Are patients and insurers paying billions for cancer drugs that literally end up in the trash?
It looks like it, according to a new analysis showing that drug waste runs up a tab of about $1.8 billion a year, and is paid for by Medicare, private insurers, and patients.
In addition, another $1 billion is spent as price markups to physicians and hospitals on those discarded medications.
That's $2.8 billion altogether, and the waste comes about because many top-selling cancer drugs in the United States are only available in single-dose vials, and the vial only comes in one size.
The authors of the analysis, led by Peter Bach, MD, director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center in New York, call for an end to the "contradictory regulatory standards in the US that permit drug manufacturers to boost their profits by producing single-dose vials that increase the quantities of leftover drugs."
The study was published online March 1 in BMJ.
Much has been written about the high cost of drugs, especially in cancer care, and the need to reduce spending without jeopardizing patients.
But cancer drug waste is a topic that has garnered little attention, Dr Bach explained.
Because many top cancer drugs only come in one vial size and these drugs are generally dosed based on body size, this results in leftover drug — which can be substantial in some cases.
These facts beg the question, are pharmaceutical companies deliberately creating waste to generate more revenue?
"The companies have full control over what vial sizes they produce and if they only want to market in one vial that's too big for any patient in the country, that's their call," Dr Bach told Medscape Medical News.
One example is bortezomib (Velcade, Millennium), which is used to treat multiple myeloma. It is only available in the US in a 3.5-mg vial that is much larger than the average required dose, which Dr Bach and his colleagues calculated to be 2.5 mg. That is based on the drug's dose of 1.3 mg/m 2 and the average weight of a cancer patient.
"That drug accounts for maybe a third of the company's revenue," he said. "So they are aware of this issue and it is impossible not to be aware of the effect on revenue."
Another example is pembrolizumab (Keytruda, Merck), which was previously sold in 50-mg vials (as a powder that needs to be reconstituted into a liquid). But in February 2015 the manufacturer introduced a larger, 100-mg vial (as a liquid), and the 50-mg vial became unavailable.
"Merck withdrew the 50 mg vial and replaced it with a 100 mg vial," Dr Bach said. "The increase in revenue from this switch is substantial and we estimate it will add about $1 billion in revenue over the next 5 years."
They arrived at this estimate using an example of a 70-kg patient who requires a dose of 140 mg (the drug is dosed at 2 mg/kg). Three 50-mg vials would be required, leaving only 10 mg unused.
But when limited to 100-mg vials, 60 mg would be wasted.
According to the Medicare Not Otherwise Classified October 2015 file, which lists Medicare's reimbursement rates for these drugs, a milligram of pembrolizumab runs about $50. Using this scenario, the change in vial size increases the company's revenue from leftover drug by six-fold, from $500 to $3000, for a single dose.
However, Dr Bach pointed out that pembrolizumab was approved in Europe last summer and it is being sold in the smaller, 50-mg vials.
Ditto for bortezomib, which is sold in 1-mg vials in the United Kingdom.
"One would have to assume that this is due to closer scrutiny of pricing in Europe," Dr Bach said.
In contrast, it is quite possible to market a drug with negligible waste. One case in point is bendamustine (Treanda, Cephalon), which is sold in a variety of vial sizes (25 mg, 45 mg, 100 mg, and 180 mg) that can be combined to reach its dose of 100 mg/m2 almost precisely. The authors calculate that only 1% of bendamustine is wasted.
$3 Billion in Overspending
To arrive at their estimate of nearly $3 billion dollars in overspending on wasted drugs, the authors examined the top 20 cancer drugs that are dosed by body size and packaged in single-dose vials (based on 2016 projected sales). These agents account for about 93% of all sales of such drugs.
They calculated the total amount of waste and resulting revenues for each drug. Dr Bach and his coauthors estimated how often vial sharing occurred by using Medicare claim information, and then calculated the most efficient way to combine available vial sizes to achieve the lowest-approved dose in a representative sample of the US population.
The estimated total revenue in the US from the 20 drugs was $18 billion, with 10% or $1.8 billion from discarded drugs. The extent and cost of leftover drug varied according to market size and available vial sizes.
If every person received the highest dose approved by the US Food and Drug Administration (FDA), they estimated, then revenues from wasted drugs drops to $1.4 billion.
But if every cancer patients weighed 10% less than the survey participants, the estimate rises to $2 billion.
CMS Says Vials Can Be Used Repeatedly, but…
Commenting on the study, Scott Soefje, PharmD, MBA, president of the Hematology/Oncology Pharmacy Association, agreed that this is an issue.
"I'm not going to say it's not, but I was surprised at the dollar amount that this paper actually suggested," he said. "I think $3 billion seems like a lot, but it may well be, I don't know.
Dr Soefje pointed out that single vials "have been an issue."
"The [Centers for Disease Control and Prevention (CDC)] and [Centers for Medicare and Medicare Services (CMS)] published standards several years ago, that a single vial was for a single patient," he told Medscape Medical News.
Due to the recent episodes of drug shortages, CMS has backed off on that. "CMS now says that a single vial can be used multiple times as allowed under the US Pharmacopeia standards or the USP 797," Dr Soefje explained. "But the CDC still stands by the original statement."
The USP 797 standard allows a single-dose vial to be used to prepare doses for more than one patient under specific controlled conditions. "The opened vial has to be kept under an IV hood for no longer than 6 hours, and then it must be discarded because sterility can no longer be guaranteed," he said.
