Oncology Unscripted With John Marshall: Episode 10: Is the Inflation Reduction Act a Threat or Opportunity for Oncology?

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Is the Inflation Reduction Act a Threat or Opportunity for Oncology?  

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[00:00:05] John Marshall, MD: Hey everybody, John Marshall live from Washington DC where all the action is happening. A lot of moving vans are likely to be coming here soon as the new party comes in to take over maybe everything. We're going to have to see how that goes. We're all living in this crazy state of uncertainty about just how much. Are they saying is going to happen? But we'll see. That's our future. 

[00:00:34] But what I really want to talk about on this episode of Oncology Unscripted is the beginnings of a discussion around health policy in oncology and the reason I'm bringing this up is I just recently came across my radar, something called the Inflation Reduction Act. Well, sure, I knew about the Inflation Reduction Act, but I didn't know how that was going to affect cancer. And then I started to think about, yeah, I do. They're going to negotiate drug pricing on cancer. And there's been this big turmoil about we can't do that. It'll break the system. We need the fixed drug pricing, et cetera, and I want to talk about that because it's starting to be put into place, and it might actually get wiped off the map in a couple of months, but maybe it won't. And I wanted to talk about it because it will affect what I do for a living, and that's to try and develop new drugs for cancer.

[00:01:29] But in order to do that, let's start by at the beginning of when the whole thing needed to be created in the first place. And that is go back to 2003 Bush II, Bush II to put into place a health modernization Medicare Modernization Act, which at the time was praised. Now, remember where we were people with Medicare didn't really have drug benefits. You went and paid cash at the pharmacy. But drugs were getting more and more expensive. And so, seniors weren't able to afford the drugs. And so, we needed to figure out how US health care was going to cover those drugs. And this was the deal that was cut now out of that deal. So, seniors got access to drugs. But for the tradeoff that always happens here in Washington, D.C. Now, the first one was that there was an agreement that we would not import new drugs from other countries. So, in other words, you couldn't manufacture it in Canada and then ship it across the border at Canadian prices. We weren't going to allow that. So, the borders were closed to import so that we could save the price structure here in the United States. And with that rule came another corollary is that we could not negotiate drug pricing with the manufacturer. Whatever they said was going to cost, that's what CMS would pay. And as a result, that was when we could no longer judge value as a nation. So, if you can't connect magnitude of benefit, which is what the FDA judges, did it work or not, to the cost, that's what CMS has to do, you can't judge value. Right? There's no way. Okay, it'll cost $100,000. Okay, but what do I get for that? Well, it could only be 6 weeks. And that would be enough for it to get FDA approval. And Medicare would have to pay. the third component was something called 340B pricing, and that is institutions like mine and many of the institutions around the United States pay a reduced amount for the product, get paid by insurance companies, the delta, and with that extra money that we get as a healthcare institution, we're supposed to provide All those other things that cancer care delivers. A nutritionist, a social worker, nursing support, et cetera, that don't have any billing infrastructure for it.

[00:04:08] And so that non negotiated price, the rising cost of cancer drugs, and this 340 B pricing is our current economy. And with that, all of our industries more or less dependent on that pricing structure. So, the inflation reduction act is a threat to that, right? Because if we're going to start picking and choosing drugs that can be negotiated on price, then how does that affect the revenue stream?

[00:04:37] And how does that affect the reimbursement into research? And so, our whole series on the next few episodes is going to be focused on the Inflation Reduction Act and what it does now, and what it could do in the future. And why we're worried about it. We hope to get some good folks who are in the middle of this discussion to talk to us about it. It's a fairly sensitive subject. So, we are hoping for that. So, stay tuned to future episodes.