Recommendation 3. Minimize the contributions of drug costs to financial toxicity for cancer patients and their families.

Patients’ out-of-pocket costs for cancer drugs vary widely depending on a number of factors, such as cancer type, treatment plan, treatment setting, insurance status, and benefit design.1,2 The shift toward high-priced specialty drugs—which include most targeted therapies and immunotherapies—has substantially increased out-of-pocket costs for many patients. For example, average out-of-pocket costs for cancer drugs increased from $450 per month in 2001 to $647 per month in 2011 for nonelderly, privately insured patients, coinciding with an increase in use of targeted cancer drugs.3 These costs are likely to rise in the future with the advent of more immunologic therapies that have potential to be highly effective.

Although drugs are not the most expensive part of cancer care for most patients,1,4 drug costs are a significant concern for patients and their families. A nationally representative survey found that more than 90 percent of Americans think the cost of cancer drugs is too high.5 High out-of-pocket drug expenses can have a detrimental impact on patients’ care and well-being. Several studies of different patient populations have found that those with higher out-of-pocket costs for drugs are less likely to adhere to their treatment regimens.6-10 Patients may decide not to fill their prescriptions, skip doses, or take less drug than prescribed to save money.5,9 Other patients may deplete their savings, incur debt, or forego spending on necessities to pay for their drugs.11,12 Nonadherence to treatment regimens and experiencing significant financial hardship as a result of paying for care are examples of financial toxicity (see Financial Toxicity and Resources and Research Needed to Address Financial Toxicity). Steps should be taken to minimize the contributions of drug costs to financial toxicity for cancer patients and their families.

High-Quality Health Insurance Facilitates Affordable Access to Cancer Drugs

Health insurance—including prescription drug coverage—is a key factor in ensuring that drugs are affordable for cancer patients. Insurance plans negotiate reduced prices for their beneficiaries and usually cover a portion of drug costs. Uninsured patients are responsible for the full cost of their care, potentially leading to much higher out-of-pocket expenses. For example, the estimated patient responsibility for an infusion of gemcitabine—a drug used to treat breast, lung, ovarian, and pancreatic cancers—was $50 for Medicare beneficiaries compared with more than $2,000 for uninsured patients.13 Few patients can afford to pay these prices.

In 2017, over 90 percent of people in the United States had health insurance coverage, more than at any time in the past.14 As health insurance access has expanded, fewer Americans—including those with a history of cancer—report foregoing needed drugs because of cost.15 In addition to improved access to drugs,16 patients with health insurance are more likely to receive recommended screenings, less likely to be diagnosed with late-stage cancer, and more likely to survive after diagnosis.11,17 Future health policies should support and expand, not undermine, this progress. All Americans should have the opportunity to purchase reasonably priced, high-quality health insurance with prescription drug coverage to facilitate affordable access to cancer drugs. Limiting access to potentially lifesaving drugs could have devastating, possibly life-threatening consequences for cancer patients.

Patients’ Out-of-Pocket Expenses Should Be Limited to Minimize Financial Toxicity Caused by Cancer Drug Costs

As drug prices have increased, payers have shifted costs to patients through various cost-sharing mechanisms. An increasing number of plans are charging coinsurance—which is a percentage of a drug’s cost—rather than fixed copayments for prescription drugs. Coinsurance rates have increased in recent years, and many cancer drugs—including some generics—are placed on specialty tiers with higher rates of coinsurance.18-21 Drug prices also have contributed to insurance premium increases—about 14 percent of premium increases in 2017 were attributed to drugs.22 Increased cost-sharing has led to higher rates of underinsurance—defined as high out-of-pocket costs relative to income—among people with health insurance.23 Cost-sharing is an appropriate way to encourage judicious use of healthcare services (Recommendation 1), but it should not interfere with access to appropriate treatment or cause significant financial hardship. To protect people from excessive out-of-pocket costs, all public and private insurance plans should include out-of-pocket spending limits.

Many insurance plans already limit patients’ out-of-pocket expenses. Since 2014, all commercial insurance plans have been subject to annual out-of-pocket spending limits under the Affordable Care Act. Costs contributing to out-of-pocket maximums include deductibles, coinsurance, copayments, and other similar charges.24 For the 2018 plan year, out-of-pocket limits cannot exceed $7,350 for individuals and $14,700 for family plans (actual out-of-pocket limits vary by plan and are often lower than required).25,26 Cost-sharing subsidies paid by the federal government reduce out-of-pocket limits for low- and moderate-income individuals and families who purchase plans through the health insurance exchanges.27 Though out-of-pocket caps will not protect all patients from financial toxicity, they undoubtedly provide relief to many people facing cancer diagnosis and treatment.28 The Panel agrees with the American Cancer Society Cancer Action Network29 that limits on out-of-pocket spending should be maintained to help protect cancer patients from financial toxicity caused by costs of drugs and other components of care.

There are no out-of-pocket spending limits for most beneficiaries of Medicare Part D, Medicare’s prescription drug benefit plan.* Part D covers most orally administered cancer drugs, which account for a rapidly growing proportion of cancer drug costs.30 Unsubsidized Part D beneficiaries being treated with targeted oral cancer drugs paid an average of $810 per month out-of-pocket in 2012.31 Although this is lower than patients’ costs in earlier years (due to the closing of the coverage gap),** it may cause financial hardship for many patients.

A growing number of Part D beneficiaries are reaching the catastrophic threshold,32** in part because of the increased availability and use of high-priced drugs.33 Once this threshold is reached, patients are required to pay 5 percent of the price of their drugs.32 Costs can add up quickly, particularly for patients who must take specialty drugs for months or years. Some patients may face out-of-pocket costs of nearly $12,000 per year for one drug.34 The Panel agrees with the National Academies of Sciences, Engineering, and Medicine and the Medicare Payment Advisory Commission that Medicare Part D should eliminate cost-sharing for patients above the catastrophic threshold.35,36 Out-of-pocket spending limits may result in higher premiums for all Medicare beneficiaries or increased cost-sharing before out-of-pocket limits are reached. However, this scenario is preferable to imposing unlimited costs on patients dealing with serious diseases like cancer.

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