Just 2 years after oncologist Raul Storey, MD, finished his training and joined a private practice in Vero Beach, Florida, he was already eager to make another change.

He and his partner Noor Merchant, MD, who founded the practice 30 years ago, found themselves battling a familiar set of confounding problems: patients who had to be turned away over insurance issues, limited access to new drugs, narrowing profit margins, and the demands of office administration.

So last October they took the plunge and merged with Florida Cancer Specialists & Research Institute, the nation’s largest independent, physician-owned medical oncology practice. Now they have relationships with 6 times as many insurers, a centralized business office, and access to more than 100 clinical trials, which Storey called “a dream come true for hematology-oncology.”

“We are able to basically focus on the clinical part of the treatment of patients with hematological diseases and cancer, instead of all the administrative business and work you have when you run a practice on your own,” he said.

The array of services and opportunities with which Florida Cancer Specialists & Research Institute provides its physicians, while still allowing them a high degree of autonomy, has proved a powerful draw since the group was founded as a solo practice by William Harwin, MD, in 1984.

The organization now boasts 180 doctors, most of whom are or will become partners, and 120 nurse practitioners, at more than 85 locations around the state. The total staff numbers more than 2000 across a variety of professions. The firm treats 50,000 new patients and takes in more than $1 billion in fees each year, more than 3 times the amount it collected in 2012.

The company has a practicewide electronic medical record (EMR) system, a central pathology laboratory, an oral oncolytics pharmacy, and on-site radiation facilities at many locations, as well as access to clinical trials through its partnership with Sarah Cannon Research Institute in Tennessee. Thanks to its size, the company can negotiate better drug prices and guarantee patients access to all FDA-approved chemotherapy and immunotherapy treatment options, Harwin said.

Harwin said he did not originally intend to turn his solo practice into a “great entity.” Initially it grew slowly, to just 48 doctors in 17 offices as of 2008. Over time, however, mounting economic pressures on small practices,the advantages of size, and a reputation for good management allowed Florida Cancer Specialists to become a merger machine and a poster child for the consolidation trend of recent years. By 2011 it had doubled in size to 40 sites and close to 100 doctors, and since then it has nearly doubled again.

 Another factor contributing to Florida Cancer Specialists & Research Institute's growth may be the state’s size and its large elderly population. Florida’s cancer rates are among the highest in the nation and it has the second-greatest number of people with cancer after California, according to National Cancer Institute data.

 The state has the fifth-highest number of oncologists after New York, California, Texas, and Pennsylvania, according to the Kaiser Family Foundation.

Florida also has seen the most mergers and acquisitions: from 2008 to 2014, at least 30 oncology practices have been acquired by hospitals and 46 by group practices and other non-hospital entities like Florida Cancer Specialists & Research Institute, according to the Community Oncology Alliance’s most recent Practice Impact Report.

Harwin, who practices in Fort Myers and serves as the company’s president, described its initial expansion as serendipitous. A radiation therapy group in adjacent Charlotte County told him the area needed better oncologists, so his practice started consulting there and eventually hired 2 doctors out of training to staff a new office, he said. Then a staff physician who wanted to be closer to family opened an office in Bonita Springs, a struggling practice in Naples asked for help and was acquired, and many others followed.

“In the early ‘90s, there was a lot of concern about managed care and how that was going, and the thought was, well, if we were a little bit larger we’d be in a better position to compete in what appeared to be a new healthcare environment,” Harwin said.

Unlike some other large groups, the business had a head start on the merger trend because it was already growing and benefiting from its billing efficiencies and economies of scale when the Medicare Modernization Act, passed in 2003, began slashing the profit from drug margins on which small oncology offices had survived. Florida Cancer Specialists & Research Institute was poised to start absorbing such practices as the financial pressures tightened.

The partners made the key decision to turn down acquisition offers from 2 companies that were precursors of US Oncology in favor of remaining independent, Harwin said. Florida Cancer Specialists & Research Institute also started making merger deals with larger groups of several doctors each, and growth further accelerated after CEO Brad Prechtl, a CPA who previously worked at US Oncology, joined the company in 2009.

“We’re enamored with the idea of still being a private practice group that’s physician-centric and patient-centric. We were never interested in becoming a publicly traded company,” Harwin said. “It doesn’t matter if it’s US Oncology or a hospital-based system; we just really like being in charge of our own business.”

And the growth continues. Among other projects, in December the group launched construction of an $11-million cancer center in Brandon, near Tampa, that will house a linear accelerator, PET/CT, and high dynamic range imaging equipment.

 The company is also spending $2.5 million to expand its corporate headquarters in Fort Myers, adding 21,000 square feet for administration and its Rx to Go specialty pharmacy.

Harwin said he’s much prouder of his work as an oncologist than his success as a businessman. He maintains a busy practice, dedicating just a day a week to his managing partner duties, and said that for 4 years he’s led the company in the number of patients participating in clinical trials.

But he said that all the back office support and infrastructure the company has built up over the years has helped Florida Cancer Specialists & Research Institute stand out in the field and prosper despite the headwinds the profession is facing.

Working on behalf of 180 doctors, specialized staffers handle contract negotiations, purchasing, drug regulations, purchasing, human resources, and the whole range of regulatory and compliance issues, he said.

“We have to be so careful with healthcare compliance. We feel like because we’re big there’s a target on our back. So we’re just so ultra-careful about everything,” he said. “Every bill that goes out for an office visit, there’s someone measuring and checking to make sure there’s a documentation that goes with that. If somebody billed an office visit and forgot to dictate or forgot to document, we’ll catch it. We have people really checking every little thing.”

Despite that vigilance, the firm was singled out in a 

 article last year for its oncologists’ frequent use of the anemia drug Procrit, which increases red blood cell levels but carries significant health risks.

Use of the drug declined nationally after 2007, when the FDA warned it was linked to increased stroke risk, tumor growth, and early death in cancer patients. Yet a number of Florida Cancer Specialists & Research Institute doctors continued using it frequently, and in 2012 one-sixth of Medicare payments to oncologists to administer the drug went to the company, according to the article.

