). In 2006, cancer care represented 1 in 10 Medicare fee-for-service (FFS) payments (excluding Part C advantage plans and Part D prescription drug expenditures). Lung, colorectal, prostate, and breast cancers dominated expenditures.

Drugs used in the treatment of cancer account for a large share of Medicare Part B drug expenditures. These expenditures nearly tripled from $3 billion in 1997 to $11 billion in 2004. By contrast, total Medicare expenditures increased 47 percent during the same period. In 2008, five of the six medications accounting for the largest proportion of Part B drug expenditures treated either cancer or potential sequelae of cancer (e.g., anemia). Two of these drugs, rituximab and bevacizumab, are biologics. Limited literature describes Medicare Part D expenditures for cancer treatment, and even less describes expenditures for anticancer biologics. Using 2006 data, the Centers for Medicare & Medicaid Services (CMS) reported on the top 100 Part D drugs with the highest total gross drug costs to prescription drug plans. Imatinib ranked highest among anticancer biologics, at #90. In 2008, CMS reported on the top 10 Part D biologics by cost. Peginterferon alfa-2a ranked highest among anticancer biologics, at #9. Although the Food and Drug Administration (FDA) has labeled peginterferon alfa-2a for use in hepatitis, off-label uses include renal cell carcinoma and chronic myelogenous leukemia.

This brief defines biologics as "therapeutics produced through recombinant deoxyribonucleic acid technology or other biological processes." Synthetic insulin was the first biologic, approved in 1982. Since, biologics have been developed to treat a variety of conditions other than diabetes, such as multiple sclerosis, arthritis, osteoporosis, Crohn's disease, and cancer. As understanding of molecular biology and carcinogenesis has evolved, new anticancer biologics have entered the marketplace. Further, the development pipeline contains numerous biologics that promise novel anticancer therapies.

While some studies have shown that anticancer biologics improve patients' quality of life and clinical outcomes, others have not. Of note, these agents are quite expensive. Annual average treatment costs of biologics can be up to 20 times greater than the costs of non-biologic counterparts. Health care professionals and policymakers have become concerned about (1) the effectiveness of some anticancer biologics, (2) issues of access, management, and ethics in delivering biologics to large-scale patient populations, and (3) cost containment. Quantifying the utilization and costs of anticancer biologics constitutes a necessary preliminary step to addressing these issues and emphasizes the importance of comparative effectiveness research in this area. Such research is especially important given the large number of Medicare beneficiaries with cancer, the significant number treated with anticancer biologics, and the potential toxicities of these therapies. This brief therefore examines utilization and costs of the following classes of anticancer biologics within Medicare Parts A, B, and D claims: monoclonal antibodies, kinase inhibitors, biologic response modifiers, other immunomodulators, other immunosuppressives, and miscellaneous biologic nonblood products. Hematopoietics used for sequelae of cancer (e.g., filgrastim) were not examined.

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