For immediate release
Tuesday, Sept. 12, 2006
12:01 a.m. EDT


Christopher Fleming

Medicare Part D Greatly Expands Access To Cancer Treatments, Says Study In Health Affairs Biotech Theme Issue 
Leading Health Policy Journal Also Looks At The Effects of Medicare Reimbursement On Drug Use, “Coverage With Evidence Development,” And More

Bethesda, MD -- A new analysis of Medicare Part D shows that the program greatly expands Medicare beneficiaries’ access to cancer therapies. In addition, copayments for the medications are low, according to the study, published today in the journal Health Affairs.

The analysis of nearly 3,000 plans in Part D reveals that virtually all plans cover most cancer drugs, including brand-name drugs, and the drugs most often covered by plans have low copayments. But some cancer drugs -- particularly brand names -- require prior authorization from a physician before the pharmacist can fill the prescription, which potentially limits patients’ access to the treatments. The study is available at

Jennifer Bowman, a director at Avalere Health LLC, teamed with colleagues at Avalere to review the formularies of the nearly 3,000 private plans administering prescription drug benefits to patients through Medicare Part D. Virtually all generic versions of cancer drugs were covered, 70 percent of brand-name drugs were covered, and, the authors note, most often when a brand name was not covered, a generic equivalent was available. Furthermore, fixed-dollar copayments were a much more common form of cost sharing than coinsurance. Copayments ranged from $5 to $40 for the twenty cancer drugs most frequently found on plans’ formularies.

Less than 5 percent of the plans had quantity limits regulating the amount of the drug supply a patient can get at one time, and no plans required step therapy, where patients have to fail on one drug before they can be given another.

However, prior authorization was required significantly more often for brand-name cancer drugs than for generic drugs. “This means that patients can have a very different experience in terms of their access to drugs, depending on the type of cancer they have and the specific type of drugs they need.” said Bowman. She and her coauthors also note that their study does not address access to cancer drugs in the infamous “doughnut hole,” the gap in Part D’s standard coverage that occurs after beneficiaries incur $2,250 in total drug spending.

What’s in the issue. Bowman’s study is one of many in the September/October Health Affairs that deal with issues relating to the use and coverage of biopharmaceuticals. http://content.healthaffairs/org/current.shtml In his introduction to the volume, titled “Biotech Drugs Come of Age,” Health Affairs founding editor John Iglehart says that these concerns “are taking on increasing importance as company pipelines surge and products are approved by the Food and Drug Administration.” The new Health Affairs issue was funded principally by Blue Shield of California Foundation, and Amgen and Genentech also lent support.

Other highlights include the following:

Medicare’s Reimbursement Policy. Dennis Cotter, president of the Medical Technology and Practice Patterns Institute Inc., and his coauthors examine the case of the anemia drug epoetin, manufactured by Amgen, as an example of how a reimbursement policy insufficiently tied to actual patient outcomes has led to the suboptimal use of a drug. Spending for epoetin therapy -- $1.75 billion in 2005 -- is Medicare’s single largest drug expenditure.

Liberalization of the Medicare coverage benefit for epoetin over the years has created a financial incentive for its use and has driven up the use of the drug; between 1991 and 2003, the average dose of epoetin increased by 300 percent, and in July 2001, 42 percent of dialysis patients with end-stage renal disease exceeded the FDA target range, write the authors.

Food and Drug Administration guidelines and Medicare reimbursement policy have been tied to the “surrogate marker” of increases in these red blood cells, or hematocrit levels, in patients. But Cotter and colleagues call into question the data used by Medicare to determine what hematocrit levels lead to actual improvements in morbidity and mortality for anemic patients.

Cotter and his coauthors offer several recommendations to improve the Medicare coverage and reimbursement process. Among them are the following:

-- Avoid overreliance on observational studies, often sponsored by industry, as opposed to rigorously controlled randomized clinical trials.

-- Carefully scrutinize clinical practice guidelines sponsored by manufacturers.

-- Require independently funded postmarketing research.

-- Require physicians and facilities to submit physiological evidence of patient improvement for reimbursement.

Coverage With Evidence Development. The approach of linking coverage of medical treatments to prospective data collection will require greater clarification of the evidentiary standards used by coverage decisionmakers, say Sean Tunis and Stephen Pearson. Their article details the pioneering work in this area done by the Centers for Medicare and Medicaid Services in developing Medicare’s “coverage with evidence development” (CED) policy. Tunis, who oversaw coverage policy at the CMS from 2000 to 2005, was intimately involved in this work.

“For CED to be justified, a given technology must fall between two clearly defined standards of evidence,” say Tunis, who now directs the Center for Medical Technology Policy, and Pearson, a senior scientist at the National Institutes of Health. The evidence supporting the technology must fall short of the standard for “unlimited coverage” but must exceed the threshold “below which a technology’s risks and benefits should be judged too uncertain for coverage at all.”

Tunis and Pearson also call for a priority-setting mechanism to determine which technologies must call for the application of the CED policy. “Medicare’s approach to date has been somewhat ad hoc, reflecting to a large degree the technologies that happen to be under review for national coverage,” they note. “However, given the expense and effort involved in conducting prospective studies through CED, it will be important” to select technologies “based on the quality of existing evidence, potential for reducing the burden of suffering for Medicare beneficiaries, and potential to produce savings for the program.”

Perhaps the most significant challenge for implementing CED will be “operational and financial,” Tunis and Pearson predict. “Doing this right is likely to require substantial and sustainable funding, and to attract such funding from public or private resources (or both), it will probably be necessary to establish some organization with the scientific credibility, political independence, and technical expertise to manage these projects successfully and efficiently.”

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research. Copies of the Sept/Oct 2006 issue will be provided free to interested members of the press. Address inquiries to Christopher Fleming at Health Affairs, 301-347-3944, or via e-mail, All articles are available online, a selection of which are available at no cost, at The public may order print editions of the Sept/Oct issue for $35 each from Health Affairs’ Customer Service at 301-347-3900 or online at



Health Affairs, published by Project HOPE, is the leading journal of health policy. The peer-reviewed journal appears bimonthly in print with additional online-only papers published weekly as Health Affairs Web Exclusives at


©2006 Project HOPE–The People-to-People Health Foundation, Inc.