	There are thousands of clinical studies in progress for hematologic malignancies, but many are in phase I or II trials, so it may be some time before the most promising compounds add new weapons to the hematology armamentarium, where they are sorely needed.

	More than 1 million people suffer from a hematologic malignancy in the United States, and every year another 148,000 men, women, and children are diagnosed with lymphoma, leukemia, or myeloma.

	“We are still relying principally on the same two drug types to treat acute myeloid leukemia (AML) that we used 40 years ago: cytarabine and an anthracycline antibiotic such as daunomycin,” said Marshall A. Lichtman, MD, professor in the departments of Medicine, Hematology/Oncology, and Biochemistry and Biophysics at the University of Rochester School of Medicine and Dentistry in New York. “This demonstrates the need for a broad and aggressive research program, new paradigms, and genius,” to find new therapies for these cancers.

	The approval of imatinib (Gleevec, Novartis) in 2001 was a giant leap forward in the treatment of malignancies in which the ABL gene is mutated, resulting in a mutant tyrosine kinase (TK). This mutation occurs in chronic myeloid leukemia (CML) and acute leukemias. Imatinib’s clinical and financial success, as well as the success of the second-generation nilotinib (Tasigna, Novartis) and dasatinib (Sprycel, Bristol-Myers Squibb), which target the mutant ABL TK to stop the proliferation of white cells in certain leukemias and permit restoration of normal blood cell production, encouraged pharmaceutical companies to invest in blood cancer research.

	It is difficult to pinpoint exactly how much money companies are spending on developing therapies for hematologic malignancies, but several large companies, including Pfizer, Genentech, Novartis, and Bristol-Myers Squibb, have dedicated parts of their research and development budgets to finding treatments for blood cancers.

	The National Cancer Institute (NCI) is also investing more than $425 million a year in hematologic malignancy research. The NCI reported that it earmarked another $81 million in FY2009-2010 in American Recovery and Reinvestment Act funds for blood cancer research.

	However, Lichtman is concerned that many of the products are variations on a theme—tinkering with existing chemicals rather than finding new targets. He is also concerned that this approach decreases the potential market for a drug and may not provide a good business plan for pharmaceutical companies. The latter concern is mitigated in part by the ability of academic institutions with federal support to bear some of the early investment costs of drug development.

	One example is tipifarnib (Zarnestra, Johnson & Johnson), a farnesyltransferase inhibitor being developed for older adults with newly diagnosed AML. “We have great difficulty treating older patients with cancer because they tend to have more resistant cancers, and they cannot tolerate harsh drug regimens for several reasons. Unfortunately, this time of life is when cancer incidence is greatest,” said Lichtman.

	“At first, tipifarnib didn’t do well because the percentage of remissions was low,” said Joseph A. Bertino, MD, professor of Medicine and Pharmacology, interim director of the Stem Cell Institute of New Jersey and The Cancer Institute of New Jersey, University of Medicine and Dentistry of New Jersey—Robert Wood Johnson Medical School.

	However, researchers learned that if the patient had a high RASGRP1 and a low APTX expression, they were most likely to benefit from tipifarnib-based therapies. “This just shows you how important it is to personalize some of the medicines that we are using,” Bertino said.

	Lichtman said that the partnership of academia, the federal government, and industry is essential to encourage the development of personalized medicine for these small subsets of patients. Among the research currently under way, investigators are looking at ways to improve responses to stem cell transplantation, cytotoxic drugs such as thalidomide derivatives, as well as products that target various pathways, including tyrosine kinase, Aurora kinase, RAS, CD30, ABL, and JAK.

	“There is a lot of research going on, and many drugs are in the pipeline,” Bertino said. “We await the results of phase II and phase III trials, and new drug combinations that include the use of these novel targeted therapies.”

	“We are making progress, but we have a long way to go,” said Lichtman.

	Research is paying off at least for some patients with leukemia. According to the NCI, mortality rates for the most common hematologic malignancy have decreased slightly over the last 20 years. The use of tyrosine kinase inhibitors (TKIs) has helped to increase five-year survival rates for many patients with CML.

	“Nilotinib and dasatinib look like they are causing a higher percentage of complete remissions than imatinib, and the survival looks better, so I think there will be a shift in the use of some of these newer inhibitors instead of imatinib,” Bertino said.

	Despite the success of these TKIs, however, some patients either experience treatment failure or develop resistance, and researchers are exploring compounds for patients who run out of treatment options. Ponatinib (Ariad) and bosutinib (Pfizer) may become options for refractory/resistant patients. Currently, there are no approved therapies after second-line treatment with dasatinib or nilotinib.

	The phase II PACE (Ponatinib Ph+ ALL and CML Evaluation) trial is investigating use of ponatinib, an oral pan-BCR ABL, third-generation TKI rationally designed to overcome the T315I mutation, for which currently approved TKIs are largely ineffective. PACE enrolled chronic patients with CML, regardless of disease phase, as well as patients with Philadelphia-positive acute lymphoblastic leukemia (Ph+ALL). All patients are represented by one of two categories: patients resistant or intolerant to previous TKI therapy; and patients with the T315I mutation. In patients with chronic-phase (CP) CML, interim data have demonstrated that treatment with ponatinib achieved a 47% major cytogenetic response rate. Robust responses have been observed so far in all patient cohorts.

	In another phase I/II study, bosutinib, an oral, Src/ ABL TKI, showed promise in Ph+ leukemia patients who developed resistance or intolerance to imatinib, dasatinib, and/or nilotinib.

