Cancer treatment waste costs insurers $3B each year, study says

Cancer drug waste costs the Medicare program and private insurers billions of dollars each year, according to a new study from The BMJ.

The study--which analyzed spending on cancer drugs that are packaged in single dose vials and dosed based on body size in the United States--focused on how much revenue drug companies earn from leftover treatments. Since the entire drug vial has to be paid for regardless of whether or not it is used, wasted drugs are a source of unnecessary spending. 

Public insurance programs have a federally set drug markup of 6 percent, and is currently sitting at 4 percent for the actual markup. In the commercial insurance sector, payers have reported that they pay markups to doctors and hospitals in the order of 22 percent and 142 percent, respectively. This results in the Medicare program and private insurers wasting an estimated $3 billion on unused cancer medications every year, the study says.

The study authors call for an end to "contradictory regulatory standards in the U.S. that allow drug manufacturers to boost profits by producing single-dose vials containing quantities that increase leftover drugs." There are some instances where the leftover medication can be used for another patient, but this practice is few and far between, the study says.

The study recommends that policymakers explore approaches that would reduce or eliminate insurers having to pay for leftover drugs. Federal agency guidelines do address how to eliminate waste, but they are contradictory and very open-ended for interpretation, the authors aruge. The FDA calls on companies to create doses to a size that minimizes leftover drugs but provides enough so that more than one vial is rarely needed for a single dose. The Centers for Medicare & Medicaid Services essentially encourages this practice, while the Centers for Disease Control and Prevention states that it is unsafe.

Additionally, the study says that drug manufactures should package the doses in more versatile sizes, since it would allow for better matching with required doses.

To learn more:
- here is the study