Medicare Spends Billions on Oncology Drugs Offering Little Added Benefit

 

• The vast majority of Medicare's top-selling brand-name oncology drugs in 2022 provided high added therapeutic benefit.
• Ten drugs were classified as low or no added therapeutic benefit compared with alternatives, accounting for $6.7 billion in spending.
• These kinds of ratings could help inform Medicare drug price negotiations.

In an analysis of Medicare's top-selling brand-name oncology drugs, researchers found that while the vast majority provided high added therapeutic benefit, 10 were classified as providing low or no added benefit.

In 2022, Medicare pre-rebate spending for the 49 drugs -- which received quality ratings from German and French health technology assessment (HTA) reviews -- totaled $34.9 billion, or $32.7 billion after subtracting estimated rebates, reported Aaron S. Kesselheim, MD, JD, MPH, of Brigham and Women's Hospital and Harvard Medical School in Boston, and colleagues.

Of those 49 drugs, 39 were classified as having high added therapeutic benefit, and accounted for estimated post-rebate Medicare spending totaling $26 billion.

But "cancer drugs offering low or no added benefits accounted for $6.7 billion in post-rebate Medicare spending in 2022 and cost more per beneficiary than high-added-benefit drugs, suggesting opportunities for better aligning clinical benefits and prices of several top-selling cancer drugs," Kesselheim and colleagues wrote in JAMA Network Openopens in a new tab or window.

Nine drugs for breast, colorectal, lung, and other cancers -- aflibercept (Zaltrap), palbociclib (Ibrance), ixazomib (Ninlaro), cemiplimab (Libtayo), bosutinib (Bosulif), ribociclib (Kisqali), niraparib (Zejula), alectinib (Alecensa), and trifluridine/tipiracil (Lonsurf) -- were classified as low added benefit compared with alternatives, and accounted for estimated post-rebate spending of $6.4 billion.

And one drug -- zanubrutinib (Brukinsa), approved for chronic lymphocytic leukemia, follicular lymphoma, and other hematologic malignancies -- was classified as having no added benefit, and represented $275 million in post-rebate spending.

Median post-rebate spending per beneficiary was $61,227 for high-added-benefit drugs, $70,524 for low-added-benefit drugs, and $70,549 for the no-added-benefit drug.

Cancer drugs cost $74,000 more, on average, than non-cancer drugs, which can lead to patient financial toxicity, they noted. The Inflation Reduction Act of 2022 authorized Medicare to negotiate prices for top-selling drugs,opens in a new tab or window partly based on their therapeutic benefits compared with alternatives.

The researchers suggested that factors contributing to the widespread use of low-value medications include incentives for pharmacy benefit managers to steer patients to higher-cost drugs, prescribers' lack of awareness of drug costs, and direct-to-consumer advertising.

"International health technology assessment reviews may help identify drugs that do not offer clinical benefits over competitors and might be suitable for aggressive price negotiation," they wrote. "The U.S. should establish a national HTA agency to assess drug benefits and promote value-based pricing. Until then, ratings from experienced HTAs (e.g., France and Germany) can help inform Medicare price negotiations, including the identification of low-added-benefit drugs that could be candidates for price reductions owing to the availability of suitable alternatives."

Kesselheim and colleagues identified 50 top-selling brand-name oncology drugs in Medicare in 2022 according to combined pre-rebate spending in Medicare Part B and Part D using publicly available data. Of these drugs, 49 received at least one rating from either Germany's Federal Joint Committee or France's Transparency Committee.

Drugs receiving ratings of considerable, major, important, or moderate were categorized as high added benefit, while the other ratings were considered either low or no added benefit.

Of the included drugs, 60% were small molecules, 52% were primarily reimbursed by Medicare Part D, and 86% were approved for at least one rare cancer.

The top-selling oncology drug in Medicare in 2022 was pembrolizumab (Keytruda), which accounted for a total of $4.94 billion in Medicare spending, and had a high-added-therapeutic-benefit rating.

The authors acknowledged that their study had limitations, including the fact that drugs were classified according to their most favorable rating, which may have resulted in "undeserving" drugs being misclassified as having high added benefit. In addition, they pointed out that their analysis was limited to 2022 and that new evidence could mean a change in ratings.

Disclosures

The study was supported by grants from Arnold Ventures, the Commonwealth Fund, and the Kaiser Permanente Institute for Health Policy.

Kesselheim reported receiving personal fees from Alosa Health. Co-authors reported no disclosures.

Primary Source

JAMA Network Open

Source Reference: opens in a new tab or windowWang S, et al "Therapeutic benefit of top-selling oncology drugs in Medicare" JAMA Netw Open 2025; DOI: 10.1001/jamanetworkopen.2025.3323.

https://www.medpagetoday.com/hematologyoncology/othercancers/114981