The Value of Specialty Oncology Drugs HEALTH SERVICES RESEARCH Goldman, D. P., Jena, A. B., Lakdawalla, D. N., Malin, J. L., Malkin, J. D., Sun, E. 2010; 45 (1): 115-132

Abstract

To estimate patients' elasticity of demand, willingness to pay, and consumer surplus for five high-cost specialty medications treating metastatic disease or hematologic malignancies.Claims data from 71 private health plans from 1997 to 2005.This is a revealed preference analysis of the demand for specialty drugs among cancer patients. We exploit differences in plan generosity to examine how utilization of specialty oncology drugs varies with patient out-of-pocket costs.We extracted key variables from administrative health insurance claims records.A 25 percent reduction in out-of-pocket costs leads to a 5 percent increase in the probability that a patient initiates specialty cancer drug therapy. Among patients who initiate, a 25 percent reduction in out-of-pocket costs reduces the number of treatments (claims) by 1-3 percent, depending on the drug. On average, the value of these drugs to patients who use them is about four times the total cost paid by the patient and his or her insurer, although this ratio may be lower for oral specialty therapies.The decision to initiate therapy with specialty oncology drugs is responsive to price, but not highly so. Among patients who initiate therapy, the amount of treatment is equally responsive. The drugs we examine are highly valued by patients in excess of their total costs, although oral agents warrant further scrutiny as copayments increase.

View details for DOI 10.1111/j.1475-6773.2009.01059.x

View details for Web of Science ID 000273456400008

View details for PubMedID 19878344