Steven Cohen

Journal of Undergraduate Research
Volume 5, Issue 6 - March 2004

Benefits of Extending Medicare Coverage to All Oral Anti-Cancer Drugs

Steven Cohen

INTRODUCTION

Cancer is the second leading cause of morbidity and mortality in the United States, exceeded only by heart disease. The American Cancer Society estimates that a little less than 1 in 2 men and a little more than 1 in 3 women have a lifetime risk of developing some type of cancer. In 2003, about 1,334,100 new cancer cases were expected to be diagnosed, while about 556,500 Americans were expected to die – more than 1,500 people a day (1).

The National Heart, Lung, and Blood Institute estimates that the direct and indirect costs of cancer in the year 2003 will reach $189.5 billion (2). However, using a flat-line forecasting approach, cancer costs over the next ten years are projected to exceed $3.4 trillion¹ (Table 1).

Table 1 Projected Direct and Indirect Costs of Cancer (in Billions)²
Year	2003 (Y₀)	2004 (Y₁)	2005 (Y₂)	2006 (Y₃)	2007 (Y₄)	2008 (Y₅)	2009 (Y₆)	2010 (Y₇)	2011 (Y₈)	2012 (Y₉)	2013 (Y₁₀)
Cost	$189.50	$209.27	$231.10	$255.20	$281.82	$311.22	$343.68	$379.53	$419.12	$462.84	$511.12

To better understand the impact of current and future costs of cancer, it is necessary to analyze the $189.5 billion figure as the sum of its three components: $64.2 billion for direct medical costs, $16.3 billion for indirect morbidity costs, and $95.2 for indirect mortality costs.

According to the accompanying analysis in the National Heart, Lung, and Blood Institute (NHLBI) Fact Book, the direct medical costs are based on personal health care expenditures for home care, hospital and nursing home care, drugs, physical services, and other professional services. This number was estimated by the Centers for Medicare & Medicaid Services (CMS) and the National Center for Health Statistics (NCHS) using their projections for total 2003 health care expenditures by type of direct cost. The indirect morbidity costs were approximated by the NCHS by multiplying their estimates from 1980 by an inflation factor of 4.8 percent (derived from the increase in mean earnings as calculated by the Bureau of the Census). The indirect mortality costs were estimated via a three-step approach: first, the number of deaths in 1999, grouped by age and sex, was multiplied by the 1999 present value of lifetime earnings and then discounted at 3 percent (since the latest data was collected in 1999); next, these estimates were summed by group (age and sex); finally, these figures were multiplied by an inflation factor of 1.26 percent based on the change in mean earnings between 1999 and 2003 (3). Though inflation factors were employed in two of the preceding three cases to yield 2003 estimates, each of these three components was calculated reasonably. Thus, the high costs of cancer, which will only continue to increase over time, accentuate the need for Congress to act immediately to improve the quality of life for current and future cancer patients.

Since cancer is disproportionately a disease of the elderly, with more than sixty percent of all cancer diagnoses made in persons age 65 or older, millions of Americans rely on the Medicare program to cover the costs associated with cancer care (4). Despite the development of new potentially life-extending oral anti-cancer drugs, Medicare coverage is limited to injectable drugs or oral drugs that have an injectable version (5). Other commonly prescribed anti-cancer agents such as thalomid, for a deadly blood cancer called multiple myeloma; gleevec, for certain types of leukemia and gastrointestinal tumors; and tamoxifen citrate, used to treat breast cancer, are not covered by the program (6) (Table 2).

Generic Name	Trade Name	Number of Capsules⁴	Strength	Retail Price⁵	Minimum Annual Cost⁶
Table 2 Commonly Prescribed Oral Cancer Drugs not Covered by Medicare³
Thalomid	Thalidomide	240	50 mg	$3,536.57	$42,438.86
Gleevec	Imatinib Mesylate	120	100 mg	$2,284.80	$27,417.60
Tamoxifen Citrate	Nolvadex	60	10 mg	$132.28	$1,587.36
Related Footnotes: ⁴ This is the number of capsules typically required by the average patient each month. ⁵ This is the approximate price charged by Eckerds, a leading national drugstore, to consumers for a one month supply of the drug. ⁶ Retail Cost x 12 months.

Noncoverage of these drugs and new oral therapies obligates patients to choose between substantially greater out-of-pocket costs or less effective treatments. Since the majority of these patients are not able to bear the costs of the revolutionary oral therapies, they are forced to utilize one or more of the other treatments currently covered by the Medicare program that may not be best suited for their specific diagnosis. Medicare’s failure to cover all anti-cancer drugs leaves many patients at risk of shortened life spans and increased suffering from blood-related cancers, including leukemia, lymphoma, and myeloma, and from other cancers of the lung, breast, and prostate (7). By ensuring Medicare coverage of all oral anti-cancer drugs, more Americans will have access to life-saving therapies that fit their individual needs.