	Pfizer has submitted new drug applications in both the United States and Europe for bosutinib to treat adult patients with previously treated Ph+ CML. The labeling includes patients who were resistant or intolerant to imatinib, dasatinib, or nilotinib.

	Another target that looks promising for patients who have developed resistance to imatinib are the Aurora kinase inhibitors (AKIs), said Lichtman, but they have had a rocky developmental road. Studies of 1 AKI, MK-0457 (tozasertib, Merck, Vertex) were suspended in 2007 after a clinical safety finding of QTc prolongation was observed. Studies are proceeding for patients who were already enrolled in the trials, but researchers are providing additional monitoring for QTc prolongation.

	MK-0457 is being studied in phase II trials in patients with treatment-resistant CML or Ph+ ALL. Companies are also looking at the AKIs in combination with other products, such as dasatinib, in the same group of patients. Another phase I trial is looking at patients with advanced leukemias.

	We are still relying principally on the same two drug types to treat acute myeloid leukemia (AML) that we used 40 years ago… This demonstrates the need for a broad and aggressive research program, new paradigms, and genius to find new therapies for these cancers.”

	Because outcomes are poor for children with ALL that is refractory to treatment or who relapse, several studies are looking at new options. The novel anti-CD22 immunotoxin moxetumomab pasudotox (previously known as CAT-8015 or HA22), was promising in phase I studies of children with relapsed or refractory ALL. One study showed complete remissions in 3 of 12 patients treated.

	A study from the Children’s Oncology Group had mixed results for re-induction therapy with epratuzumab in children with relapsed ALL. Although the children with early relapsed CD22-positive B-cell precursor ALL tolerated the two regimens (epratuzumab alone or with chemotherapy), second remission rates were not better than the control group, which consisted of children who received chemotherapy alone. However, among children who sustained a complete remission, those treated with epratuzumab were more likely to become minimal residual disease-negative as compared with those who received chemotherapy alone.

	A JAK kinase inhibitor, ruxolitinib (Jakafi, Incyte) is the first drug specifically approved for the treatment of myelofibrosis. The drug is in clinical trials for other indications, including multiple myeloma and certain leukemias.

	One compound that Bertino is watching is CPX-351 (Celator Pharmaceuticals), a liposomal formulation of cytarabine and daunorubicin, which in phase IIb trials showed substantial clinical activity in elderly patients experiencing their first relapse of AML.

	Rituximab (Rituxan, Genentech), the first monoclonal antibody approved for use in cancers, gave the same type of momentum to lymphoma research that imatinib gave to leukemias.

	In 2006, the FDA approved an indication for the first-line treatment of patients with diffuse large B-cell, CD20-positive, non-Hodgkin lymphoma (NHL) to be used in combination with cyclophosphamide, doxorubicin, vincristine, and prednisone (CHOP) or other anthracycline-based chemotherapy regimens. Since then, the indications have expanded to include first-line treatment of patients with low-grade or follicular B-cell, CD20-positive NHL with cyclophosphamide, vincristine, and prednisone (CVP) or following CVP chemotherapy; or for the treatment of previously untreated or treated patients with chronic lymphocytic leukemia (CLL) in combination with fludarabine and cyclophosphamide (FC). Last year, the FDA expanded the indication again for maintenance therapy for patients with previously untreated CD20-positive B-cell NHL who responded to rituximab in combination with chemotherapy.

	Lymphoma, which represents about 5% of all US cancers, has seen a nearly 20% increase in incidence in the past 20 years, during which leukemia incidence has declined slightly. However, the mortality rate for lymphoma has decreased by nearly 50%.

	“One of the most exciting drugs, brentuximab vedotin, is in Hodgkin disease,” said Bertino. The FDA approved brentuximab (Adcetris, SeattleGenetics) last year for the treatment of HL and systemic anaplastic large cell lymphoma. Brentuximab is an antibody-drug conjugate that combines the monoclonal antibody brentuximab and with relapsed CD30+ cutaneous lymphoproliferative disorders achieved an objective response, including seven complete remissions and four partial remissions. The company is also looking at using brentuximab earlier in poor-risk patients. Bertino called it “a big step forward” that might produce better salvage regimens.

	However, the FDA issued a warning earlier this year about several cases of progressive multifocal leukoencephalopathy (PML), a rare but fatal demyelinating disease associated with brentuximab, and added a new black box warning highlighting this risk to the drug label. In addition, the FDA added a contraindication warning against the use of brentuximab in combination with bleomycin because it increased the risk of pulmonary toxicity.

	Pfizer is conducting phase II and III trials of inotuzumab, an investigational antibody that targets CD22, an antigen expressed on about 90% of B-cell malignancies. In early trials, the compound has demonstrated efficacy against CD22(+) B-cell NHL. It is also being looked at with rituximab for patients with relapsed/ refractory aggressive NHL who are not candidates for intensive high-dose chemotherapy.

	Novartis plans to file an expanded label application for everolimus (Afinitor), an mTOR inhibitor, to treat lymphoma in 2015. Currently, it is indicated for renal cell carcinoma and pancreatic tumors.

	Pixantrone (Pixuvri, Cell Therapeutics), the novel aza-anthracenedione, looks promising for NHL, but it is stalled at the FDA. The company recently withdrew its new drug application and said it will resubmit an application later this year. The Oncologic Drugs Advisory Committee panel rejected its previous application.