Harwin responded that the group’s use of the drug was medically correct, Florida Cancer Specialists & Research Institute doctors were using it less often since 2007, and doctors had no financial incentive to choose a drug based on its margin. The firm also described the cited data as skewed because Florida Cancer Specialists & Research Institute's high volume of patients in various stages of cancer and with multiple conditions made use of Procrit necessary.

The company got in the news for a different reason when insurer Humana announced it would drop the group from its network in March 2014. Harwin said the insurer gave little explanation and didn’t respond to requests to discuss the decision. He noted that Humana CEO Bruce Broussard formerly headed US Oncology, a competitor that has lost 3 groups to Florida Cancer Specialists & Research Institute over the years.

The firm plans to keep growing and is currently talking to more doctors who are likely to join up, Harwin said. It recently came close to acquiring some groups in North Carolina, but big hospitals in the Charlotte area threatened to start hiring their own oncologists rather than work with Florida Cancer Specialists & Research Institute, scotching the deal, he said.

Expanding to another state is also tricky because, for regulatory reasons, practices in other states could not use the central laboratory in Florida, and the company would not immediately have a large enough presence in the new state to justify building another lab, he said.

While growth has many advantages, he admitted that he misses recruiting and knowing all his colleagues personally. “It’s impossible to have as personal a relationship with every doctor as I once had,” Harwin said. But he said that does not affect patients’ perspectives on their own doctors.

“The small, homey, close to home approach, that doesn’t change,” he said.

Storey said that when he and his partner were contemplating a merger, they weighed the potential downsides of being swallowed up by a large health provider. They considered joining a hospital but rejected that option.

“You are coming from having an independent practice, where you are your own boss and you make your own decisions, and then you become part of a big monster, you know?” he said. “We were worried about the potential of losing our autonomy and then having someone try to rule what you do or what you don’t. But that was not the case at all with Florida Cancer Specialists & Research Institute.”

Storey said he believes that in the near future small independent practices will no longer be able to survive, and that large groups like his company, offering many community oncology offices scattered throughout a multitude of towns, are the best solution to serve Florida’s population. The state’s handful of giant cancer centers are far from many people’s homes, he said, and on their own they cannot provide the access patients require.

Gordon M. Get bigger. Business Observer. http://www.businessobserverfl.com/section/ detail/get-bigger. Published July 11, 2014. Accessed May 15, 2015.

National Cancer Institute. State cancer profiles. http://statecancerprofiles.cancer.gov. Accessed May 15, 2015.

The Henry J. Kaiser Family Foundation. Physicians by specialty. http://kff.org/other/ state-indicator/physicians-by-specialty-area. Accessed May 15, 2015.

Rotolo C. Florida Cancer Specialists coming to Brandon in fall 2015. 

; December 12, 2014. http://www.tampabay.com/news/health/florida-cancer-specialists-coming- to-brandon-in-fall-2015/2210022.

Weaver C, Mathews AW, McGinty T. Cancer doctors ring up big Medicare bills for tarnished drug Procrit. 

; June 19, 2014. http://www.wsj.com/articles/ cancer-doctors-ring-up-big-medicare-bills-for-tarnished-drug-procrit-1403203821.

Articles

Florida Doctors Trade Independence for Security in Epicenter of Merger Wave

Being the first to do anything can be either easy or difficult, depending on the scale of the objective and the level of opposition one faces. The road to becoming the first biosimilar to go on sale in the United States has been uneven for Zarxio (filgrastim-sndz), a Sandoz product for raising white blood cell counts. It has potential, by virtue of its lower cost, to reach many who cannot currently afford the brand name equivalent.

The arrival of this product, which has already enjoyed commercial success in Europe under a different name, has been held up by legal proceedings initiated by Amgen, owner of the reigning brand Neupogen (filgrastim). Amgen objected that Sandoz’s application for marketing approval was incomplete, and the US Court of Appeals for the Federal Circuit in Washington agreed that there may be a basis to that objection. At press time, oral arguments on the case were scheduled for June 3, 2015.

It seems inevitable, however, that this delay will prove only temporary, and that Zarxio will soon become available in this country, followed by a slate of other replica drugs that Sandoz and other companies have in store. Indeed, “The biosimilars are coming!” may well be the revolutionary cry that leads to drug market rebalancing on the same order of magnitude as generics wrought. Generics—exact replicas of brand name drugs&mdash;have significantly lowered the cost of medicine, it is safe to say.

Biosimilars, on the other hand, have been successful in capturing market share in Europe, but US physicians worry that they will not be as effective or reliable as their brand name counterparts. This is because they are so complex to manufacture that minute differences exist between batches of the drugs. In the past 2 years, at least 23 states have considered legislation that would in some way regulate how these drugs are made available to patients and how much say doctors would have regarding whether biosimilars or brand name drugs are used, according to the National Conference of State Legislatures.

With a large number of major oncology drugs going off patent in the next 5 to 7 years, and with many drug companies planning their own versions of biosimilars, there is limited willingness among US oncologists to fully trust the FDA’s assurances that each biosimilar candidate will get a thorough and sufficient review before approval.

Laws governing biosimilars have already been enacted in some states, and legislative efforts have failed in many others, reflecting the diversity of opinion and the legislative muscle being exercised on all sides of this issue. In Europe, market penetration of these drugs has varied widely from country to country, serving perhaps as an indication that merely being a cheaper substitute is not a passport to acceptance. However, these drugs certainly have a foothold abroad. Zarxio, while waiting on the wings of the US stage, is currently marketed as Zarzio in 60 other countries, according to Novartis, parent company of Sandoz.

That cheaper biologics are needed in an age of soaring cancer costs is not a point that begs substantiation. It is what many would call a no-brainer. But getting to a place where Europe has already been for many a year, where biosimilars are widely used and accepted—increasingly so&mdash;seems likely to involve a process of battle and compromise that will continue long past this current Zarxio episode. Legislative debates over biosimilars are expected to play out in all 50 states.

