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What do Keytruda and Opdivo mean to you?

A physician may interpret these words as cutting edge treatment options for their patients. A nurse may see them as a new type of chemotherapy that will require special training. An administrator may see them as a budget variance on the monthly pharmacy report. The names of these new drugs will evoke a different response based on your role at your cancer program. And whether your program is private practice or hospital-based, adding drugs to your formulary raises a number of issues.

Earlier this month, Merck's Keytruda received U.S. approval for treating advanced melanoma. Bristol-Myers' drug Opdivo received Japanese approval in July, although it hasn't yet been approved in the U.S. Both are immunotherapy drugs that release one specific brake on the immune system, acting on a protein called Programmed Death Receptor 1 (PD-1) or a related target called PD-L1.(1)

If your cancer program is hospital-based, a Pharmacy and Therapeutics (P&T) Committee is most likely in place that must review and approve all new additions to the formulary. A time lag may occur before a newly approved drug may be ordered, however, depending on the frequency of the P&T Committee meetings. Some hospitals have a special process for cancer drugs, but a process always exists that dictates when and how new drugs are added. If you work for a private practice you'll see an internal process for ordering the new drug, but typically it's not as time consuming as a hospital-based program's protocol.

Medical oncologists want to prescribe drugs that will have the greatest benefit for their patients, and patients want the best treatment option that will help them beat their disease and be a long-term cancer survivor. Now patients are using the internet to learn as much about their type of cancer and oftentimes arrive at their appointment with a stack of paper from searches they've done about their disease, including the latest advances and clinical trial results. The information age has empowered them to be proactive about their disease, and they've learned to ask their doctor questions about different treatment options. Sometimes the information is so new that the physician has not read the latest edition of the relevant medical journal to know about the clinical trial.

Training for a new drug is typically coordinated in partnership with the drug company representative, but it may also need to be coordinated by the pharmacy department if the cancer program is hospital-based. Chemotherapy nurses will need training on how to infuse the new drug. They'll need to know details about the length of time for the infusion and what types of side effects are possible. They'll also need to know what to do in the event a patient has a side effect from the drug, either during administration or after he has left the cancer center.

On February 22, 2013, the FDA approved Roche's drug, Kadcyla. Upon this approval, the company's Genetech unit announced that Kadcyla would be available to patients in about two weeks. This drug will be priced at $9,800 a month.(2) In any treatment setting, a cancer administrator wants to support physicians and the patients by offering the best treatment options, but typically the newest drugs are also the most expensive. It's impossible for administrators to be able to predict when new drugs will be approved by the FDA and how much the pharmaceutical company will charge for the new therapy. The variance for the pharmacy budget can quickly hit six figures, depending on the number of patients that the practice treats with the specific type of cancer. Whether hospital-based or private practice, the cancer program experiences a time lag between purchasing the drugs and being paid by the patient's insurance for the treatment.

Also to consider is the billing process for new drugs, which can vary depending on whether you're billing Medicare, Medicaid or private insurance. When was the J-code issued for the drug? Does the patient's insurance company have a special process for approving patients being treated with the new drug? Some companies require that patients be treated with the most common drug regimen for their cancer and not show any response before being prescribe the new drug. The price for chemotherapy drugs that have been on the market for many years or for which there are generic equivalents will be much lower than a new drug, and some insurance plans mandate the less expensive treatment option first. These are just a few of the issues that cancer programs must navigate in order to get paid when using chemotherapy drugs that were recently approved by the FDA.

Cancer programs need consistent policies and procedures and good operating practices in order to be efficient and effective in taking care of their patients. Whether your program is hospital-based or private practice, you have a fiduciary responsibility to make sure that you're providing the best care possible for your patients and getting paid the appropriate amount in the shortest time frame to maximize your cash flow.

The Oncology Group has an outstanding team of consultants well-versed in every aspect of cancer programs. We can review your operations and assess whether you may benefit from improvements or changes to your current procedures and practices. To learn more about The Oncology Group, please contact Steve Black, Vice President, at 512.583.8815 or by email at info@theoncologygroup.com.

For more information on the new chemotherapy drug Opdivo, click here.