	The EXTEND trial demonstrated that patients with relapsed/refractory aggressive NHL who were treated with pixantrone compared with other chemotherapy agents achieved significantly higher rate of confirmed and unconfirmed complete remission (CR/CRu), significant increases in overall response rate, significantly greater progression-free survival (PFS), and a positive trend in overall survival.

	Pharmacyclics is sponsoring trials of the Bruton’s tyrosine kinase (BTK) inhibitor called PCI-32765 that looks promising against mantle cell and chronic lymphocytic leukemia, said Bertino. “This drug has produced complete remissions in these lymphomas.”

	BTK mediates B-cell receptor signaling that is important for normal B-cell development. PCI-32765 appears to directly affect CLL cells by inducing programmed cell death, but also blocks the ability of CLL cells to migrate toward and adhere to lymph nodes. In a phase II trial, PCI-32765 was well-tolerated.

	According to the NCI, the overall incidence and mortality rates of multiple myeloma (MM), which is the second most common blood cancer in the United States, have remained fairly stable over two decades. Every year almost 22,000 people are diagnosed with the disease, and a little over 10,000 die. The five-year survival rate is only about 40%.

	Bristol-Myers Squibb and Abbott are working on a monoclonal antibody, elotuzumab, for relapsing MM. Interim results from a phase II trial of elotuzumab showed a partial response or better among patients with relapsed MM who received elotuzumab and lenalidomide and low-dose dexamethasone. The median time to PFS was not reached after 4.9 months of follow-up.

	“There remains a need for more effective and tolerable treatment options for patients with relapsed multiple myeloma, as almost all patients eventually relapse and require further therapy,” according to Paul G. Richardson, MD, clinical director of the Jerome Lipper Center for Multiple Myeloma at the Dana-Farber Cancer Institute, Boston, Massachusetts, in a press release about the results.

	The next-generation proteasome inhibitor, carfilzomab, is also being developed for patients with relapsed and refractory MM. Onyx Pharmaceuticals reported on three trials of carfilzomab at the recent American Society of Hematology meeting, in which patients had a durable response and appeared to have an acceptable safety profile. Carfilzomab is being looked at in the phase III ASPIRE trial. Patients with relapsed MM who have received 1 to 3 prior therapies are being randomized to lenalidomide and low-dose dexamethasone with or without carfilzomib. The FOCUS trial, another phase III trial, is looking at carfilzomib as single-agent therapy in the same type of patients.

Articles

A closer look at the hematology pipeline where there are multiple promising studies in progress for hematologic malignancies, including lymphoma, leukemia, and multiple myeloma.

Hematology Pipeline: Baby Steps After a Giant Leap

	Economic pressures are forcing many oncologists to leave small private practices.

	Oncologists are under enormous economic pressures that are changing the configuration of community oncology. These pressures include increasing costs, decreasing reimbursements, more patients (many uninsured or underinsured), drug shortages, clinical pathways, the burden of regulatory compliance, the cost of technology, and a host of other issues.

	Although most of the changes have been incremental, eroding at the traditional private practice, they are ultimately forcing many oncologists into larger institutional organizations and putting small private practitioners on the endangered species list.

	The Community Oncology Alliance (COA) has tracked the financial health of 1042 community practices. The organization reports a 40.6% increase in the number of practices that have been acquired by another organization or merged into hospitals. In a 2011 report, COA noted 315 practices that had been acquired by hospitals and 11 practices that merged or were acquired by another organization. Another 199 practices closed, and 369 reported they are in a financial bind.

	“Trying to manage a practice independent of a hospital or another large system is becoming impossible,” said Thomas L. Whittaker, MD, FACP, a hematologist/oncologist at Central Indiana Cancer Centers, which has partnered with Indiana University Health. “The financial risks are too high, and financing is driving the change.”

	Most experts agree that future oncology practices will look very different from practices 20 years ago.

	“The solo or small group practices are going to go away,” said Jeffery C. Ward, MD, a medical oncologist at Puget Sound Cancer Centers, an affiliate of the Swedish Cancer Institute in Edmonds, Washington. Ward sees two types of private practice affiliations emerging: those that are part of a hospital or academic institution, and those that are part of a large cancer management network.

	Cancer treatment used to require inpatient care. Chemotherapy was inelegant, and it was difficult to manage the nausea and side effects. As antiemetic regimens and shorter drug infusions were developed, cancer care evolved to outpatient care, said Whittaker, who is also president of the Association of Community Cancer Centers (ACCC).

	Money also had a hand in this change, after the federal government instituted a formula to pay for oncology drugs—the Average Wholesale Price (AWP) + n. This allowed profits on the administration of infusion drugs, providing a supplemental income to oncology practices.

	“The margins on those drugs became larger and larger to the point where an oncology practice depended upon them to sustain and maintain the size of a practice,” said Dean H. Gesme, Jr, MD, FACP, FACPE, a medical oncologist with Minnesota Oncology, part of the US Oncology Network. “The large infusion room, the number of nurses—this entire infrastructure was based on the global amount of revenue coming into the practice.”

	At one time, it was estimated that 80% of cancer patients received their chemotherapy regimen in a community practice, and 50% of the practice’s income came from buying and administering drugs, according to a 2001 article in the 

	Having set up this payment system, the government and other payers began chipping away at it. The Medicare Modernization Act changed AWP to Average Sales Price (ASP) in 2005, which provided little or no margin on the chemotherapy drugs.

	The bigger we get, the better negotiating we can do with our payers. We’ve given up on Medicare. The government will pay what it will pay.”

	“Now, reimbursement is based on ASP, which covers the cost of most, but not all drugs, but does not add significant profit to the bottom line for running a practice,” said Elaine Towle, CMPE, director, consulting services, Oncology Metrics, a division of Altos Solutions.