The road to becoming the first biosimilar to go on sale in the United States has been uneven for Zarxio (filgrastim-sndz), a Sandoz product for raising white blood cell counts.

Zarxio Gets a Boston Welcome

In recent years, Thomas R. Barr and Elaine L. Towle have published what they consider to be one of the largest compilations of oncology practice clinical and financial data available: The National Oncology Practice Benchmark. One of their basic conclusions was that after a long period of revenue growth, practices were seeing tighter margins but also “becoming more mature, more efficient, and more self-aware.”

This spring, Barr and Towle are heading up a new data initiative, with the goal of helping practices to manage more successfully in an era of continuing, rapid change. The project is called PracticeNET, and it is an initiative emerging from ASCO’s Clinical Affairs Department designed to help practices learn from one another’s successes as they move farther away from fee-for-service (FFS) and toward increasingly cost-effective models of care.

Sharing data through PracticeNET will enable physicians to figure out what works best for them in the markets that they serve, says Barr, director of business metrics and analysis for ASCO. PracticeNET will also utilize provider data from the Centers for Medicare & Medicaid Services (CMS) which is issued in great abundance but is difficult for many practices to analyze efficiently.

“It’s as though we’re all on little islands and we are only allowed to communicate by steamship, which takes years for the message to arrive,” Barr says. Both he and Towle, who serves as director of analysis and consulting services for ASCO, have previously served in administrative roles at oncology practices and say they have each experienced the practice siloes that make it difficult to spot solutions. “When we started to understand that we could communicate with folks on other islands, that really opened our eyes to the possibility of collaborative learning,” Barr says.

ASCO is offering PracticeNET participation free for the first year, then $50 each month or $600 per year per physician. The services provided will be exclusive to enrollees, though some material may be distributed more widely, Towle says.

PracticeNET will gather and analyze data and provide guidance for practices that participate, Barr and Towle say. Each month, oncology practices will submit data that they already collect in various electronic forms. Barr and Towle will use that information along with publically available data to distill useful insight into practice management techniques that are most effective. Each practice will receive quarterly performance reports that summarize the findings and include recommendations.

“The operations and business metrics that will be shared and which we hope to be able to promote here will come from all of the individual practices,” Barr says. In addition, there will be networking opportunities and collaborative learning to facilitate continuous practice improvement.

“Oncologists have an urgent need to improve operational efficiencies and the patient experience in the midst of a rapidly changing practice environment,” ASCO President Peter P. Yu, MD, said in a statement. “While health services research provides an evidentiary knowledge base, practitioners need longitudinally benchmarked performance assessments and a venue with which to share best practices with their peers.”

Barr defines “longitudinal benchmarking” as identifying ways in which oncology practices are moving as a group and then striving to help individual practices understand how they can continuously improve. The goal is to keep fine-tuning the guidance so that practices can maintain success under changing conditions, Barr says.

To achieve this mission, PracticeNET is looking for broad participation and aims to have 200 practices enrolled by the end of the first year. “Ideally it will grow bigger than that. The numbers will help drive the value of the information,” Towle says. To improve the relevance and value of the data returned to physicians, PracticeNET will create cohorts of practices according to like characteristics. “We may have a small practice cohort and a large practice cohort,” Towle says. Practices may be grouped according to their participation in CMS’ Oncology Care Model or by their involvement in programs that serve the disadvantaged, such as safety net hospitals. “Those are some of the things we have been thinking about,” Towle says.

Outside consulting businesses have not overlooked the potential big data can offer to oncology practices. Altos Solutions is one such business that has hung its shingle in the oncology market, offering financial and clinical solutions based on industry-wide metrics. The company was acquired by Flatiron health Inc last year, aided by funding from Google Ventures, which also has invested in DNA archiving, next generation DNA sequencing, and hospital discharge and readmission analysis.

More information about PracticeNET is available by visiting www.asco.org/practicenet.

View more from the 2015 ASCO Annual Meeting

PracticeNET is an initiative emerging from ASCO's Clinical Affairs Department designed to help practices learn from one another's successes as they move farther away from fee-for-service and toward increasingly cost-effective models of care. 

ASCO Offers Data Sharing to Help With Value Transition

The growing use of genetic biomarker tests to screen, monitor, diagnose, and treat patients with cancer has the potential to improve outcomes and reduce costs 

, but payment systems for covering and reimbursing for these tests have fallen behind the times.

Insurers tend to require evidence of value before approving payment, which often involves doing the test first in the hope that it will be covered; and testing for multiple gene mutations at once, rather than doing costly individual tests, is a practice not yet fully accepted by payers.

“These biomarker tests are increasingly useful and valuable to help refine the prognosis of patients,” Richard L. Schilsky, MD, chief medical officer of ASCO, said in an interview. “They are becoming critically important for selecting the right therapy for patients.”

Traditional biomarkers measure individual protein molecules, such as prostate-specific antigen (PSA). But new and emerging technologies used in cancer detection and treatment encompass single nucleotide polymorphism (SNP) analysis, genomic and proteomic profiling, epigenetic profiling, and gene expression profiling. These new technologies carry the promise of a greater level of individualized disease management.

Biomarkers can inform from predictive and prognostic standpoints. As a predictive tool, biomarkers can help determine whether a person’s cancer will respond to a specific treatment, in addition to providing in-depth biological data that lead to better patient outcomes through more accurate diagnoses and optimal treatment routing. From a prognostic perspective, biomarkers can provide estimates of the chance of recovery or recurrence of a cancer.

If payment for the tests is difficult or impossible to obtain, doctors may be forced to substitute less than ideal means of diagnosing patient conditions. Biomarker tests can identify therapies most likely to work for patients, and also therapies that are unlikely to work so that patients can seek better alternatives.

