New Hampshire Leads Independent Oncology Practice Decline

Tony Hagen @oncobiz
Published: Thursday, Jul 14, 2016
Murray Aitken

Murray Aitken

The statistics show you are much more likely to encounter an independent oncology practice in Alaska than in New Hampshire, according to the latest oncology drug market report from the IMS Institute for Healthcare Informatics.

Over 50% of practices in Wyoming and Alaska are independent compared with 15% or less of those in Wisconsin, New Hampshire, Utah, and Montana (Figure 1), according to the report, which based its findings on 2015 data. New Jersey, as congested as it is, surprisingly is up there with Alaska and Wyoming as being among the states with the highest proportion of independents. Florida lands in the center of the distribution—just above the 16% national independent median.

Integrated delivery networks (IDNs) continue to have a rising influence in oncology care. The report said the amount of medical groups owned as part of an IDN grew from 17% in 2010 to 30% in 2015. Corporate-owned practices held steady at 27% of the total, and independents declined to 43% from 56% six years ago.

Drug administration costs can still be significantly higher in hospitals than in physician outpatient clinics. Some of the starkest differences can be seen in administration costs for bevacizumab (approximately $2000 in a clinic vs just under $10,000 for a hospital setting), pertuzumab (just under $6000 vs over $12,000), and rituximab (just over $6000 vs over $12,000) (Figure 2), according to IMS. There were modest differences in administration costs between clinics and hospitals, but none of the 15 drugs measured by IMS was dispensed at the same cost in both clinic and hospital settings.

The global cost of cancer therapies shot up to $107 billion in 2015, an 11.5% rise from the $100-billion total in 2014, according to IMS. That total includes supportive drugs that are not directly considered oncology therapeutics.

More than 70 new cancer treatments have been launched in the past five years for treatment of 20 types of cancer tumor, and the oncology industry is struggling to keep up with the pace of change, said Murray Aitken, IMS executive director.

Figure 1: Distribution of Independents Varies Widely by State

“This is a surge of innovation that we’ve not seen in the past. We can see a tension in the system, as payers have to wrestle with these growing levels of cost. Oncologists have to wrestle with a growing armamentarium of treatments and decide the optimal course of care for a particular patient. Patients themselves now face more choices than in the past in terms of their treatments. Regulatory agencies have a lot to deal with, as new drug applications are coming through rapidly—not only for the original molecule but for subsequent indications. So, everyone in the health system is wrestling with this surge in innovation that’s bringing these remarkable new treatments to patients,” he said.

On the positive side, accelerated approvals have made it possible for new therapies to become available sooner in their development. On the downside, regulators are saddled with the dual task of reviewing the many new drug applications as well as applications for new indications, Aitken said. For example, since December of 2014, nivolumab has been approved for treatment of melanoma and squamous and non-squamous non–small cell lung cancer; most recently, it was approved for treatment of renal cell carcinoma, the report said. “The pipeline of oncology drugs in clinical development has expanded by more than 60% during the past decade, with almost 90% of the focus on targeted agents. The median time from patent filing to approval for oncology drugs in 2015 was 9.5 years, down from 10.3 years in 2013.” IMS attributed the FDA’s use of breakthrough therapy designation introduced in 2012 as one reason for this acceleration. “In the past three years, three molecules were approved within four years of patent registration.”

“Collectively, manufacturers are advancing nearly 600 new molecules through late-stage clinical development, most frequently for non—small cell lung cancer and breast, prostate, ovarian, and colorectal cancers,” the report said. It predicted that the global market will continue to grow in the range of 7.5% to 10.5% each year through 2020, reaching $150 billion. Much of that growth will be driven by immunotherapies. The report said payers will continue to look for concessions from manufacturers and adopt new payment models in order to derive greater value from their expenditures on these drugs.

Figure 2: Hospital and Clinic Drug Administration Costs

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