	“We’re seeing oncologists looking to leave their current community practice for financial safety and being lured into institutional settings,” Gesme said.

	Drug reimbursement, and now drug shortages, have influenced operating budgets and staffing, said Towle, who coauthors the National Oncology Practice Benchmark reports published by the 

. “Payers are increasingly seeking ways to get a better handle on the drug spend. One of the ways they do that is by requiring prior authorization or precertification, frequently on an individual drug basis. If you have 20 chemotherapy chairs and you must precertify drugs on even half of that patient population, the overhead has to increase dramatically.

	“Drug shortages also affect staffing. When you have a patient that needs chemotherapy, and you realize you don’t have the drug on hand, you need someone on your staff to figure out how to get it. Is there another source? Or do we need to go back to the clinician and say, ‘We can’t get drug A for Mrs. Jones. How are you going to change your treatment plan?’ That is another layer of complexity that takes people to manage,” said Towle.

	Towle’s survey has found that labor costs have increased, while revenue is flat or down, and she thinks that most of that labor is to manage reimbursements and drug shortages.

	In the new oncology world, bigger is better because the largest practices can negotiate the best reimbursements with third-party payers and the best prices on oncology drugs, said Ward, who is also the chair-elect of the American Society of Clinical Oncology (ASCO) Clinical Practice Committee and associate editor of the 

	Gesme agreed, saying that practices must reach a “critical mass” to leverage contracts. “The bigger we get, the better negotiating we can do with our payers. We’ve given up on Medicare. The government will pay what it will pay. Our leverage in private practice is in negotiating with private payers,” he said, noting that his 60-doctor practice is looking to add physicians from several specialties.

	“If we can get a large enough group of specialists together, then we will be able to negotiate very well with third-party payers,” said Gesme.

	“The definition of community practice is clearly changing,” said Towle. “Five or ten years ago if you said community practice, you were talking about a physician-owned private practice. Now when you say community practice, it is less clear what you mean because it might be a physician-owned practice, a hospital-owned practice, a large oncology network— there are all kinds of arrangements out there. My definition of community practice is anyone who provides oncology services in the community setting, and ownership differentiates one from another.”

		Oncologists in 102 US practices reported three leading pressures affecting their business decisions.

		Source: From the National Oncology Practice Benchmark Report (

	The backlash may have backfired, though: As payers squeeze oncologists on the drug spend, they push them into larger institutions. However, it costs payers more to treat patients in a hospital than in an office.

	“We are at that tipping point where the payers realize that they have been penny-wise and pound-foolish in beating the medical oncologists to the point where they are changing their practice locations. Many of us are feeling embattled and cannot sustain a practice that we feel comfortable with in the community environment,” Gesme said.

	Cancer care is expensive. The 2011 Medco 

 estimates that the cost of cancer care in the United States may rise from about $125 billion in 2010 to about $207 billion by 2020. Eighteen percent of people aged 65 and older report they have cancer, and as the population ages, oncologists expect the prevalence to increase.

	Enter healthcare reform. No matter what the Supreme Court finds concerning the constitutionality of healthcare reform, the healthcare system is undergoing change—and third-party payers are driving much of that reform.

	“As drugs are more expensive, I think the reimbursement structure will have to change,” Whittaker said. “I have a patient that I am giving IV therapies because he doesn’t have a prescription benefit. I can’t treat him with an oral equivalent, because he cannot afford the thousands of dollars a month it would cost for the drug, but his insurance will pay for IV drugs. We want to give the best possible care, but we have to make it work for the patient.”

	Ward and Gesme also see changes coming in the reimbursement structure, but they said the changes will be incremental—just like all the others&mdash;rather than sweeping.

	“Very little happens in medicine and politics that is not an incremental change. How did we get where we are? It was incremental changes,” Gesme said.

	“There are many possible reform models, but the most promising center on an invoice to replace ASP and a management fee to replace the ‘n’ in ASP + n,” said Ward. “I think after you get rid of ‘buy and bill’ chemotherapy, then you need to get into a model that pays in a way that incentivizes us to act efficiently and requires us to meet quality measures.”

The cost of cancer care in the United States may rise from about $125 billion in 2010 to about $207 billion by 2020.

	Individualized therapies and biomarkers that target cancer pathways characterize today’s cancer treatment. The pressures and complexity of cancer care will require that the delivery of care be more evidence-based.

	“There are treatment protocols that have been shown to be efficacious. I think these pathways will keep people on track,” Whittaker said. “Treating beyond what is scientifically sound is troubling and costs money. If we are able to offer the standard of care and track what that care has done, we will be able to improve our outcomes.”

	Along those lines, reformers are looking at accountable care organizations (ACOs), a type of structure that affects both the payment and delivery of medicine. In an ACO environment, reimbursements are tied to quality metrics that reduce the total cost of care. Although the model is geared toward primary care medicine, oncologists see a place for oncology patient-centered medical homes (PCMHs), which would perform under a similar system.

	“If I were in private practice and looking for a model for the future, I would want to be in a patient-centered medical home. I would not want to be responsible for the cost of drugs, but I would be willing to assume responsibility for my patients’ emergency room care, for their hospitalizations. I think those are the places where money can be taken out of the system without diminishing the quality of care,” Ward said.

	PCMHs could be the perfect place for cancer survivors. The positive side of cancer care today is that more patients are living longer, productive lives. There were about 13.8 million cancer survivors in 2010, and Medco predicts there will be 18.1 million by 2020.