“We need to be able to use the tests in a responsible way,” said Schilsky, “and we need to demonstrate that the tests produce clinically meaningful information for patients.”

But in the current reform environment “The reimbursement on these tests has dramatically decreased over the last 2 years,” says Alvin Martin, MD, medical director for pathology and laboratory services of Norton Healthcare, a network of 5 large hospitals, 12 immediate care centers, and more than 90 physician practice locations in Kentucky. “If it drops any more it will become much more difficult for us to adequately perform these tests.”

Tissue Limitations Make Comprehensive Testing More Practical

Physicians are less likely to encounter payment problems for companion diagnostic tests, which are usually laboratory tests that are co-developed with the drug and approved by the FDA at the same time as the drug. Drug reviews are conducted in the FDA’s Center for Drug Evaluation and Research and the companion test is reviewed by the Center for Devices and Radiological Health, under its separate procedures for medical devices.

Reimbursement and insurance coverage problems are more likely to plague next generation sequencing (NGS) that uses multiple assays. Complicating the issue is the fact that more tissue is needed to conduct a large number of different assays than for a single NGS test that examines for multiple biomarkers.

“Human tissue is precious and not easy to come by,” says Schilsky; “that’s a practical issue.” A limited amount of tissue is available for testing, and each individual test consumes some.

“For a lung cancer patient, it would now be considered standard to test for EGFR mutations or ALK translocations. I could order a test that would require me to send a separate tissue specimen for each of those genetic abnormalities individually, which would require a lot of tissue.”

		Table. Use and Potential Economic Value of Cancer Biomarkers

		Source: Schneider JE, Sidhu MK, Doucet C, et al. Economics of cancer biomarkers. 

Schilsky adds that there’s a scientific component as well. The advances being made have brought a greater understanding of the fact that gene mutations don’t act in isolation. “If you have a tumor that’s overexpressing HER2 and you’re thinking about giving an HER2 antagonist, you may also want to know if that tumor also has a P10 mutation, which seems to confer resistance, in some cases, to HER2 therapy.” This makes it more important to conduct a comprehensive test, for which payment may not be available.

“Ultimately, that’s why multi-assay tests are becoming more and more popular and more and more useful in many cases,” says Schilsky.

There is no Current Procedural Terminology (CPT) billing code for next-generation sequencing, so how the oncology practice bills Medicare is often a case of creative coding. Physicians solve the problem by ordering multiple single tests, which are CPT-coded.

“For a patient with colon cancer, we might first order a microsatellite instability (MSI) test. Then based upon those results, we’ll go through an algorithm of testing for KRAS mutation, NRAS mutation, and BRAS mutation,” says Martin.

“How we would break this out with next generation sequencing is through organ specific panels,” says Martin. “The testing is a little more expanded, but it’s virtually the same type of testing that we do for colon and lung cancer and for some of the hematologic malignancies.”

Individually, commercial insurers decide whether biomarker testing will be required before they cover the targeted therapy. As such, some insurers will likely require evidence for biomarker testing—and submission of the testing results&mdash;prior to coverage and reimbursement of the targeted therapy.

Other insurers may require patients to sign a waiver of acknowledgment that they are not candidates for a certain therapy if the insurer approves payment for biomarker testing and the results come back negative.

To ensure the coverage and reimbursement they need, physicians must document more carefully and make decisions that underscore the value of genomic testing, Schilsky says. “At the end of the day, I think collectively, the oncology community needs to demonstrate the value of whatever test we want to see reimbursed. By value I mean that we have to show that the test really guides a clinical decision, and that using the test results in decisions that lead to better patient outcomes than if the test were not available.”

The oncology community is in a position to develop that evidence, so that insurers can feel comfortable about reimbursing for those tests, says Schilsky. “All insurers can do is examine the evidence that we as a medical community or oncology community can help to generate to support our hypothesis or our proposition that a test should be reimbursed.”

For the individual practice, determining which tests are reimbursed takes a lot of prior authorization legwork, says Martin.

“You have to know what insurers will and will not reimburse,” says Martin. “You have to know if you need prior authorization on these tests. There may be ‘carve-outs’ where this type of testing can only go to a certain lab.”

At an integrated system such as Norton Healthcare, the power of multiple-user access to electronic medical records can be helpful, Martin says. “Sometimes we have to get the clinicians involved because the insurance companies want some type of medical records from the oncologists as part of prior authorization.”

Michael Driscoll, MD, a medical oncologist with Norton Healthcare, says that in a community setting in which the practice is working with one or more hospitals, it helps if the individual pathology departments have best-practices protocol already outlined ahead of time.

“Depending on what the pathology shows on the specimen with respect to tumor type, determining which molecular testing should be done really does need to be worked out ahead of time. That would potentially save time and money and resources,” Driscoll said in an interview.

In addition, it’s important that there be clear communication between the oncologist, who orders the test, and the medical specialist, who will actually do the biopsy. This helps to ensure the quality of the biopsy sample, which can lead to a better test result—and therefore an increased likelihood of payment.

”There are technical issues that need to be addressed, like having a certain amount of tumor DNA in order to perform a specific test,” says Schilsky. “The amount that you need varies depending upon the test you’re performing.”

Often, an interventional radiologist faces the difficult task of identifying the optimal location from which to take the biopsy sample. Whether that specimen is reflective of the true underlying genomic profile of the tumor is questionable, says Schilsky.

“You want to be on the same page,” says Schilsky. “There should be an actual conversation between the oncologist, who is depending upon a good quality test to guide their management of the patient, and the medical specialist, who is actually going to be doing the biopsy procedure, so at least the person performing the procedure is clear on the reason for the biopsy, what test is likely to be performed, how the results are going to be used. Maybe that somehow influences how they perform the biopsy procedure.”

He said the process could be improved if there were well-established and widely published guidelines for how to perform a tumor biopsy, obtain the tissue, handle the tissue, ship the tissue, and store the tissue for different kinds of genomic analyses.

