Oncology & Biotech News
April 2007
Volume 1
Issue 3

Politics & Policy: April 2007

This month's Fed Focus highlights such topics as Medicare reimbursement for cancer care and NCI budget cuts that affect cancer research.

%u25BA POLITICS & POLICY FED FOCUS Bill To Solve Reimbursement Problems Introduced to House of Representatives


ew legislation that addresses solutions to problems with Medicare reimbursement for cancer care has been introduced in the House of Representatives. The legislation—known as the Community Cancer Care Preservation Act of 2007 (HR 1190)—is

being cosponsored by Representatives Artur Davis (D-AL) and Jim Ramstad (R-MN).

Representatives Davis and Ramstad, who both sit on the House Ways and Means Committee, have heard first-hand from practices about the problems with Medicare reimbursement for community cancer care. These members have visited community cancer clinics in their districts, have met with the leadership of the Community Oncology Alliance (COA), and have been very involved in understanding the issues. Mr. Ramstad sponsored legislation addressing this issue in the prior session of Congress.

HR 1190 seeks to address the key problems with drug and services reimbursement, including:

• Elimination of “prompt payment” discounts

from the calculation of average

sales price (ASP) so that ASP is not artifcially

lowered by finance discounts between

manufacturers and wholesalers.

• Removal of the 6-month lag in ASP so

that community cancer clinics are not

unfairly subsidizing the Medicare system

for manufacturer price increases.

There were more than 100 price increases

in 2006.

• Creation of payment codes for essential

components of quality cancer care that

Medicare does not currently reimburse;

specifically, treatment planning and

pharmacy facilities.

• Restoration of appropriate payment for

the first hour and subsequent hours of

cancer drug administration.

The use of ASP to determine reimbursement is not without controversy, however. According to the National Association of Chain Drug Stores, using ASP to determine pharmaceutical reimbursement under Medicare Part B, rather than Average Wholesale

Price (AWP), will have a significant negative impact on pharmacies. This negative result will be further magnified and multiplied if other public and private prescription drug programs such as a Medicare outpatient drug benefit, Medicaid, private pharmacy benefit managers (PBMs), insurance companies, the Department of Defense’s Tricare program, and the Federal Employees Health Benefit Program (FEHBP), use ASP rather than their current reimbursement system.

The COA has worked with Representatives Davis and Ramstad and has expressed appreciation for their support for community

cancer care. More details on the bill are expected in the near future.

— John D. Zoidis, MD

NCI Budget Cuts Affecting Cancer Research


he recent congressional decision on the 2007 budget for the National Cancer Institute (NCI) keeps the budget essentially the same as last year, which means a flat funding for more than two years in a row that is leading to cuts in key cancer research across the country.

In February, Congress approved a continuing resolution that finalized the NCI’s budget at $4.79 billion. This is an increase of $46 million over the 2006 budget, which members of the cancer research community say is an insignificant increase. This is “essentially a cut because in a situation where you have a flat fund over a period of two to three years, inflation begins to take over and so effectively your spending power is less,” Deborah Kamin, senior director for cancer policy and clinical affairs at the American Society of Clinical Oncology (ASCO) told Oncology & Biotechnology News. “What the cancer research community has done in response is begin to pull back and tighten their belts to live within the budget constraint.”

The effective budget cut is adversely impacting research at Cancer Cooperative Groups, a network of institutions and practices across the country that conduct cancer clinical trials funded by the NCI. According to ASCO, 95 new trials, comprising 60% of all new trials that were planned for this year, will not be started or will face significant cutbacks. In addition, Kamin said that the cancer cooperative groups have also been told to reduce patient accrual to their existing trials.

Needless to say, the cancer research community is expressing concern, and ASCO is calling for at least a 7% increase in the NIH budget to keep pace with inflation. The society is also taking a lead in speaking with the cancer community and making legislators aware of the full impact of the NCI budget cuts on cancer research, Kamin said. “[We are] finding out which trials are not going to happen, how many, what’s the real impact, and share that information with congress so they understand the full impact of even flat lining the budget.”