	However, these patients often have residual problems that require consistent follow-up by knowledgeable specialists. The PCMH could be the answer.

		Oncology Business Models Are Changing the Patient Coordination Process

	Impact of changing reimbursement on community oncology practices 

		Source: Community Oncology Alliance. Community Oncology Cancer Care. Practice Impact Report: Documented Impact on Community Oncology Practices. March 31, 2011 update. NOTE: 2012 update currently pending.

	“The patient-centered medical home will have a positive effect,” said Whittaker. “It is geared to be patient-centric and evidence-based. I think an oncology medical home will be able to fit within the ACO framework, but it will take a big organization to do that.”

	Survivors will add to the challenges for practices, said Towle. “Many times, survivors want to stay connected to their oncologist, but how does an oncologist, who is already busy caring for current and new patients coming into the practice, care for long-term survivors?

	“Physician extenders could provide better care to more patients in this challenging economic environment. A well-trained oncology nurse practitioner or physician assistant can be a real asset to a practice and can help physicians become more efficient,” she said.

	Physician extenders can be a helpful addition to a practice, but physicians hope that these and other changes don’t infringe on the relationships that they develop with patients.

	“My concern is that oncology will be less personalized. What I truly love about my practice are the relationships we develop with our patients. My concern over the next few years is that we will have fewer oncologists—many oncologists are retiring&mdash;and we are going to have a lot more patients, especially with healthcare reform.

	“If we have everyone insured—and I think everyone should be insured&mdash;that will mean a lot more patients seeking care. I worry that we will not have the personal touch,” Whittaker said.

	Ward agreed, saying he is also concerned that supervising physician extenders will take away from being able to practice medicine himself. “I understand the need for the model. If I supervise three physician extenders, I could easily do three times the work I do now, and I would do it for less,” he said. “But I enjoy the relationships I have with patients.”

	No matter what drives the form of oncology practices in the future, the oncologists interviewed by 

 truly enjoy the practice of oncology and are optimistic about its future.

	“When I first started, we did not have the means to control the vast majority of pain. The science is better, and the patients are happier and healthier. I am optimistic about the practice of medicine. We just have to build a business infrastructure that will support the rapid advancements in the science and clinical care,” Gesme said.

	Whittaker calls himself a blind optimist. “The science is so much better, and we cure so many more people than we used to. This is exciting and fun because we are doing a better job than ever. I do not think we should let financing get in the way.”

			Barr TR, Towle EL. National Oncology Practice Benchmark, 2011 report on 2010 data. 

			Barr TR, Towle EL. Oncology Practice Trends from the National Practice Benchmark, 2005-2010. 

			Benson LR. Reimbursing Cancer Care: medicare policies challenged. 

			Community Oncology Alliance. Community Oncology Cancer Care Practice Impact Report, updated 3/31/2001. Available at 

			Medco. Drug Trend Report 2011. Available at 

Economic pressures are forcing many oncologists to leave small private practices for larger institutional organizations.

The Changing World of Oncology Practice

	With the recent consideration of the 2010 Affordable Care Act by the US Supreme Court, the rising costs of healthcare have appeared, once again, on our radar screens.

	Under the Act, proposed methods for decreasing US healthcare spending include reducing the unnecessary use of services. But a leading health policy expert says that approach would not significantly lower healthcare costs because the problem is the high cost of each service, rather than the number of services provided.

	The expert, Peter B. Bach, MD, MAPP, is a pulmonologist who serves as director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering Medical Center in New York City. He was the keynote speaker at the 2011 Cancer Center Business Summit held in Chicago, Illinois, which focused on achieving accountability in cancer care.

	“Many of the [Affordable Care Act] reforms focus on getting people to use services less often; the idea is that we are overusing MRIs and doing a lot of unnecessary back surgeries. All of these have to do with overutilization,” Bach told 

	“I argue that the primary issue in the United States is that we spend too much for each unit of healthcare compared with other developed countries,” Bach said. “The quantity of healthcare services we use as a benchmark is not meaningfully higher than it is in other countries that spend less. Rather, the cost of each service provided is lower in those countries than the cost of a comparable service here.”

	One way to help alleviate that problem, Bach suggested, would be to control the amount spent on drugs by giving oncologists incentives to choose the cheapest effective medications for their patients. Under a plan proposed by Bach and two colleagues, doctors would rely on widely accepted treatment standards, and Medicare would offer flat fees for all care given to a cancer patient during a particular “episode,” or one- to several-month time period. Bach and the colleagues have suggested that the idea, similar to the bundled payment approach recommended under the Affordable Care Act, be tested as a Medicare pilot program.

	According to Bach, people in the United States pay more for healthcare across the board. In 2007, per-capita spending on healthcare in the United States was $7290, and Norway was the next largest spender at $4763, noted Bach, citing data reported by the Organisation for Economic Co-operation and Development.

 Yet that information shows that this spending does not relate to an increase in life expectancy, Bach said, because the United States ranks 50th for life expectancy at birth.

	Moreover, while the United States has decreased the amount of time its residents spend in hospitals, the average hospital cost per day is almost twice that in other countries.

	At 675 hospital days per year per 1000 people, Americans spent fewer days in the hospital than those in nearly any other developed country, said Bach, citing facts collected by the McKinsey Global Institute.

 Only residents of Denmark (595), Canada (639), and Portugal (639) spent fewer days in the hospital, he said. Nevertheless, in terms of cost, Bach said, the United States is clearly the leader at $2271 per day in the hospital. The next highest level of spending is by Germany at $1639 per day and Iceland at $1569 per day, he said.