“We have brought this point up to the College of American Pathologists and are urging them to see if they can develop guidelines for their pathology members.” The goal is to establish “a uniform standard that can be available in hospitals around the country that can guide people who are acquiring these specimens as to the minimum standards they need to meet to ensure a specimen of acceptable quality,” says Schilsky.

The growing use of genetic biomarker tests to screen, monitor, diagnose, and treat patients with cancer has the potential to improve outcomes and reduce costs, but payment systems for covering and reimbursing for these tests have fallen behind the times.

Physicians Struggle With Antiquated Reimbursement for Next-Generation Testing

The rising number of oral oncology drugs that can be supplied through pharmacy networks rather than administered in clinical settings, such as intravenous drugs, has many physicians worried that they are losing control of an important part of the therapeutic process.

The Community Oncology Alliance (COA) is stepping into the fray by forming a pharmacy association that will strive to represent the interests of oncology practices, particularly those that already have dispensaries or that intend to set them up. The number of in-house dispensary operations is growing, says Ted Okon, executive director of the COA, and at stake in this struggle are control over revenues and control over continuity of care and drug revenues.

On the revenue side of the equation, more and more oncology drugs are orals, which can be dispensed through a retail pharmacy or through a specialty pharmacy with a contract to issue a particular drug, rather than through a doctor’s office as intravenous medications are administered. Oncologists who dispense drugs are concerned about their ability to continue to fully care for their patients with infused drugs as well as by dispensing oral oncolytics, Okon says.

“Oral drugs are on the rise—25% to 30% of the drugs in the research pipeline are oral oncolytics. When you see that, that sort of catches your eye. You have to be thinking about those,” Okon says.

Drugs make up a sizeable portion of oncology practice revenues. A 2007 report in the Journal of Oncology Practice indicated that among a sampling of 164 oncology practices, drugs represented 77% of practice revenues, and drug administration amounted to 9% of revenues, while patient evaluation and management services represented 12% of revenues.2 If oral oncology drugs in the clinical testing and approvals process make up 25%-35% of all oncology drugs in the pipeline—according to a widely accepted industry estimate&mdash;a change in the point of dispensing for orals could have an impact on practice finances.

Injected and infused drugs have not presented such a problem for physicians because they are typically covered under the medical benefit and are administered in a clinical setting. Oral drugs, conversely, are covered under the pharmacy benefit and can be self-administered by patients at home. As more drugs switch over to the pharmacy benefit, quality and continuity of care could suffer if specialty pharmacies gain by attaining exclusive control over distribution rights, Okon says.

On the other side of the balance is the question of whether a patient will actually receive and properly ingest the oral medicine that has been prescribed for him, Okon says. Studies have shown that non-adherence is a significant issue, and it becomes more of an issue as drug prices creep skyward and out-of-pocket expenses rise with the higher deductibles and typical of the many cost-saver health policies in vogue.

“When a patient finds out what they have to pay, a lot of times they don’t get the medicine,” says Okon. “It becomes a problem of treating the patient. If you are dis-joining the providing of the drug from the point of care, you’re going to have all sorts of problems.” Indeed, a study sponsored by COA in conjunction with Avalere Health found that when it comes to oral oncolytics, patients with Medicare and those with lower incomes abandoned their therapies almost twice as often as their commercially insured counterparts.1 The 2010 study found that 46% of Medicare patients had cost shares in excess of $500 versus 11% of commercially insured patients, and the study also found that patients with out-of-pocket expenses in excess of $500 were four times as likely to abandon their therapy. The actual rates of abandonment were 16% for Medicare and 9% for commercially insured patients.

Among its tasks, the COA pharmacy association would work to establish standards for in-house dispensaries to improve safety, but representing the interests of the oncology provider community is paramount, Okon noted, citing a recent, unpublished COA survey of 500 of its members that showed that 80 practices who responded were in the process of setting up dispensaries.

Dispensing high-priced oral oncolytics can be lucrative, says Kevin Colgan, associate vice president of the UHC Specialty Pharmacy Program. This is especially true as the price of oncology drugs continues its ascent into the stratosphere. “The average annual cost for a branded drug in 2013 was $2960 per year or about $250 per month. Even though costs have been rising at 12% per year, we are still only looking at $300 per month for a branded non-specialty drug. The profit on that prescription is 10% or approximately $30. If you compare that to a specialty oncolytic drug like Xalkori or Zykadia for ALK+ non-small cell lung cancer at $12,000 per month and a profit of 5% per prescription ($600), the difference is substantial.” The catch, he says, is that with a high priced oncology specialty drug the care and complexity of handling the drug may eat up some of the profit.

Colgan is not convinced that oncology practices are always the ideal place for the dispensing of oral drugs. He says the specialty pharmacy industry has evolved many competent, multi-level processes for distribution of drugs and for the management of patients who require guidance on taking medicine and also follow-up attention to ensure that they remain adherent to their treatment regimes. The resources specialty pharmacy can bring to bear on a particular case of care often far exceed what the standard oncology practice has at its disposal, he says. Often, only the larger practices have the expertise and the support that specialty pharmacies in integrated care networks have developed, he says.

Citing an example, Colgan told the story of a 26-year-old with bowel disease. “She had probably gone on a health exchange plan and selected a plan that was less expensive, and her copay went from $5 to $1000,” he said. “She couldn’t afford that so she quit taking the medicine. Three months later she calls the physician and says ‘I’m ill and I need some medication I can afford or I’m going to have to come to the hospital.’” In this case, an integrated care network pharmacist helped the patient to resolve her financial need and brought her copay down to $5 with a copay assistance card,” Colgan said. “The physician had no idea she’d ever abandoned therapy.”

CVS/Caremark, for example, one of a number of specialty pharmacies, claims to be able to keep patients “on track” via a roster of services that include round-the-clock pharmacists and nurses, who set dosing schedules, answer questions, respond to concerns when side effects develop, and check to make sure that patients stay on their medication.