DISCUSSION

During the 107th Congress, Congresswoman Deborah Pryce and Senator Olympia Snowe introduced the Access to Cancer Therapies Act of 2001, H.R.1624/S.913, to provide a crucial update to Medicare’s reimbursement policy for oral anti-cancer agents. Delayed by the Subcommittee on Health, this bill was reintroduced in March 2003 during the 108th Congress as the Access to Cancer Therapies Act of 2003, H.R.1288/S.1037, with strong support in both the House and the Senate (8). This legislation would amend title XVIII of the Social Security Act to ensure that seniors with cancer would have access to all anti-cancer drugs, especially newly manufactured oral therapies.

Though the intent of the Access to Cancer Therapies Act of 2003 is clear, this legislation has been read twice and referred to the Committee on Finance, indicating that some members of Congress may be concerned about the bill’s implementation costs. However, in order to properly evaluate the true costs of the bill, it is important to note the relationship between the proposed legislation and the pending Medicare Prescription Drug and Modernization Act of 2003, H.R.1/S.1. The Access to Cancer Therapies Act of 2003 would provide the funding necessary to cover all anti-cancer drugs for Medicare recipients from 2004 until 2006 since the Social Security Act would not reflect the changes provided by the Medicare Prescription Drug and Modernization Act of 2003 until the year 2006. In 2006, the revised Social Security Act would contain Part D coverage, a new prescription drug benefit that would provide seniors with many more therapy choices (9). This change would ensure that anti-cancer drugs are as accessible as other prescription drugs. Hence, The Access to Cancer Therapies Act of 2003, in combination with the Medicare Prescription Drug and Modernization Act of 2003, would provide cancer patients with greater treatment options.

The Congressional Budget Office does not evaluate the implementation costs of legislation until after it has been passed into law. Nevertheless, Congresswoman Pryce’s Office has received a verbal estimate from the CBO, putting the two year cost of The Access to Cancer Therapies Act of 2003 at $400 million (10). Critics of this legislation may propose that Congress simply wait until 2006, when the changes provided by the Medicare Prescription Drug and Modernization Act of 2003 will be implemented, to save the government from spending this money. However, it would be more economical to implement this legislation immediately, thereby covering oral anti-cancer drugs for current patients rather than paying the high costs of routine doctor visits associated with injectable cancer treatments. By extension, the proposed changes outlined in the Access to Cancer Therapies Act of 2003, which would be incorporated into the Medicare Prescription Drug and Modernization Act of 2003, would result in a reduced net outlay of government funds since future cancer patients would rely more heavily on oral anti-cancer agents, resulting in fewer doctor visits. Clearly, this reduction would be realized only if Congress passed both pieces of legislation in a timely manner.

Despite the economic savings generated through the implementation of these bills, opponents may still argue that this type of commitment (related to the costs of implementing the Access to Cancer Therapies Act of 2003 and the Medicare Prescription Drug and Modernization Act of 2003) is simply too high. Though the expanded coverage will cost the government money, the amount necessary is marginal when compared to the costs associated with delaying the passage of the proposed legislation.

Besides cost-related concerns, some medical professionals are concerned that Medicare coverage of oral anti-cancer drugs will lead to difficult compliance issues. These professionals worry that patients will either forget or choose not to take their prescribed oral treatments, since physicians would not be administering these anti-cancer drugs themselves. However, while this issue would be present independent of the proposed legislation since Medicare currently covers oral drugs with an injectable equivalent, further concern can be reduced or eliminated through patient education programs.

RECOMMENDATION

In order to ensure that Americans have access to the best available cancer treatments, the Congress of the United States should adopt legislation that will amend Medicare Part B, such that this federal health insurance program covers the costs of all oral anti-cancer treatments. Medicare Part B currently covers doctor visits, outpatient hospital care, and other services and supplies that are medically necessary, but it does not provide adequate coverage for most of the newer and more effective cancer treatments. The original Medicare legislation, passed by Congress in 1965, did not include coverage for “self-administered drugs.” In 1993, Congress treated cancer drugs differently when legislators extended Medicare coverage to oral drugs with intravenous equivalents (11). However, only seven drugs meet these criteria (Table 3).