	Nowhere is the inequity in healthcare costs more apparent than in the area of medications. Further data from the McKinsey Global Institute showed that drug prices in the United States are 50% to 60% higher than those for comparable products in other countries.

	“Drug costs have nothing to do with people in the United States taking more pills,” Bach said. “Same drug, same packaging, the drug is 50% more costly in the United States than in the rest of the developed world. And, we still use branded drugs a lot more often than cheaper generic substitutes. The net effect is that, pill to pill within class or indication, the cost is doubled.”

	Bach said that the cost of drugs is a vitally important factor in oncology because it constitutes about 75% of the total cost of cancer care.

	It doesn’t help, he said, that the current reimbursement system rewards oncologists for prescribing higher-priced drugs. The payment model, which requires oncologists to buy medications and then sell them to patients, was instituted more than 20 years ago to induce the treatment of cancer patients in community practices, rather than in hospitals, which saved money.

	“The system has made the doctor a drug dealer,” Bach said. “He or she buys from one source and sells the drugs to another source, and that results in a profit.”

	But as drug prices have risen and reimbursement rates have dropped, that system has become outdated, said Bach. In fact, in 2003, Medicare tried to remove physicians from the process of buying and selling medications by instituting its nowdefunct Competitive Acquisition Program (CAP).

	“If a patient needed chemotherapy, the doctor would call or fax an order to an intermediary, who would ship the drugs by overnight delivery to the doctor to give to the patient,” Bach said. “In this system, the intermediary became the drug dealer. He bought the drug and billed Medicare.”

	Bach said that the CAP system likely failed for several reasons. He described the system as logistically awkward and explained that, at the time, many oncologists felt they were better off staying in the buy-and-bill system. Part of the problem, he said, was that oncologists were allowed to order drugs through the program only when needed for specific patients, rather than the more typical model of keeping some medications on hand for any patient who might need them.

	The need to stockpile cancer medicines is causing financial difficulties for oncology practices under the existing system, too, Bach said.

	“The rise in drug prices actually causes trouble because there is a rise in inventory costs,” he said. “Oncologists need $500,000 worth of inventory, and they have to pay that up front. All of a sudden, they are in a business like Best Buy. As a practical matter, they have to finance that inventory and carry that liability because they can’t just order things as needed.”

	Many people think the buy-and-bill system steers therapy choices, promotes overuse of products, and offers a disincentive to discussing cheaper alternatives with patients, Bach said.

	“There are quite a few people who say, ‘Let’s get the doctor out of the business of buying and selling drugs.’ The problem with that idea is that they have not figured out the rest of the financing for oncology care well enough to make it viable,” Bach said. “There is another contingent that just wants to roll back to five years ago. Oncology stays profitable, they keep making money, and they keep being incentivized to make treatment decisions based on reimbursement.”

	Bach said his episode-based payment approach would do more than motivate doctors to choose the cheapest effective medications. It might also push drug manufacturers to control the costs of their products in order to fit within the program’s fee schedules. In the end, Bach feels that a system based on episode-based payments would help standardize and improve cancer care throughout the country.

			Bach PB, Mirkin JN, Luke JJ. Episode-based payment for cancer care: a proposed pilot for Medicare. 

. 2011;30(3):500-509. doi: 10.1377/hlthaff.2010.0752

			OECD (2009),Graph HE8.2. Richer countries spend more per capita on health care, 2006, in Society at a Glance 2009. doi: 10.1787/ soc_glance-2009-graphhe8_2-en.

			McKinsey Global Institute. Accounting for the cost of US health care: a new look at why Americans spend more. McKinsey & Company. 

http://www.mckinsey.com/Insights/MGI/Research/Americas/Accounting_for_the_cost_of_US_health_care

. Published December 2008. Accessed March 30, 2012.

			Luke J, Mirkin J, Bach P. Improving quality and addressing the rising costs of cancer care: two birds, one stone. 

. 2011;7(6):402- 404. doi: 10.1200/JOP.2011.000419.

With the recent consideration of the 2010 Affordable
Care Act by the US Supreme Court, the rising
costs of healthcare have appeared, once again, on
our radar screens.

'Episode-Based Payment' Could Rein in US Oncology Drug Costs

Before the oncology treatment paradigm can move from a one-size-fits-all model to true personalized medicine, the medical establishment must find a cost-effective way to identify biomarkers that determine which therapies patients should receive.

	That is the message in a recent report by two Colorado researchers who performed a cost-effectiveness analysis of targeted therapies for lung cancer, using the biomarker ALK and the targeted therapy crizotinib (Xalkori, Pfizer) to build their model.

	In the analysis, published recently in the 

, the researchers found that costs rose considerably as more people were tested who didn’t have the biological abnormality being sought. However, when the researchers controlled costs by applying methods to target patients for screening who were more likely to test positive, they missed a significant proportion of the patients who could have benefited from targeted therapy.

	D. Ross Camidge, MD, PhD, who performed the analysis with Adam J. Atherly, PhD, said that cost-effectiveness of screening has to be considered when determining the costs of treatment with targeted therapy, and that the high costs of a “test-everyone” approach may not be feasible in today’s healthcare environment.

	“The big advances in lung cancer (and many other cancers) have come from not giving one drug to everyone, but developing tests to find out in advance who will get maximal benefit from the drug. If you don’t, the average benefit is very poor. However, the cost of testing now has to be factored into the calculations of determining the cost-effectiveness of any drug used in this way. Bringing down the cost per positive is essential,” explained Camidge, who was involved in early research for the development of crizotinib and helped to develop one of the assays used to test for the ALK gene alteration.