Not everyone agrees, however, that patients are getting the attention they need from the specialty pharmacy industry. A report on oral therapies and adherence by the group eyeforpharma sounded a note of concern about what it described as fragmentation in the specialty pharma and integrated care industry, noting a lack of standardization that it said contributed to widely varying results for the patients it serves.3 “Different pharmacists are managing different drugs from different vendors within different silos, so there is no single pharmacy program managing the entire treatment protocol for any given patient,” the report said, quoting Michael Kolodzeij, MD, FACP, national director for Oncology Solutions, Aetna.

Expanding on the observation, the report quoted Burt Zweigenhaft of Onco360 Oncology Pharmacy, who said the silo approach “results in clinical fragmentation, lack of benefits coordination, and failure to harmonize support around side effects, adverse events and potential drug-drug interactions [and] literally sets up the patient for clinical failure.”

Okon says such concerns contributed to the decision by COA to set up the Community Oncology Pharmacy Association. “What we realized is there’s really a need for more consistency and standards relating to the quality of dispensing or retail pharmacy,” he says. “With oral drugs, it’s really important.”

Joshua Cox, PharmD, director of pharmacy services for Dayton Physicians Network in Dayton, Ohio, says his practice of 32 physicians—including 18 medical oncologists and 7 radiation oncologists, set up an in-house dispensary three years ago. The dispensary was developed because the doctors there felt that they were in the best position to provide patients with high quality service with the best value; earning a profit from the dispensary enterprise wasn’t as important as ensuring that it would pay for the extra manpower and overhead involved in maintaining the operation, Cox says.

“There are many insurance hoops that have to be jumped through and a lot of counseling that is required, and patient education,” Cox says. “In order to make sure patients have the highest level of access and the most rapid turnaround times, we decided to begin providing that service.”

While the specialty pharmacy industry claims to offer comprehensive follow-through care for patients, Cox says the dispensary achieves that goal by putting doctors side by side with a pharmacist when treatment decisions are made and working with patients throughout the process to ensure that they obtain and take their medications. “Our financial counseling staff is very adept at making sure we exploit every resource available to patients, whether that is through some sort of manufacturer copay discount card, some assistance, or any other type of foundation assistance that’s available in the community. We’re able to get assistance for patients and get their out-of-pocket responsibilities reduced dramatically.”

Specialty pharmacies have approached the Dayton practice on various occasions seeking to provide certain medications that the practice cannot otherwise obtain for patients there. “There are times when the payer will deny us the ability to provide patients with a specialty medication, and those patients are forced to go somewhere else. Typically the specialty pharmacies that approach us are seeking to obtain that business from us. Operationally, we tend to stick with one or two as opposed to creating a dozen different processes for a dozen different specialty pharmacy entities,” Cox says.

Doctors may see more and more “house calls” by specialty pharmacies, as the newer orals tend more often to involve high costs, special handling and administration, and complex patient conditions requiring close monitoring. “Most of today’s oral oncoloytics are in a class called kinase inhibitors which … bring a different set of side effects, such as extreme sub-cutaneous rashes and diarrhea,” which can require hospitalization,’ the eyeforpharma report stated. “Sending the patient home to take these complex drug regimens on their own is really a huge leap of faith,” Zweigenhaft stated.

Colgan believes manufacturers are going to want to see these drugs delivered through specialty networks, and he believes that especially in the case of drugs with limited potential users, it makes the best sense.

“If a drug is utilized to treat a large population, such as drugs for hepatitis C, those will go through the traditional channel. This is only because specialty pharmacy providers would have a difficult time handling all of the volume even though these drugs may be classified as specialty pharmaceuticals and require additional patient support,” Colgan says.

“If a drug has a market of fewer than 400,000 patients and requires additional patient care, teaching, clinical coordination and reimbursement support, it is probably best handled through a specialty pharmacy channel.”

In addition, he says, specialty pharmacy networks that deal with large populations of affected patients are probably going to receive preference for specialty drug contracts simply because it makes the best sense monetarily for manufacturers.

“If you look at the epidemiology of non-small cell lung cancer, there’s about 210,000 patients. We looked at our data and within our system, UHC, we treated 138,000 last year. That’s about 62% of the patients. So, you’re probably not going to put your channel for that drug with somebody who’s not doing a lot of work. That’s a really important concept. They want a stickiness to make sure the drugs produce. I understand the manufacturer’s perspective and they have a fair amount of control over that—is what it amounts to&mdash;so I think that will continue,” Colgan says.

Okon and Cox say that specialty pharma is already aggressive about capturing a large share of the oral oncolytics market and that oncologists need to need to speak up for patient care and for themselves.

“We in the oncology environment feel strongly that there is value in making sure that patients’ care can be provided from the medical oncologists’ offices, and that we are best positioned to provide the highest value care,” Cox says. “I think the lobbying is certainly coming from all sides and will likely continue. I can’t foresee personally how the legislation will change, if at all, in the future, and how it will affect us. Certainly, that battle is ongoing.”

			Barnes L, Burich M, Little A, Nowak M, Haroldson B. Oral Oncolytics: addressing the barriers to access and identifying areas for engagement. Avalere. http://www.communityoncology.org/pdfs/avalere-coa-oral-oncolytics-study-summary-report.pdf. Published February 2010. Accessed May 14, 2015.

			Akscin J, Barr T, Towle E. Key practice indicators in office-based oncology practices: 2007 report on 2006 data. J Oncol Pract. 2007;3(4):200-2003. Doi: 10.1200/JOP.0743001.

			eyeforpharma. Oral therapies in the oncology marketplace. http://img03.en25.com/Web/FCBusinessIntelligenceLtd/%7B21eb8791-89ed-4528-8b94-fc61f3900f65%7D_2742_10APR15_Content_Oral_oncology-marketplace.pdf?utm_campaign=2742%2010APR15%20Content%20Oral%20Autoresponder&utm_medium=email&utm_source=Eloqua. Published February 2, 2015. Accessed May 7, 2015.

