Data released by hospitals about their prices have yielded clues about how consumers might someday look to manage their medical costs. But so far, teasing out useful information has been an exercise that frustrates even savvy researchers.
Take the experience of pharmaceutical analyst Aharon (Ronny) Gal, PhD, who, working through his Moto Bioadvisors business, examined hospital price-posting on behalf of the Community Oncology Alliance (COA). Moto’s report was submitted by COA to the Centers for Medicare Medicaid Services (CMS) as part of a comment favoring tougher penalties for hospitals that fail to meet federal transparency standards, as reported by Medscape Medical News.
In a report submitted by COA to CMS about the 2022 Medicare hospital outpatient rule, Gal and colleagues went further than simply assessing whether hospitals were compliant with the new transparency rule. They honed in on a question that many cancer patients likely will have regarding treatment ― are they being prescribed a cheaper version of a cancer drug when there is one is available?
Specifically, the researchers focused on biosimilar products, which are potentially less expensive versions of the original innovator biological product.
In their report, they estimate that between 25% and 56% of the hospitals they studied listed prices for only the innovator products.
Essentially none of the hospitals that were studied carried all the biosimilars.
“Thus, overall, it appears hospitals are slow to adopt biosimilars. However, it is not a uniform observation,” Gal and colleagues write in the report.
This estimate on biosimilar use is part of a research project Moto Bioadvisors conducted for COA. That project started with a look at the websites of 1087 hospitals that participate in a federal drug discount program, known as the 340B Program.
The 340B Program began in 1992 as a workaround to allow drugmakers to offer discounts to certain hospitals while new Medicaid rebate rules took effect. It has swollen over the years, partly because the Affordable Care Act of 2010 added more participants.
Sales handled by the 340B Program rose 18%, to $80.1 billion in 2020 from about $67 billion in the previous year, according to the consultant IQVIA, which includes the business formerly known as IMS Health.
Hospitals are not required to pass this discount directly to most patients, leading to questions about how the savings are used. (Medicare in recent years cut the payment for drugs purchased by 22.5%, seeking to cut bills for patients and taxpayers.)
COA has long been among the most vocal critics of the management of the 340B Program. It argues that the smaller independent cancer practices the COA represents are put at a competitive disadvantage by the 340B Program, in which they cannot participate.
Another issue: the vast majority of hospitals participating in the 340B Program do not follow recent hospital transparency regulations that require them to report the prices they charge for oncology treatments and the rates they negotiate with private insurers, according to the Moto analysis.
In looking at 1087 hospitals in the 340B Program, Moto Bioadvisors found that only 233 (21%) posted enough information to examine drug prices charged to customers.
But there were challenges within this group, Moto Bioadvisors writes in the report. Some hospitals didn’t include individual negotiated payer data required by the new transparency law but rather included other amounts, such as chargemaster prices.
In the end, that left a pool of only 123 hospitals (11%) for which Moto Bioadvisors could attempt to analyze price data.
Even within this pool, the analysts found inconsistent coding, with some products listed under different lines for their branded and generic names. Hospitals also used their own conventions for handling missing data.
Sometimes the drug amount associated with the negotiated price was unclear (eg, 1 mg or one vial containing 6 mg). The analysts also removed unreasonable data points, such as charges of a penny, and addressed “duplicates,” such as different dosages of the same drug.
“As our objective was to create a standardized price dataset across all hospitals, we spent substantial time developing methodology to standardize the data,” the researchers note.
The resulting database used by Gal and colleagues contained 52,180 data points across the 123 hospitals. As difficult as this research project about drug costs was, it may be tougher to try to compare other aspects of medical care, Gal and colleagues say.
“We note our task was simplified by drugs being a rather uniform product with relatively clear nomenclature and standard doses,” they write. “We suspect others attempting to develop similar databases for more complex hospital services are facing a much more challenging task.”
Medscape requested Gal and colleagues at Moto Bioadvisors to see if they could find information on the use of biosimilars in the financial information posted by the 11 elite cancer hospitals that are PPS-exempt.
It proved a challenge, Gal told Medscape. Seven of the 11 hospitals provided online chargemaster files and not information on actual negotiated rates. For the remaining four hospitals, assessing the availability of biosimilars involved converting the data offered into a new format, and in two cases it involved writing code to try to assess the information available. Only in one case, Fox Chase Cancer Center, were the data available and the rates paid to different insurers were broken down, meaning that perhaps someone adept in billing codes could search for this information.
“It is essentially impossible for a layperson to understand pricing, and even professionals require hours to extract the data from each hospital’s [website],” Gal told Medscape.
“Impossible to Navigate”
Picking up on the approach used by Moto, Medscape asked Jim Jusko, the founder and chief executive officer of the health information firm FireLight Health, to examine the online postings from MD Anderson and see what information was available on several cancer-drug biosimilars.
Oncology drugs in general are almost never included in the lists of common shoppable procedures or in hospitals’ online cost estimator tools, Jusko said. Searching for this information involves downloading and carefully searching a hospital’s standard charges file, which often lists 10,000 to 15,000 items.
FireLight’s analysis showed that at MD Anderson, when the widely used cancer drug trastuzumab was administered in an outpatient setting, its cash price was $10,473. But a biosimilar for that drug was also available for $8484.
The analysis also found that some of these medicines were more expensive when administered in an inpatient setting, whereas others were priced higher in an outpatient setting. Among the drug prices examined, the biosimilars were consistently less expensive. None of them appear to be offered in the inpatient setting.
Jusko said his experience underscores the difficulties a consumer would face in trying to sort through the posted data to seek less costly cancer medicines.
“Without good information on prices and alternatives, it would be impossible to navigate this, or even to ask the right questions,.” Jusko said.
“Across all of medicine, price transparency has begun to reveal a whole range of troubling questions,” he added. “And unless we ask each and every one of them, we can’t begin to move toward a functional marketplace for healthcare services.”
“Individualized Nature of Cancer Treatment”
In a statement to Medscape, the University of Texas MD Anderson Cancer Center said it carries and administers biosimilar treatments as needed.
“It’s important to note that MD Anderson’s physicians make treatment decisions based on their expertise and what’s best for the patient, which includes conducting pricing comparisons,” MD Anderson said in a statement. “Additionally, payor reimbursement policies must be taken into consideration.”
Another major oncology center, City of Hope, told Medscape that it supports the use of biosimilars and has policies in place in which it suggests prescribing biosimilars when possible. City of Hope has biosimilars for rituximab, bevacizumab, and transtuzumab in its formulary and treatment plans.
“As new biosimilars enter the market, we continue to evaluate and add them to our formulary so that we can deliver treatments as effectively as possible. It should be noted that the biosimilar portfolio within cancer care is limited and biosimilars are not available for every cancer treatment,” City of Hope spokesperson Zen Vuong told Medscape in an email.
But personal attention may trump posting of prices in terms of aiding patients, Vuong told Medscape. City of Hope has financial counselors who can check on what will be covered by patients’ insurance plans.
“Due to the complexities and individualized nature of cancer treatment, and the significant variance in patient insurance reimbursement for treatment, we do not post information about pharmaceuticals within our online pricing tools as cost varies according to numerous indications that are specific to each patient and case,” Vuong wrote.
Kerry Dooley Young is a freelance journalist based in Washington, DC. She is the core topic leader on patient safety issues for the Association of Health Care Journalists. Young earlier covered health policy and the federal budget for Congressional Quarterly/CQ Roll Call and the pharmaceutical industry and the Food and Drug Administration for Bloomberg. Follow her on Twitter at @kdooleyyoung.