	“Assuming you only treat those who come up positive on a test, your cost-effectiveness goes down as you screen more people who don’t have the abnormality you are looking for. It increases the up-front costs of finding those positives,” Camidge said. “For a $1000 test, if the group you screen has a 50% hit rate, you have to add $2000 to the costs of treating every patient. If it is 1%, you have to add $100,000 up front as the money you spend to find even one patient who is positive.

	“For me, the message is to the wider community of doctors, insurers, healthcare providers, and patients. Breakthroughs will not be feasibly applicable unless we make the cost-effectiveness realistic.”

	In the initial modeling, the researchers explored a range of costs, assuming that costs would vary over time. They found that, if all patients with advanced non—small cell lung cancer were screened for ALK, and the assay cost around $1400, screening would be $106,707 per quality-adjusted life-year (QALY) before any drug-related costs were considered. If the population could be narrowed to only those more likely to test positive, the QALY cost would fall to $4756. However, physicians would miss more than half the patients who would benefit from treatment.

	“When you start to think like this, the cost-effectiveness of these breakthroughs becomes a real problem,” Camidge said. “We can either enrich the population being screened by other means but run the risk of missing some people, or bring down the cost of finding each positive patient, such as by reducing the cost of the individual test or multiplexing the tests so you get more positives (even if in different markers) per dollar spent.”

	1. Atherly AJ, Camidge DR. The cost-effectiveness of screening lung cancer patients for targeted drug sensitivity markers. 

 2012; 106(6):1100- 1106. doi:10.1038/bjc.2012.60.

Before the oncology treatment paradigm can move from a one-size-fits-all model to true personalized medicine, the medical establishment must find a cost-effective way to identify biomarkers.

Breakthroughs in Targeted Therapies Not Applicable if Not Cost-Effective

	Every oncologist is being squeezed by economic pressures and government regulations. Shrinking reimbursements and higher healthcare costs are making it difficult for community oncologists to stay in practice.

	“Every cancer center is looking for ways to keep from flushing money down the drain,” said David B. Wilson, RPh, oncology pharmacy manager and oncology pharmacy residency director at St. Luke’s Mountain States Tumor Institute in Boise, Idaho.

	It is time for every practice to take a hard look at the entire operation to see how to deliver the best quality cancer care at the lowest cost. This will be a difficult process, Wilson said.

	One of the biggest areas that community oncologists are feeling the squeeze is with shrinking reimbursements for oncology drugs. The problem started more than 20 years ago when the federal government instituted a reimbursement formula that provided generous reimbursements for delivering chemotherapy in the oncologist’s office. The reimbursement model may have been a good idea at the time because it incentivized oncology practices to provide chemotherapy infusions in the outpatient setting, thereby eliminating expensive hospital stays. The byproduct, however, created a flawed and misaligned incentive system for oncology reimbursement.

	In 2004, the Medicare Modernization Act changed the reimbursement formula to provide little or no margin on many chemotherapy drugs. Taxol is a perfect example. When Taxol became available in the early 1990s, it cost $1500 to $2000 per dose; now it can cost less than $100. “We used to make hundreds on it. Now, with generic paclitaxel, we make $4 or $6 to cover the IV bag, $15 worth of tubing, other supplies, and preparation time. There is technician time and pharmacist time. They need to gown up and wear gloves. It is unsustainable to expect healthcare providers to provide a taxane treatment for $4,” noted Wilson.

	Under the current system, oncologists are paid to administer drugs, but not to provide other important medical services that may help patients manage the side effects of chemotherapy either at home or in the clinic. The rising cost of oncology drugs has rendered the “buy-and-bill” payment model unsustainable for most practices. The government and private payers have reduced reimbursements for drugs, but have not increased or added reimbursement for other important patient support services. The current system doesn’t reimburse oncologists who provide services that actually reduce healthcare expenditures and avoid expensive emergency room (ER) visits. Instead, the incentives in the system are misaligned to actually encourage oncologists to refer patients to the ER to receive the exact same services the oncologist could have provided in the clinic for a fraction of the cost.

	Several experts are looking at ways to change the reimbursement structure to make it more cost-effective and patient-centered. They are looking at ideas such as a case management fee for each patient, which would pay for active treatment and patient support services, regardless of the drug choice.

	Everyone involved in healthcare has to recognize that resources are limited, which means making healthcare value judgments that Americans have been loath to make. Is it the best use of healthcare dollars to pay for repeated ER visits, rather than pay for the prescription that will control chemotherapy side effects and prevent that ER visit?

	“We are finally coming to terms with the fact that benefits are as much about economics as costs,” said Wilson at a Philadelphia meeting that looked at payment models in community oncology, sponsored by the Association of Community Cancer Centers. “Consideration of cost is not unethical. We have to consider cost because we have limited resources.”

	Just as most benefits plans do not consider patient costs like travel time, babysitters, and lost work hours, they do not consider management costs such as staffing in the cancer center either. But that doesn’t mean that practices can afford to ignore those costs, too.

	“Community cancer centers are going to have to invest some money in order to be able to make some good decisions,” he said.

	A person that Wilson finds invaluable is a patient financial navigator, but many small practices do not think they can afford to dedicate a full-time person to obtaining prior authorization, filing claims appeals, etc. Wilson said he was at a small cancer center that felt the same way.