The rising number of oral oncology drugs that can be supplied through pharmacy networks rather than administered in clinical settings, such as intravenous drugs, has many physicians worried that they are losing control of an important part of the therapeutic process. 

Drug Revenues May Migrate to Specialty Pharma

The FDA’s approval in March of the first biosimilar drug for the US market has aroused much concern among physicians, who fear that these complex drugs will not be perfect substitutes for the branded drugs they will replace and who insist that certain standards be attached to their approval and distribution.

“There is no doubt that biosimilars will play a large role in the future treatment of our patients, and hopefully that they will fulfill their goal of bioequivalence and decreased cost,” said Hillary Hahm, MD, a medical oncologist with Northwest Georgia Oncology Centers and also a board member of the Georgia Society of Clinical Oncology (GASCO). “However, there need to be safeguards concerning the development and clinical use of each of agents, so that our patients are assured the best possible treatment from both an efficacy and safety standpoint.”

Georgia is one of at least 23 states so far whose legislatures have considered regulating the prescription, doctor and patient notification, recordkeeping, and approvals of biosimilars. GASCO has sought to block legislation in Georgia that would allow Georgia pharmacists to dispense biosimilar drugs as a substitution for brand name drugs without physicians being informed about the substitutions.

Melissa Dillmon, MD, president of GASCO and a medical oncologist at the Harbin Clinic in Rome, Georgia, is pushing for a requirement that pharmacists notify physicians and patients about potential biosimilar substitutions. “The patient has to know they are not getting the same thing, and the physician has to be notified,” said Dillmon, adding that the US has no track record on researching the safety and efficacy of biosimilars.

Biosimilars—complex molecule drugs that are administered intravenously&mdash;have been marketed in Europe since 2007, and they are now entering the US via a pathway established by The Biologics Price Competition and Innovation Act of 2009, as part of the Affordable Care Act.

 The first FDA-approved biosimilar is Zarxio (filgrastim-sndz), a Sandoz drug that can boost white blood cell counts for cancer patients whose immune systems have been weakened by chemotherapy. The drug would compete with Amgen’s Neupogen, whose patent expired in December 2013.

There are legal obstacles to overcome before Zarxio is offered for sale. Amgen has challenged the sale of the drug, saying it was not given sufficient notice by Sandoz that the company was about to launch a biosimilar that would compete with Neupogen. In late March, a federal judge in San Francisco dismissed Amgen's claims, which led to an appeal in the US Court of Appeals for the Federal Circuit in Washington. This decision, which was handed down on May 5, blocked Zarxio from entering the market until oral arguments could be heard. The next court date is scheduled for June 3, 2015.

In granting approval, the FDA stated that Zarxio would not be regarded as “interchangeable” with Neupogen, despite its close similarity and “biosimilar” status.

 This means it cannot be substituted for Neupogen without the involvement of the prescribing physician. Much of the controversy surrounding biosimilars has to do with the variability of the manufacturing process of these large molecule drugs, which vary slightly from one batch to another in the same factory and also among batches produced by brand name manufacturers.

Many more biosimilars from Sandoz are on the way. Those that are undergoing or have completed clinical trials and are in line for FDA consideration include pegfilgrastim (comparable to Amgen’s Neulasta) for chemotherapy-induced febrile neutropenia; rituximab (comparable to Rituxan/MabThera) for patients with rheumatoid arthritis and follicular lymphoma; epoetin alfa (comparable to Johnson & Johnson’s Procrit and Eprex) for patients with anemia associated with chronic kidney disease; etanercept (comparable to Amgen’s Enbrel) for patients with plaque psoriasis; and adalimumab (comparable to AbbVie’s Humira) for patients with plaque psoriasis, according to Sandoz.

In contrast to generics, biosimilars aren’t perfect copies of brand name drugs, and as a result “all 50 states either have or will be reviewing their pharmacy laws about how to offer substitution,” predicts Mark Fleury, the policy principal of emerging sciences for the American Cancer Society Cancer Action Network (ACS CAN), a Washington, DC, group that advocates on behalf of patients. “Because all the existing laws are written for small molecules, not biosimilars, you can’t just apply the same law. The drugs are highly similar but may not be exactly the same. It boils down to the issues of consent and notification and what is considered interchangeable, and each state has to figure out how they want to handle it,” Fleury said.

ACS CAN is optimistic that biosimilars, like generic medications, could reduce the cost of potentially lifesaving therapies and make them easier to access for patients. The group wants the FDA “to quickly finalize guidance on naming, labeling, and interchangeability criteria, so that biosimilars’ development can move forward and patients are assured of transparency and safety.”

When it approved Zarxio, the FDA gave it the nonproprietary name filgristim-sndz, which differs from the Neupogen version in that the suffix “sndz” is attached. This is intended to distinguish it as a biosimilar, but the FDA said it continues to work on an acceptable labeling system for biosimilars. GASCO contends that biosimilars should stay off the US market until such issues are fully resolved.

“The FDA must complete their work in approving and classifying the new biologicals as either biosimilar or interchangeable before the physicians can use them in this country,” said GASCO Director Karen M. Beard. “They are not the same as generics where the generic manufacturer uses the same active chemical ingredients after a drug comes off a patent. The biosimilar and interchangeable drugs are more complex structures derived from many sources of molecules, including human, animal and microorganisms, such as bacteria or yeast. The sources may be natural or synthetic. Physicians and patients must be assured by the FDA that it produces the same results as the original drug with no adverse side effects.”

Both the FDA and Sandoz say that the approval of Zarxio was based on a thorough review of clinical safety and effectiveness data. Sandoz currently markets the non-US version of Zarxio, called Zarzio, in 40 other countries, and used “a comprehensive package of analytical, nonclinical and clinical data, which confirmed that Zarxio is highly similar to Neupogen,” Sandoz said in a written statement. “We also presented results from post-marketing studies, and post-marketing pharmacovigilance data from use of the product in Europe and other markets. Taken together, these data provided the totality of evidence necessary to establish biosimilarity” of Sandoz’s filgrastim biosimilar to Amgen’s Neupogen, the company said.