This can be problematic in itself, as it is difficult for the pharmacy to monitor the use of single-vial drugs when used for multiple patients. "A lot of it depends on how the system is set up and if it is sophisticated enough to monitor drug use and make sure that this protocol is carried out," Dr Soefje said.
Another issue is how to bill for the drug. "If you bill for the whole vial then you can't use it on another patient," he pointed out. "But CMS will allow you to bill for waste.
In this scenario, if 30 mg of a 100-mg vial is used, then billing for the amount used would come under one code, and the 70 mg wasted would be entered under a second code.
"The federal government pays for it, and some private insurers do as well," Dr Soefje said. "It is a problem in the pharmacy community because some companies do not pay for the waste."
And that is why the arguments in this study make so much sense, he contended. "Making smaller vials for single use will minimize waste and minimize what we have to worry about."
Dr Soefje added that they believe that "pharmacists are the best qualified to minimize the waste and maximize the use of the drug. So we are saying that it is important to have pharmacists handling these drugs, as they know the regulatory standards on how to manage the drugs and minimize waste."
Bona E. Benjamin, BS Pharm, Director, Medication-Use Quality Improvement at the American Society of Health-System Pharmacists (ASHP), also weighed in on the issue.
"ASHP does not solicit or collect cost information, so we cannot verify the cost figures in the article," Dr Benjamin said. "However, we agree that waste occurs, some of which can be prevented with careful management."
Regardless of business reasons for choosing vial sizes, manufacturers are subject to FDA requirements for sizes and volumes in single-dose vials, she explained. "The FDA's guidance specifically addresses right-sizing single-dose vials and gives manufacturers the latitude for choosing size within dosing parameters, and is clear to practitioners."
"The BMJ study uses a theoretical weight for dosing real patients without factoring in diagnosis," Dr Benjamin noted. "In reality, dosing weight varies broadly, as do dosing regimens due to use of cancer drugs for off-label indications."
While they do not have any figures on how much waste actually occurs, she explained that their members do frequently comment on the need for specific dosing sizes beyond what is commercially available. "In addition, repackaging of commercially available drugs in smaller doses is common," she said.
There are ways to help optimize the use of these expensive drugs, such as standardized ordering protocols, modified compounding procedures that extend stability, and "block scheduling" of patients using the same drug on the same day. "Rounding off doses is also used to conserve drugs when clinically appropriate and has been demonstrated to significantly reduce cost," Dr Benjamin said.
Dose rounding is not appropriate for all drugs, she emphasized, "but in those where a minor dose variance is clinically insignificant, studies have demonstrated considerable cost savings and conservation of expensive drug resources, without affecting patient outcome."
Stopping the Waste
The authors proposed several policy options to overcome this waste and reduce costs.
While dose sharing can help, the practice is not very common. "It is safe and doable," Dr Bach said, "But can really only be done in places where it can be scheduled and when the patient isn't hugely inconvenienced because of the company's inappropriate packaging."
"But I don't believe the solution here is to inconvenience patients with cancer, and to try to schedule them so that a dose can be shared," he said.
Instead, real and long-lasting solutions are needed. For starters, current regulatory standards are inconsistent, and could be considered contradictory or at least ambiguous, the authors note.
Several policy options also should be explored. "Regulators could require manufacturers to provide drugs in a reasonable set of size options to ensure the amount of wasted drug is low, say 3%," the authors note.
An alternative to that would allow manufacturers the freedom of selecting vial sizes but also require them to refund the cost of leftover drugs. This option could be achieved through certified disposal and a virtual return.
Policy makers also should revisit the current FDA guidance on appropriate packaging for intravenous drugs in single-dose vials and encourage the "FDA, CDC, Centers for Medicare and Medicaid Services, and US Pharmacopeial Convention to reconcile their views on vial contents and vial sharing."
These steps could in turn lead to healthcare savings without sacrificing outcomes, they point out.
"There may be disputes on how much you should earn over the drugs that will help people, but I can't imagine anyone embracing the idea that you should be making money for drugs that are discarded," Dr Bach added.
Prompted by this report, two Democratic senators, Amy Klobuchar of Minnesota and Jeanne Shaheen of New Hampshire, have called upon the FDA to address this issue. In a letter to FDA Commissioner Robert M. Califf, both senators are urging the agency to examine this practice and find a more efficient way to distribute these drugs.
"When examining a drug for approval the FDA should explore additional tools to manage the dosage amount contained in a vial or other packaging," the senators note in their letter.
This study was funded by internal Memorial Sloan Kettering Cancer Center funds and by Memorial Sloan Kettering Cancer Center Support Grant/Core Grant P30 CA 008748.
Dr Bach reports personal fees from Association of Community Cancer Centers, America's Health Insurance Plans, AIM Specialty Health, American College of Chest Physicians, American Society of Clinical Oncology, Barclays, Defined Health, Express Scripts, Genentech, Goldman Sachs, McKinsey and Company, MPM Capital, National Comprehensive Cancer Network, Novartis, Biotechnology Industry Organization, American Journal of Managed Care, Boston Consulting Group, and Foundation Medicine. Coauthors Leonard B Saltz reports grants from Taiho Pharmaceutical; Raymond J Muller reports personal fees from Amgen, Hospira, Seattle Genetics, Sunesis, Amneal Biosciences, and Magellan Medication Management System, and is an uncompensated member of the national clinical advisory committee for the Institute of Safe Medication Practices.
BMJ. 2016. Published March 1, 2016. Full text
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Cite this: Leftover Cancer Drugs in Vials Cost $3 Billion Annually - Medscape - Mar 18, 2016.