	“The administrators thought we could not afford to hire those people,” he said. “We could not afford NOT to hire those people! We had to demonstrate their need. We had to show how many rejected claims we had, how much off-label use we had, how much money we were losing.”

	Wilson explained that in one case, the center was losing $700,000 annually in off-label prescribing of a single drug. If they had a person who obtained prior approval, the physicians would have known to choose another therapy.

	Few physicians earn an MBA, and their focus is rightly on practicing medicine, rather than on scrutinizing the economics of medicine. However, Wilson said, if practices are going to be sustainable and profitable, they must learn to make good pricing decisions. With insurers squeezing reimbursements, practices must be mindful of how they price incidentals.

	He gave this example: Administrators at a cancer center were purchasing IV bags for $3 a bag. They marked them up 300% and were billing insurers $9 a bag. Then they found a contractor that would sell the bags for $1 each, but they still used the same mark-up paradigm, so they charged 300%—or $3 a bag. “You sold them for $9, now you sell them for $3. You’re losing money.”

	The first step is finding the right person or group of people to review the operation; this might require hiring additional staff. “Mid-level managers are very busy. They are doing budgets, performance reviews, figuring out staffing crises, counting the widgets. It can be hard for them to be strategic. They do not have the time to analyze the data. We don’t always have the right people in the right jobs.”

	When asked what advice he would give to community oncology practices, Wilson offered these suggestions:

		Look to business partners outside the organization, such as insurers, pharmaceutical companies, and other vendors for information because they have a wealth of data. That data might have to be filtered, but it is still useful. “They have information that they have spent money obtaining, so don’t discount that.”

		Organizations like the Association of Community Cancer Centers offer many tools, webinars, and educational opportunities that can help. Wilson recommended 

) as a great tool for understanding the concepts and economies of providing oncology medications.

		Purchasing or developing a pathways program can help with costs. Getting everyone on the same page and using the same products for similar patients can increase a practice’s purchasing volume and potentially affect pricing.

		Having a financial patient advocate to obtain prior authorizations can help prevent missed reimbursement opportunities.

		Developing a formulary committee that includes not only doctors and pharmacists, but also billing and coding people can help control the drug spend.

	Wilson also suggested thinking in broader terms and stressed the importance of planning for the future. “If you are making decisions based on the current state of things, you are not planning for the future. That is correction. We cannot abandon correction, but we need to plan for the future, too.”

Shrinking reimbursements and higher healthcare costs are making it difficult for community oncologists to stay in practice.

The Big Squeeze: How to Handle Higher Costs, Shrinking Reimbursements, and Regulations That Endanger Your Practice

	The development of crizotinib (Xalkori) has helped “crystallize” a relatively rare molecular subset of nonsmall cell lung cancer (NSCLC) and holds the potential for wider use in treating patients with the disease, according to one of the original investigators.

	Sai-Hong Ignatius Ou, MD, PhD, presented an overview of crizotinib recently in the 

. He is an associate clinical professor and a hematologic oncologist in the Department of Medicine, Division of Hematology Oncology, Chao Family Comprehensive Cancer Center, University of California Irvine Medical Center in Orange, California.

	Crizotinib is indicated for the treatment of a highly specific population of patients with advanced NSCLC with an anaplastic lymphoma kinase (

) mutation. It is estimated that only about 5% of NSCLC cases worldwide have an 

	Enhancing its impact as a targeted therapy, crizotinib was approved with a companion, first-of-a-kind genetic test called the Vysis 

 Break Apart FISH Probe Kit. The test further personalizes crizotinib treatment by ensuring that the patients who receive the drug are those whore are most likely to benefit from treatment.

	The FDA approved crizotinib based on response rate, not survival data, in two single-arm trials. Investigators gave 500 mg/day of crizotinib to 255 patients with late-stage 

-rearranged NSCLC. The median age of the patients was 52 years. In the two studies, 96% and 98% had adenocarcinoma, and 93% and 96% had metastatic disease. Nearly all participants had received prior systemic treatment for NSCLC.

	The primary endpoint of both trials was overall response rate (ORR). The ORR was 50% (95% confidence interval [CI], 42%-59%) in the first trial and 61% (95% CI, 52%-70%) in the second. The median duration of response was 41.9 weeks and 48.1 weeks, respectively.

	The most common adverse events were vision problems, nausea, diarrhea, vomiting, edema, and constipation. The FDA issued warnings and precautions for pneumonitis, liver enzyme abnormalities, and QT interval prolongation.

	The road to market was quick for crizotinib, Ou noted. It took only four years from the discovery of 

rearranged NSCLC for Pfizer Inc to obtain conditional approval for the drug in August 2011. Ou said that before crizotinib, the discovery of 

-rearranged NSCLC was just information of “scientific interest.”

	Clinical trials to demonstrate improvements in outcomes or survival in patients receiving crizotinib are ongoing. “The next five years will tell us whether upfront treatment with crizotinib will be the standard of care for 

-rearranged NSCLC patients, as results from the first-line crizotinib randomized trial will be available,” Ou said in the article.

	Crizotinib’s properties as a multitargeted receptor tyrosine kinase inhibitor also are under investigation, particularly its role concerning activity of the 

 gene (mesenchymal epithelial transition), in NSCLC.

	Researchers are now working to combat the mutational development of crizotinib resistance in NSCLC patients. Second-generation 

The development of crizotinib has helped crystallize a relatively rare molecular subset of NSCLC and holds the potential for wider use in treating patients with the disease.

Marie Rosenthal, MS

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