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Financial Toxicity: Tracking a Growing Side Effect


Jeremy Schafer and Deborah Lotterman discuss the impact that financial toxicity is having on patients and payers and outline the strategies pharma need to adopt to begin to remedy it.

Durability of effect is generally a positive in medicine, but the continued rise in costs for pharmaceuticals is causing pain throughout the system.

While pharmacy benefit managers (PBMs) such as Express Scripts and CVS reported negative trends overall in 2016, many drug categories showed increases in both unit price and utilization.1,


According to Express Scripts, diabetes experienced a unit cost growth of 14.1%; HIV, 16.2%; and inflammatory conditions, 15.1%.1

Payers are coping with rising drug costs, in part, by shifting more financial responsibility to patients. A 2017 PBMI report found that substantially more employers used a coinsurance structure, requiring members to pay a percentage of healthcare costs versus a traditional flat copay.3 As drug cost goes up, so does coinsurance. Deductibles are growing too. A Kaiser report found that deductibles-80% of employees have one-have grown from roughly $600 in 2006 to nearly $1500 in 2016.4 Patients have typically been able to leverage manufacturer copay assistance programs to help pay for drugs and reach deductibles. However, new PBM programs introduced in 2017 may staunch copay assistance from contributing to the deductible.5 The net result is that patients are on the financial hook for healthcare like never before.

Identifying a new side effect

Growing patient financial responsibility in healthcare has introduced a new concept into the healthcare lexicon: financial toxicity. Financial toxicity has been defined previously, particularly in cancer, and describes the phenomenon of patients choosing, or forgoing, needed care based on the ability to afford it.6 Payers have some measures to combat financial toxicity including per-claim cost caps, and both Express Scripts and CVS touted stable or reduced costs for patients from 2015 to 2016.1-3 However, analyzing patient cost trends at a population level gives short shrift to the plight faced by individual patients in dire financial situations.

Facing an uncertain future

Ann, a former stay-at-home mom and longtime 4H leader, lives with metastatic breast cancer and gets by primarily on her social security income. Last year she was prescribed an oral cancer therapy at $9000 a month. Her Aetna insurance covered $7000 of that. Ultimately, Ann was able to get the drug free of charge from the manufacturer, but she’s been told that the assistance will run out in January. Ann is reluctant to think about how she’ll cover the costs. “I suppose I could pay the $2000, but it will deplete everything I have. If I can’t do what I want for as long as I can, what’s the point?”

Foregoing other medical needs

A former computer consultant, Sue has suffered for nearly 20 years with uncontrollable angina following a quadruple bypass. Eight years ago, her cardiologist prescribed an antianginal. She credits the drug with changing her life. She was able to work, hike, and swim.

Sue and her husband had lived abroad. They owned a number of rental properties, but they were hit hard by the housing market crash just as they were set to retire. She admits the $47-a-month copay for her cardiac prescription “doesn’t sound like a lot” but coupled with asthma drugs and insurance premiums, healthcare has become a significant portion of their fixed income.

Sue tracks all the costs-pharmacy costs and her copays-in a spreadsheet and she’s frustrated by the lack of transparency around pricing. “Why has a drug that’s been around for what, 10 years, gone up $200 a month? I don’t know who raised it-if the insurance company had a better negotiation or the drug company raised the price.”

But for Sue what’s most important is that she can take her antianginal twice a day; otherwise, the angina takes over. “I don’t go to doctors when they tell me I need to come back. I delay them because of the copays. I'm at the point right now where I should probably go to my dermatologist, and I don’t because it's another copay.” She’s also putting off dental work.

When the doctor is the patient

Nathan, a family practitioner, takes an oral cancer treatment to treat gastrointestinal stromal tumor, or GIST. Originally diagnosed in 2006, the cancer returned in 2016. As a doctor, Nathan sees financial toxicity from all sides of the equation.

When he was first diagnosed, he had to meet a $7000 deductible before the drug was covered. “The first thing you think,” he recounts, “is ‘I need better insurance.’ But when the alternative might be living or dying, obviously you go for the best option.”

For Nathan and his family, though the number was big, “we could tolerate that. I didn’t have to go rob a Circle K,” he chuckles. At present, his insurance coverage is far more comprehensive.

But each day in his practice, he sees patients who struggle. While most of the drugs he prescribes are not the high-priced therapies that dominate the headlines, they can cost patients hundreds of dollars a month. Some patients, he says, “make the decision they’re not going to do it. So they either don’t take them or they self-adjust.”

Nathan labels himself a realist and appreciates the complexity of the pricing system. In particular, he thinks drug companies have been unduly targeted. “Our experience [with drug manufacturers] has been pretty reasonable. They’ll give you extra samples if they know we have patients who are struggling. Or they guide you through their patient assistance programs.”

In this small sample, signs of financial toxicity were varied but felt by all.

Taking on financial toxicity

While financial toxicity is deeply felt on a patient level, it can also be seen on a population level as payers struggle to contain costs. The solutions will require engagement from all stakeholders: patients, providers, manufacturers, and payers.

For payers, an understanding of different patient perceptions of affordability is needed. What is “cheap” to some is “expensive “ to others. Programs like per-claim caps and ways to identify members at risk of avoiding care may help. For manufacturers, care should be taken when determining price increases as this cost is increasingly passed on to patients. Assistance programs should not be considered a universal fail-safe as program limits and new PBM initiatives make copay assistance less likely to address all patient needs.

For providers and patients, an honest and frank discussion on the cost of therapy is in order. Cost isn’t the most natural discussion point for HCPs, but increasingly it may be just as likely to be a reason for nonadherence as fear or lack of understanding, perhaps more so. Getting financial toxicity into the open will help all stakeholders understand the phenomenon and work on solutions to address it.

Deborah Lotterman is Chief Creative Officer at precisioneffect. Jeremy Schafer, Pharm.D, MBA, is Senior Vice President at Precision for Value.


1.     Express Scripts. Drug Trend Report 2016

2.     CVS, "

Trend drops to the lowest level in 4 years

", Insights, March 15, 2017.

3.     Pharmacy Benefit Management Institute, 2017 Trends in Specialty Drug Benefits Report

4.     Kaiser Family Foundation, 2016 Employer Health Benefits Survey

5.     "Court E. Like using that drug coupon? Its days may be numbered," MarketWatch,  July 12, 2017. 

6.     Johnson, CY, "The burden of cancer isn’t just cancer," Washington Post, April 8, 2016.

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