PE: Where do physicians fit into the equation, especially in a specialty field like oncology?
JH: There's an assumption on the part of pharma that there's a group of physicians who actively guide payers, in their assessment
of drugs, and thereby influence coverage. But if this is the case, it's a limited number of physicians.
Our company has done extensive surveying of medical oncologists and hematologists, asking how often they interact with payers,
and the low level of interaction surprised us. These are studies of about 250 medical oncologists, with about 30 percent academics
and 70 percent community-based—and only 8 percent of the total reported being routinely consulted by payers on clinical pathways,
formulary decisions, and reimbursement. So 92 percent of physicians have no interaction with insurance companies on formularies.
This suggests that payers are getting their information from the same pool of medical literature, and from attending the ASCOs
and other big cancer conferences, and then, like pharmaceutical companies, they will reach out to people that they believe
are experts for further guidance. And in that 8 percent, there was hardly a differential between academic and non-academic.
Many of these physicians are not necessarily thought leaders—they're high prescribers, and I'm guessing that may be the reason
they are being sought after by the payers.
TS: Payers, even medical directors within managed care organizations, are themselves physicians, but they really value the opinions
of practicing specialists. In an area as complex and rapidly evolving as oncology, getting this external insight is quite
important, especially if the payer is interested in making a decision that might restrict access to the drug. They want to
make sure that a particular restriction will resonate with the oncology community.
We tend to think of physicians in the US as really not having much pricing sensitivity or exposure to price. I think that
is starting to change. More and more in discussions with physicians in the US, I detect a feeling of social burden—a growing
awareness of healthcare costs that's also leading to these ideas of preferred protocols. You can think of it as another pilot
program around pay for performance—for certain disease tumor types, stages of disease, there would be a preferred approach
to therapy. And the idea is, if you hit that 80 to 85 percent of the time, you get reimbursed at a certain rate, and then,
below that, your reimbursement range would change.
JH: Oncologists have seen their income drop dramatically due to changes with Medicare Part D, and these economic interests also
probably influence the use of certain products. It's not a mystery that physicians have infusion suites where they've got
staff and they've got costs. I think in some cases, they tend to look for drugs that are infusion-based rather than oral-based,
so they can support their infusion suites. That said, most oncologists are interested in treating cancer as aggressively and
effectively as possible.
TS: The fact that your typical Medicare patient will have to pay thousands of dollars out of their own pocket for an oral agent
is a limitation. Whereas, for a physician-administered product, which would be under Medicare Part B, many patients don't
have to pay a cost share because they have supplemental insurance. But as it is, the donut hole is being phased out over time—and
essentially subsidized by the government and pharma.