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Senate Panel Weights Pros and Cons of Generic Biologics for Cancer


n mid-March, the US Senate weighed arguments concerning the pros and cons of generic biologic drugs for cancer and other diseases. Legislation that would give the FDA legal authority to approve alternative versions of biologic drugs after patents expire is being considered by the Senate Health, Education, Labor and Pensions Committee. The core issue is the cost savings with generics versus the documented safety of brand biologics. Also at issue is whether generic versions of biologics can undergo an abbreviated approval process without first conducting clinical trials.

More than 20 years ago, congress gave the FDA power to clear generic versions of conventional drugs, but did not address costly medicines derived from living cells, such as Amgen’s Epogen®/Aranesp® and Johnson & Johnson’s Procrit®—all proprietary formulations of epoetin alfa.

According to Jay Siegel, head of research for Johnson & Johnson’s biotechnology business, “You just can’t take a molecule that you don’t know what it is and market it to the people. It’s too risky.” Senators Hillary Clinton (D-NY) and Charles Schumer (D-NY)—sponsors of the bill—said their plan allows the FDA to decide how much testing is needed on a case-by-case basis. A similar measure has been introduced in the US House of Representatives by California Democrat Henry Waxman.

Employers and insurers consider clearing a path for generic biologics as a means of reducing escalating health care costs. According to Sid Banwart, vice president for human services at Caterpillar, Inc., “This is our single the trend is simply not sustainable.”

Supporters believe Congress should act soon on this issue. “This is an area that if we don’t address, everything else we do in healthcare is not going to be sufficient because we can’t keep up,” remarked Clinton.

Republicans advocate a more cautions approach. “Any time we start legislating on complex scientific issues and don’t know all the facts, we risk endangering lives,” explained Senator Mike Enzi (R-WY), the committee’s ranking member.

— John D. Zoidis, MD

Two New Bills for Quality Cancer Care


n February, two new bills were introduced in Congress with the goal of protecting quality cancer care. On February 15, Reps. Lois Capps (D-CA) and Tom Davis (R-VA) reintroduced the Comprehensive Cancer Care Improvement Act of 2007. The legislation aims to give physicians the resources they need to provide patients with quality cancer care. The bill would establish a new Medicare service for cancer planning from diagnosis through treatment to survivorship. It also includes provisions for the improvement of symptom management and palliative care. The proposed legislation is supported by the National Coalition for Cancer Survivorship, members of the patient advocacy community, and the American Society of Clinical Oncology.

Reps. Carolyn McCarthy (D-NY), Gene Green (D-TX) and Joseph Pitts (R-PA) introduced another cancer care-related bill on February 28. The Access to Medicare Imaging Act of 2007 would delay additional cuts for Medicare imaging over the next two years. It would require the Centers for Medicare and Medicaid Services to stop additional cuts that went into effect at the start of 2007. Moreover, the proposed legislation calls for the Government Accountability Office to evaluate the impact of the cuts on patient access to care and quality services. The bill has 38 co-sponsors in the House and is expected to be introduced in the Senate soon.

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CDC Panel Chair Says No to HPV Vaccine Mandate


on Abramson, the chair of the Centers for Disease Control and Prevention’s (CDC) advisory committee on immunization practices, said in late February that lawmakers should not make the human papillomavirus (HPV) vaccine mandatory. The CDC advisory committee had recommended that girls ages 11 and 12 receive the vaccine soon after the US Food and Drug Administration (FDA) approved Merck’s HPV vaccine Gardasil® for sale and marketing in July 2006.

Merck’s Gardasil and GlaxoSmithKline’s Cervarix™ were shown in clinical trials to be effective against two strains of the sexually transmitted HPV that together lead to about 70% of cervical cancer cases. More than 20 states and Washington, DC are considering making the vaccine a requirement for girls and women. The issue has raised protests from many opposing fronts: parents who say the vaccine requirement would interfere with control over their children, groups that oppose legislative vaccination requirements, and conservative religious groups that say it would encourage premarital sex. The cost of the vaccine—taken in a series of shots at $120 each—has also sparked criticism, although about 45% of children would be eligible for free vaccines under the federal Vaccinations for Children program, and a few states are considering offering the vaccine at no

cost to female minors.

