Pharmacy Benefit Spending on Oral Chemotherapy Drugs

BACKGROUND: Pharmacy benefits have historically excluded injectable drugs, resulting in coverage of injectable drugs under the medical benefit. High-cost biologics and other new drug therapies are often injectables and therefore have not presented cost threats to pharmacy benefits. The U.S. Food and Drug Administration approval of capecitabine, an oral form of fluorouracil, in 1998, and imatinib mesylate in oral dose form for chronic myeloid leukemia, in 2001, signaled a new period in budget forecasting for pharmacy benefits, particularly for small, self-insured employers for whom a drug with a cost of 25,000 dollars per year of therapy for 1 patient could increase total pharmacy benefit costs by 10% or more. OBJECTIVE: To quantify the actual relative costs of the oral chemotherapy drugs in pharmacy benefits in 2006 and identify the history of spending on oral chemotherapy drugs relative to total pharmacy benefit spending for small, self-insured employers over the 4.5 years through May 2006. METHODS: Administrative pharmacy claims from the database of a pharmacy benefits manager (PBM) for approximately 500,000 members of small, self-insured employer plans were used to calculate the net plan cost of oral chemotherapy drugs relative to total drug benefit costs for the period January 1, 2002, through May 31, 2006. Current costs for oral chemotherapy drugs for small employers were compared with an insured health plan of approximately the same number of members for dates of service January 1, 2006, through May 31, 2006. RESULTS: This descriptive analysis found that oral chemotherapy drugs represented 0.27% of total drug benefit costs, or approximately 0.08 dollars per member per month (PMPM) for small, self-insured employers in 2002, rising linearly to 0.73%, or approximately 0.24 dollars PMPM in the first 5 months of 2006. Members in pharmacy benefit plans sponsored by small employers paid an average 6.9% cost share for oral chemotherapy drugs in 2006, nearly identical to the average 8.5% paid by members of an insured health plan of similar size in total membership, versus 26.9% average cost share for all drugs. Imatinib mesylate accounted for 45% of total spending on oral chemotherapy agents in 2002 versus 40% in 2006. CONCLUSION: Spending on oral chemotherapy drugs as a proportion of total pharmacy benefit costs has more than doubled, from about 0.3% in 2002 to 0.7% in 2006. For small, self-insured employers, this represents a nearly 3-fold increase in spending, from about 0.08 dollars PMPM in 2002 to about 0.24 dollars PMPM in 2006.