Oncology Value Watchdog: What the Oncology Care Model Means for Pharma Marketers

Posted by Christina Corridon on Aug 15, 2016 9:50:43 AM

Marketers in the pharmaceutical industry are no different than those in other industries: They want to understand their customer on multiple dimensions, with accuracy and ideally through low investment. However, oftentimes pharmaceutical marketers’ data sources are limited or fuzzy, and the customer can represent many diverse stakeholders. The entry of the Centers for Medicare and Medicaid Services’ new Oncology Care Model—a payment and delivery model that aims to provide higher-quality, better coordinated oncology care at the same or lower cost to Medicare—provides a clear source of providers participating in the model. Last month, the CMS’ Center for Medicare and Medicaid Innovation (CMMI) released the list of oncology practices and payers selected to participate in the Oncology Care Model. This list is publically available and contains clues as to the makeup and personality of a pharmaceutical customer. In total, 196 practices were selected and will participate in the program over the next few years—more than double what many expected and significantly more than CMMI had previously indicated that they would select. The practices that were selected have been publically enthusiastic and energized to be part of what they see as a transformative program for the delivery of cancer care in a cost-effective manner. Oftentimes, payment reform initiatives and pilots aiming to alter the way that reimbursement for care in the U.S. is delivered are met with opposition and backlash from providers. 


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Which Side Is Right About CMS’ Proposed Part B Drug Reimbursement Model?

Posted by Bill Coyle on Jul 6, 2016 3:46:12 PM

Reactions to the Centers for Medicare and Medicaid Services’ (CMS) proposed Part B drug reimbursement demonstration project have been both swift and predictable. Under the proposal, reimbursement for drugs covered under Part B would be reduced from average sale price (ASP) +6% (pre-sequester) to ASP +2.5% plus a flat fee of $16.80. CMS would also pursue various value-based purchasing tools as part of the pilot. The objective is “to encourage better care, smarter spending, and healthier people by paying providers for what works.”

Not surprisingly, physician groups and the medical societies to which they belong quickly decried the proposal as being potentially dangerous for patients, saying that it would put certain physicians and patients (in the demonstration ZIP codes) at unfair disadvantages to those in the current system.


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Oncology Value Watchdog: What the Medicare Part B Reimbursement Model Means for Patients

Posted by Christina Corridon on Apr 25, 2016 11:41:32 AM


On March 8, 2016, the Centers for Medicare and Medicaid Services (CMS) proposed to test a new Medicare Part B reimbursement model in a “lottery” of sorts, with the goal of delivering more value-driven care. The current incentives for prescribing a Part B drug allow the provider to make a margin of 6% of the average selling price (ASP) of the therapy. For an oncology drug that is infused weekly and costs $10,000 per month, that means $600 of margin per month for the provider. And the more expensive the drug, the higher the margin amount. (Not surprisingly, cancer drugs made up 42.1% of all Medicare Part B spend in 2014, according to CMS.) Under the new model being piloted by CMS, practices that “win” the lottery will now be reimbursed at ASP plus 2.5% and a flat rate payment of $16.80 per treatment, according to the Department of Health and Human Services. So that same $10,000 drug will now only yield $317.20 to the provider—about half of the $600 that they make today. After sequestration, that amount is reduced even further to $152.12.


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