Abramson said that he opposes requiring the vaccine because HPV is not a contagious disease and he is not sure that states can afford to inoculate all students. He also said that he and other panel members told Merck not to lobby lawmakers to require the vaccine for school attendance. “The vaccines out there now are for very communicable diseases,” Abramson said. “A child in school is not at an increased risk for HPV like he is measles.”

Merck, who had begun to lobby state legislatures last year, suspended its lobbying efforts early in February under pressure from parents, public health officials and patient advocacy groups.

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Making the Case for State Laws Requiring Colon Cancer Screening Coverage


tates with laws that require insurance coverage for colon cancer screening have significantly higher and faster rising screening rates, increasing potentially lifesaving screening, according to a report that was released in May 2006 by the American Cancer Society (ACS). Colon cancer, the second most common cause of cancer death in the US, also has one of the highest treatment success rates (90%) when detected early. In January, the ACS released a report saying that the colon cancer

death rate in the US dropped more than that of any other cancer in 2003—2004, owing to early detection.

Despite this link between early screening and detection and lower colon cancer deaths, only one state, Alaska, has passed legislation requiring colon cancer screening insurance coverage in the past year. This brings the total number of states with such legislation up to 21. Requiring screening coverage in the remaining 32 states is important not only because it could save lives, the legislation also has a financial benefit because it makes good use of limited health dollars, according to David Johnson, president of the American College of Gastroenterology (ACG). A recent report commissioned by the ACG stated that individual treatment cost for colon cancer is approximately $30,000 for a patient with early detection, while the cost can go up to $120,000 for a patient who has developed late-stage cancer, depending on the drugs used for treatment.

How do the States Stack Up?

A coalition of organizations, including the ACG, the American Gastroenterological Association, and the American Cancer Society Cancer Action Network, has released the 2007 Colorectal Cancer Legislation Report Card. The report card, issued annually, gives an overview of and ranks each state’s effort to require insurance coverage for colon cancer screening.

This year, 16 states earned a top grade of A with coverage laws that include reference to professional screening guidelines. Three states, Delaware, Texas, and West Virginia, received a B; these states require screening coverage but do not reference the guidelines. California and Wyoming got a C grade because their legislation is vague and does not specify the types of screening that are covered. The remaining 32 states, which include Florida, Massachusetts and Pennsylvania, have scored Ds and Fs because they have not yet passed legislation requiring screening coverage or have not even considered the measure.

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Texas Governor Perry Under Fire


he parents of three Texas girls have filed a lawsuit against Texas Governor Rick Perry (R) even as he faces implications of recent press reports linking his decision to mandate the human papillomavirus (HPV) vaccine with Merck’s campaign contribution.

Texas was the first state to make HPV vaccination mandatory early in February when Perry signed an executive order that requires all girls entering sixth grade to be vaccinated beginning September 2008. The order allows parents to opt out of the requirements if they choose. Under the order, Merck’s Gardasil vaccine will be available at no cost for girls and women ages nine to 21 who are eligible for public assistance.

The lawsuit, which was filed on February 23 in a Travis County, TX court, claims that Perry breached his authority and illegally issued the executive order. It also seeks to suspend the use of state funds for buying the vaccine until the matter is resolved.

At the same time, Perry is fending offimplications that there might be a link between Merck’s contribution to his political campaign and his signing the executive order. According to an Associated Press (AP) story, Perry’s chief of staffand aides discussed Gardasil the same day that Merck’s political action committee donated $5,000 to the governor’s campaign. Documents also show that Perry aides met with Merck lobbyists beginning mid-August last year.

Perry’s office denies any link between Merck’s contributions and the governor’s signing the executive order, saying that the events are coincidental. “When a company comes to me and says we have a cure for cancer, for me not to say, ‘Please come into my office and let’s hear your story for the people of the state of Texas, for young ladies who are dying of cancer,’ would be the height of irresponsibility,” Perry said while touring cancer centers around the state a day after the AP story came out.

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