Generic Name	Trade Name	Number of Capsules	Strength	Retail Price	Minimum Annual Cost
Table 2 Commonly Prescribed Cancer Drugs Covered by Medicare (Footnote 7)
Temozolomide	Temodar	5	150 mg	$718.43	$8,621.20
Etoposide	VePesid	10	50 mg	$517.81	$6,213.66
Capecitabine	Xeloda	120	150 mg	$468.24	$5,618.88
Busulfan	Myleran	120	2 mg	$257.68	$3,092.16
Cyclophosphamide	Cytoxan	30	50 mg	$114.39	$1.372.68
Melphalan	Alkeran	20	2 mg	$57.55	$690.56
Methotrexate	Amethopterin	40	2.5 mg	$23.73	$284.80

While 90-95% of therapies are currently covered by Medicare, as much as 25% of cancer treatments that will soon be available in the form of oral drugs are not covered by the program (12). The proposed legislation will enable more patients to take the most beneficial and cost-effective treatments in the comfort of their own homes. For many cancer patients, especially those living in rural areas, oral anti-cancer drugs are absolutely necessary to increase their chances of achieving remission.

Beyond the changes proposed by the Access to Cancer Therapies Act of 2003, Congress should consider the impact of including financial incentives for pharmaceutical companies that reduce the costs of oral anti-cancer treatments to the American public. By offering a combination of tax breaks and government grants for cancer-related research and development, pharmaceutical companies will lower drug costs, thereby decreasing Medicare coverage costs and increasing development of future cancer therapies. As biomedical breakthroughs continue to provide more alternatives to intravenously administered drugs, it is imperative that oral therapies remain accessible and affordable. This type of incentive would jointly benefit the pharmaceutical industry and the patient population.

CONCLUSION

More than two million Medicare beneficiaries will be diagnosed with cancer in 2003, making the Medicare program the single largest provider of cancer care in the United States. At least 43 percent of these patients will incur $2,000 or more in outpatient drug costs and 82 percent will face other life-threatening chronic conditions such as diabetes or heart disease at the same time (13). Without the proposed legislation, many of these patients will be forced to not only pay the out-of-pocket costs for therapies not covered by the Medicare program, but will also incur additional expenses to secure the medications needed to fight the other chronic conditions.

Due to the recent advancements in the diagnosis and treatment of cancer, many patients are more hopeful than ever that they will achieve remission. But without Medicare coverage of these new oral anti-cancer therapies, Americans who are unable to afford the new treatments will likely die. Put simply, Congress must act immediately to ensure that current and future cancer patients have access to the best possible cancer care alternatives.

FOOTNOTES

∑[Cost(Y₁)+ Cost(Y₂)+ . . . + Cost(Y₁₀)]
Estimates for the direct and indirect costs of cancer grew from $171.6 billion in 2002 to $189.5 billion in 2003. This change represents a 10.431% increase in the costs of cancer from 2002 to 2003. The flat-line forecast estimate assumes an identical increase in these costs year over year for the next ten years.
Sources: AstraZeneca - http://www.astrazeneca.com; Novartis - http://www.novartis.com; Celgene - http://www.celgene.com

REFERENCES

“Cancer Facts & Figures 2003.” American Cancer Society.
http://www.cancer.org/docroot/STT/content/STT_1x_Cancer_Facts__Figures_2003.asp.
“Direct and Indirect Economic Costs of Illness by Major Diagnosis.” National Heart, Lung, and Blood Institute.
http://www.nhlbi.nih.gov/about/02factbk.pdf
Ibid.
“Cancer Pharmacology and Treatment in Older Patients.” National Institutes of Health. http://grants1.nih.gov/grants/guide/pa-files/PA-98-069.html.
“Medicare Coverage of Oral Anti-Cancer Agents.” Leukemia & Lymphoma Society.
http://www.leukemia.org/all_page?item_id=17068.
“Medicare Pays for More Services.” Jefferson Regional Medical Center: Senior Scene.
http://www.shhspgh.org/health/seniors.
“Cancer Screening Overview.” National Cancer Institute.
http://www.nci.nih.gov/cancerinfo/pdq/screening/overview.
“Access to Cancer Therapies Act of 2003.” Thomas: U.S. Congress Online.
http://thomas.loc.gov.
Reiher, Shiloh (Legislative Director for Congresswoman Deborah Pryce). Phone Interview. 9 Sept. 2003.
Ibid.
“Medicare Payment for Cancer Drugs Is Seen as Likely.” Cancer Research and Treatment Fund.
http://www.crt.org/news_medicare.htm.
“The Access to Cancer Therapies Act.” U.S. House of Representatives. http://www.house.gov/pryce/cwg/faqacta.htm.
“Cancer Patients and Medicare: A ‘Welcome to Medicare’ Check-up & A Rx Drugs Benefit.” American Cancer Society. http://www.cancer.org/docroot/GI/content/GI_3_11x_Cancer_Patients_and_Medicare.asp?sitearea=gi.

--top--

Back to the Journal of Undergraduate Research