“Just as it does for other drugs, the FDA undertakes a rigorous and thorough evaluation to ensure a biologic’s safety and effectiveness before it is approved,” FDA spokesman Kristofer Baumgartner said in a written statement. Biosimilar products can only be approved if they have the same mechanism(s) of action, route(s) of administration, dosage forms and strengths as the reference product, and only for indication(s) and condition(s) of use that have been previously approved for the reference product, he added.

Different Names Are Possible Source of Confusion

Potential problems abound in the choice of nonproprietary names that are assigned to biosimilar drugs. Both the FDA and drug manufacturers rely on what are called “spontaneous report adverse event reports,” submitted by physicians, pharmacies, or patients, to report any adverse effects from using Zarxio or any other medications, said Greg Daniel, PhD, a fellow and managing director at the Center for Health Policy at the Brookings Institution based in Washington, DC. “Because many of these reports do not include unique codes to identify the specific drug, [the] FDA and manufacturers often have to rely on the drug names listed in the report when analyzing spontaneous report databases.”

With the subtle differences between biosimilar drugs and their brand name counterparts, even from batch to batch, Daniel speculated, it will be especially important to distinguish each product in the safety reports once they are in use in the US. With nonbiologic small molecule drugs, such as Tylenol, Lipitor or Advil, the chemical structures of the drugs are identical between brand and generic versions, and the need to distinguish between products isn’t as critical from a safety perspective, said Daniel.

Hospira, a drug company that markets biosimilars in Europe, argued in a recent position paper that allowing identical nonproprietary names for biosimilars would enable physicians to more easily recognize similar drugs and would simplify reporting on adverse events and other issues.

 “Adding prefixes and suffixes to biologic products historically means that something is clinically different with a drug. That is not the case with biosimilars, which are approved by regulatory agencies to have similar clinical results as a brand name biologic drug,” Hospira wrote.

One concern with having a different generic name for a biosimilar product, compared to its reference product, is that it might signal to providers and patients that the biosimilar drug is somehow inferior, because it’s perceived as less effective or less safe, said Daniel. “This could unnecessarily slow the uptake through less utilization of the product, which could happen if people perceive the original reference product as being better," he added.

“If there is less utilization of biosimilars than there really should be, the potential for large savings to patients and the health care system as a whole might not be as great,” said Daniel. “There are a lot of dollar savings that can be brought into the healthcare system.”

Generic medications cost about 80-90% less than the name brand drugs, while most people are expecting a 20-40% discount on biosimilars, as compared to the brand name drug, Fleury said. “The intrinsic cost to manufacturers for biosimilars is higher, while with generics, when you strip away the research and development costs, it may only cost a few pennies per pill to make,” he said.

Because biosimilars aren’t yet available in the US, it’s still unclear how pricing will work. Sandoz would not disclose details about how Zarxio will be priced once it is available. And insurers and pharmacies may also play a role.

“What you may see is pharmacy benefit manufacturers pitting manufacturers [of biosimilars] against each other in order to drive costs down,” said Fleury. “It could be that unless you provide a low-enough price, a health insurer may not put that version of a biosimilar on the formulary.”

According to research published in 2013 by the pharmacy benefits manager Express Scripts, if the 11 likeliest biosimilars enter the market over the next decade, biosimilars could help save $250 billion in healthcare costs by 2024.

 Similarly, the research organization the Rand Corporation in 2014 predicted a more modest but still notable healthcare savings of $44 billion over the same period.

Though they are concerned about drug performance, physicians do have a measure of control in that Zarxio and other potential cancer biosimilars are administered intravenously, and are typically taken episodically, as opposed to over-the-counter medications that patients will pick up at the pharmacy themselves. “These are all injectibles that are given in a hospital or at a physician’s office, or infused like chemotherapy,” said Dillmon. In these cases, the physician is more likely to be able to speak directly with a pharmacist before the biosimilar is used by the patient, so that the physician can speak about their concerns about safety and other issues.

Dillmon said that it’s very important to her to be able to weigh in on whether a biosimilar is going to be used in treatment of one of her patients. “I would personally have to have a discussion with the insurance company about my preferences as a physician,” she said.

			Rovira J, Espín J, García L, Olry de Labry A. The impact of biosimilars’ entry in the EU market. EMInet. http://ec.europa.eu/enterprise/sectors/healthcare/files/docs/biosimilars_market_012011_en.pdf. Published January 2011. Accessed May 12, 2015.

			FDA News Staff. FDA approves first biosimilar product Zarxio. http://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm436648.htm. Published March 6, 2015. Accessed May 12, 2015.

			Ramachandra S. What’s in a name? The importance of biosimilar nonproprietary names for healthcare innovation. Hospira. http://www.hospira.com/Images/What%27s%20In%20a%20Name%20-%20Hospira%20Policy%20Paper%20-%20Oct%202013_81-92092_1.pdf. Published October 2013. Accessed May 12, 2015.

			Express Scripts. The $250 billion potential of biosimilars. http://lab.express-scripts.com/insights/industry-updates/the-$250-billion-potential-of-biosimilars. Published April 23, 2013. Accessed May 12, 2015.

			Rand. Biosimilar medications could create billions in health care savings. http://www.rand.org/news/press/2014/11/03.html. Published November 3, 2014. Accessed May 12, 2015.

The FDA's approval in March of the first biosimilar drug for the US market has aroused much concern among physicians.

June 2015 | Oncology Business News®

Florida Doctors Trade Independence for Security in Epicenter of Merger Wave

Zarxio Gets a Boston Welcome

ASCO Offers Data Sharing to Help With Value Transition

Physicians Struggle With Antiquated Reimbursement for Next-Generation Testing

Drug Revenues May Migrate to Specialty Pharma

Doctors Unwilling to Trust Similarity of Biosimilars