Community Oncology Alliance Statement on White House Budget Proposal Drug Price Recommendations

Administration's Budget has Numerous Smart, Overdue Policy Solutions; but Certain Medicare Part B Proposals Ignore History and will Backfire

Washington, DC, Feb. 13, 2018 (GLOBE NEWSWIRE) -- Today, the Community Oncology Alliance (COA) released the following statement regarding the White House’s proposed budget recommendations and a recent report from President Trump’s Council of Economic Advisors on strategies to reform biopharmaceutical pricing.

Ensuring patients can afford and access life-saving therapies to fight cancer is a top concern for oncologists, nurses, practice administrators, and other cancer care professionals. Every day we are faced with the grim reality that the prices for critical cancer drugs in the United States are too high and unsustainable. COA believes that all stakeholders in our health care system must come together to reduce the cost of cancer care.

COA commends President Trump and his Administration for moving forward with several bold reforms to tackle drug prices. Notably, this includes the recent Centers for Medicare & Medicaid (CMS) change to hospital payments in the 340B Drug Discount Program. The White House budget proposal recommendations for continuing 340B reforms are absolutely correct and will help ensure that cancer patients in need benefit, not large hospitals. Along with efforts underway in Congress through legislation, such as the 340B PAUSE and 340B HELP acts, COA is hopeful that we will finally be able to achieve transparency and accountability in the runaway 340B program in hospitals.

The White House budget proposal for sharing manufacturer rebates and discounts with seniors in Medicare Part D is also a great idea. Pharmacy benefit managers (PBMs) have been enriching themselves with these rebates for too long, and their growing scale has resulted in higher drug costs for everyone. COA believes that the proposed Part D change to share rebates and discounts proposed will lower costs for patients, taxpayers, and the government.

Additionally, COA believes that President Trump’s proposal to expand Medicare’s policy on site-neutral payments is an extremely wise move. While saving Medicare $33.9 billion over the next decade, paying hospitals and independent physician practices the same rate would also lower patient costs for cancer care and reduce incentives for hospitals to take over independent practices. 

However, COA cautions the White House that several elements of the budget could, if enacted, have extremely negative unintended consequences for patients and the cancer care system. In particular, the proposals to cut payments for Medicare Part B drugs, as well as shifting the Part B program into the Part D program are misguided. History shows that these changes will backfire, raising drug prices, driving consolidation of our nation’s cancer care system into the much more expensive hospital setting, expanding the negative influence of PBMs, and reducing patient access.

Proposal to Cut Medicare Part B Reimbursement

COA completely disagrees with the White House proposal to cut provider reimbursement for new drugs in Medicare Part B. For community oncology practices this would put reimbursement for many drugs below acquisition cost, jeopardizing the ability of oncologists to deliver the therapies and causing the practices to close their doors.

It should be noted that CMS under previous administrations has already substantially cut Medicare Part B drug reimbursement by requiring the inclusion of wholesaler prompt pay discounts starting in 2005 and the application of the Medicare sequester to Part B drugs starting in 2013. These past cuts did not reduce drug prices, but rather fueled them and drove a huge shift of cancer care to the more expensive hospital setting, increasing costs to patients with cancer and taxpayers.

In 2004, 84 percent of chemotherapy was delivered in independent community oncology practices, but by 2016 that had fallen to 51 percent, with the remainder delivered in the far more expensive hospital outpatient setting. This significantly increased costs to Medicare—in 2014, it cost Medicare $2 billion more for just chemotherapy than had the site-of-service not shifted to the hospital setting. Now, the White House has proposed cutting Part B reimbursement even more with the expressed purpose of lowering costs and drug prices, despite clear evidence that it will increase Medicare costs and further raise drug prices.

Finally, it is insulting to suggest that oncologists paid under Medicare Part B practice medicine based on financial profit incentives, not the best interests of their patients. This is not only highly offensive and derogatory, but also simply not grounded in fact. Numerous independent studies have shown that the ‘incentive’ of reimbursement rates does not change oncologists’ prescribing patterns. Rather, it is the introduction of new, groundbreaking drugs and clinical evidence that dictates which treatment is in the best interest of the patient.

Proposal to Move Medicare Part B to Part D

COA is also extremely concerned by the White House proposal to move some prescription drugs currently paid for under Medicare Part B to Medicare Part D. This is an extremely risky proposal for patients battling cancer who already have extremely negative and dangerous experiences dealing with the influence of the large PBMs that dominate the Part D program. Today, PBMs control an estimated 80-85 percent of drug benefits for over 260 million Americans who are forced to deal with these expensive, bureaucratic corporate middlemen.

Patients battling cancer have experienced a very clear, negative shift in their ability to access needed medications in the Medicare Part D program because of PBMs. COA encourages the administration to read our series of white papers documenting the horror stories that patients face in dealing with PBMs, including a complete indifference to sick patients, dangerous mistakes, and deadly bureaucracies. Additionally, policymakers should note that the growth of middlemen PBM corporations in Medicare Part D has only served to increase drug prices.


COA applauds the administration for continuing to work on reducing drug prices. As providers on the frontlines of our nation’s fight against cancer, we see firsthand the impact that high drug prices have on patient care, access to treatment, and the entire health system. We also commend the administration for taking real steps towards reform of the broken 340B program and look forward to more action from Congress in the future.

However, the search for solutions to high drug prices should be done thoughtfully and with consideration of the lessons learned from history. Oncologists have seen several of these proposals before and they have had extremely negative unintended consequences for patients with cancer. COA urges the administration to use extreme caution and reconsider some of the proposals put forth as they will backfire, raising costs and reducing access.

Community oncology providers and COA stand ready to work with policymakers on reforms that will have a meaningful impact on reducing the cost of drugs and cancer care. We are fully committed to reducing the cost of cancer care and have been working on oncology payment reform for a number of years. Currently, COA is helping practices participating in the Oncology Care Model (OCM) succeed while planning for a future iteration of the effort we are calling the ‘OCM 2.0’ which incorporates concepts such as value-based insurance design and value-based payments for cancer therapies. These hold great promise and should be explored seriously.


A photo accompanying this announcement is available at


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