 Continuing with its focus on paying doctors for delivering higher quality care and lowering cost by discouraging them from providing unnecessary services, the CMS announced the launch of an Oncology Care Model (OCM) that contains goals and incentives for practitioners in cancer care.

The OCM represents the second in a series of specialty care models of Medicare payment. It follows the start last year of the Comprehensive ESRD Care Model for enhanced care to beneficiaries with end stage renal disease. OCM is a five year program set to start in 2016.

Participating providers will have to offer patient access around the clock, 7 days a week to a clinician who has ready access to patient records. Patients must be treated with therapies consistent with nationally recognized clinical guidelines and comply with guidelines on improved collection and use of medical data.

Key elements of the refined payment model include monthly, $160 per patient care management payments along with performance-based payments for OCM episodes. The monthly payment is designed to support the cost of managing and coordinating care for Medicare patients. CMS said oncologists will have to meet the bar on a set of quality measures.

“This model will invest in physician-led practices, allowing the practices to innovate and deliver higher-quality care to their patients,” CMS officials said in the release. “CMS is seeking the participation of other payers in the model to leverage the opportunity to transform care for oncology patients across a broader population.”

CMS said the OCM comes in response to feedback from the oncology community, patient advocates and the private sector that “a new way of paying for and delivering oncology care is needed.”

The initiative is part of the Department of Health and Human Services’ “better, smarter, healthier” program to obtain better value for the healthcare dollars being spent through the Medicare program.

HHS hopes to link 30 percent of traditional or fee-for-service payments through Medicare to value-based care through alternative payment models, such as Accountable Care Organizations (ACOs) by the end of 2016 and 50 percent of payments to such models by the end of 2018.

“HHS is focused on three key areas: linking payment to quality of care; improving and innovating in care delivery; and sharing information more broadly to providers, consumers and others to support better decisions while maintaining privacy,” the release said.

The OCM will cover nearly all cancer types and is a multi-payer model that includes Medicare fee-for-service (OCM-FFS) and other payers such as commercial insurance plans or state Medicaid agencies.

The initiative is supported by the American Society of Clinical Oncology which late last month noted that it was the first time in Medicare history that “explicit goals” had been set to make value-based care a factor in payment. ASCO said the OCM “aligns with ASCO's own proposal to reform payment for oncology care,” released in May 2014.

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The CMS announced the launch of an Oncology Care Model that contains goals and incentives for practitioners in cancer care.

New Oncology Care Model Reforms Payment System, Offers Performance-Based Incentives

US-based global pharmaceuticals giant Pfizer Inc. will acquire Hospira Inc., a leading maker of sterile injectable drugs and infusion technologies, in a deal valued at $17 billion including debt.

Pfizer officials said the acquisition was a good strategic fit that would provide the larger company with a much stronger platform for expanding its sales of pharmaceuticals across the globe, while also creating a much more robust product portfolio.

“Hospira’s business aligns well with our new commercial structure and is an excellent strategic fit,” said Ian Read, chairman and CEO of Pfizer, in a statement.

Hospira, a Lake Forest, Illinois company, had revenues of roughly $4 billion in 2013, the last year for which full results were available. Over 81% of its sales are in the Americas, which includes the United States, Canada, and Latin America, according to a November SEC filing.

Pfizer, whose revenues reached nearly $52 billion in 2013, is a global maker and distributor of medicines for people and animals. The company’s portfolio of products includes human biologic and small molecule medicines and vaccines.

Hospira has a broad sterile injectables product line, which includes acute care and oncology injectables that mesh well with Pfizer’s suite of sterile injectibles, including anti-infectives, anti-inflammatories and cytotoxics, Pfizer said in the release.

The acquisition deal is expected to close in the second half of this year.

Pfizer said the addition would strengthen its Global Established Pharmaceutical business and support its growth strategy to build a broader portfolio of biosimilars, which are pharmaceutical products that represent refinements to older pharmaceuticals by other companies that have come off patent.

Pfizer said it would also leverage its scientific expertise, marketing power and development capabilities to broaden the market for Hospira’s other products. Hospira’s market reach includes Europe, the Middle East and Africa (12% of sales); and the Asia Pacific, including Japan, Australia and New Zealand (7%).

“The addition of Hospira has the potential to fundamentally improve the growth trajectory of the Global Established Pharmaceutical business,” Pfizer said in the release, saying that it hoped for a “leadership position in the large and growing off-patent sterile injectables marketplace.”

Hospira’s revenue growth the past four years has been relatively sluggish, hovering slightly above the $4 billion mark, according to its financial filings. Officials expressed confidence that the two companies combined would catapult sales to significantly higher levels.

F. Michael Ball, CEO of Hospira, called the merger “a unique opportunity to leverage the complementary strengths of our robust portfolios and rich pipelines.”

In the release, Pfizer described the global market for sterile injectables to be large and growing and projected that it would be about $70 billion. They project the worldwide market for biosimilars to be approximately $20 billion by 2020.

Hospira’s specialty injectable pharmaceuticals represented approximately 68% of the company’s global sales for the first 9 months of 2014. Those included acute-care and oncology injectable products, biosimilars and the company’s sedation agent Precedex (dexmedetomidine), the company said in its November SEC filing. Medication management amounted to 19% of global sales and other pharmaceuticals 13% for the same 9-month period.

By Tony Hagen

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New Oncology Care Model Reforms Payment System, Offers Performance-Based Incentives

Pfizer Expands Oncology Portfolio With $17 Billion Hospira Acquisition