Out-of-pocket costs for cancer drugs can vary dramatically depending on whether the medications are administered through pill form or intravenous infusion.

Newer oral drugs, which can be taken at home and often have fewer side effects than older drugs, can cost patients thousands of dollars a month, while receiving chemotherapy through an IV in an infusion center typically amounts to a standard co-payment for an office visit.

A bill sitting on the governor's desk would change the price inequity by prohibiting health insurers from charging patients more for oral anticancer drugs than for chemotherapy delivered through an IV.

"IV drugs are covered under medical benefits with a co-pay while oral chemotherapy is covered under prescriptions so there's a different formula," explained the bill's author, Assemblyman Henry Perea, D-Fresno. "Because of that, the out-of-pocket costs for cancer patients (for oral drugs) are a lot higher."

The bill does not specify how insurers should change how they charge for the drugs, but it does include a provision that prevents them from complying with the law by increasing the costs of intravenous chemotherapy rather than reducing the cost of oral drugs.

A patient's experience

Caethe Goetz, of Rohnert Park, learned about the disparity in costs in 2006 when she was placed on a new oral drug three years after she was first diagnosed with multiple myeloma, a cancer that starts in the plasma cells in bone marrow.

Goetz's insurer required her to pay 20 percent of the cost of the drug, which was $7,000 a month. She said she had to max out her credit cards and move in with her 83-year-old mother to pay for her therapy.

She has since qualified for coverage through the Veterans Administration and both forms of chemotherapy are covered equally through federal programs. But she wants other patients to have equal access to their best treatment options, whether that comes in the form of a pill or an IV drug.

Goetz has often had to change drugs. "The big problem is when you eliminate the oral drugs, there's much less to work with," said Goetz, 58. "Not all drugs will work for all patients. I survived as long as I have by just switching drugs."

But some health insurers have argued the bill could lead to higher health costs.

Patrick Johnston, chief executive officer of the California Association of Health Plans, said the Legislature should focus on the prices set by the drugmakers rather than force insurers to treat the oral and IV cancer drugs the same way. He said patients often have alternatives to the more expensive options.

Public workers exempt

Johnston also criticized the bill for exempting the California Public Employees' Retirement System, which administers health plans on behalf of the state and many local governments. CalPERS provides health benefits to more than 1.3 million public employees, retirees and their families.

Perea chose to exclude the California agency to avoid the scrutiny of costs to the state, but said that a third-party analysis of the bill determined it would cost insurers one penny per member per month.

Dr. Joseph Tuscano, an oncologist from the UC Davis Cancer Center who specializes in blood cancers, said patients don't always have a choice of whether to take an oral or IV drug.

"There are some that are only in the oral form," he said, adding that the newer oral drugs are often more effective with fewer side effects. "Clearly those have shown to improve survival and keep patients alive longer. Unfortunately they are very expensive."

The bill passed the state Senate on Aug. 20 on a 29-9-2 vote and made it through the Assembly two days later on 51-12 vote.

Gov. Jerry Brown has until the end of this month to sign or veto legislation. If signed into law, the legislation would take effect in 2013.

Twenty states already have similar legislation on the books.
