Value and payment for oncology in the United States

Rather than focus on reducing prices for innovative biopharmaceuticals, insurers in the United States are changing methods of payment for oncologists in order to moderate the growth in cancer drug expenditures. The desire is for a better pattern of utilization and expenditures without adversely affecting incentives for research and development. After an overview of the contemporary discussions of price and value, this paper describes three initiatives to influence the selection and management of oncology drugs. This includes initiatives to reduce the profit margins earned by oncologists as part of the purchasing of office-infused biopharmaceuticals; "episode-of-care" payments that bundle into a single fee the reimbursement for care management and specialty drugs; and payment methods that case rates for physician care management activities with cost-based reimbursement for the oncology drugs.