UnitedHealth targets cancer-drug payments

UnitedHealth is ramping up a reimbursement test that could have long-term effects on sales of the most expensive cancer drugs. The insurer will test a payment system that reimburses oncologists for the wholesale price of cancer drugs, plus a set fee that won't vary drug by drug. It's a change from the usual practice of allowing cancer docs to mark up cancer therapies for profit.

As Reuters reports, oncologists make about 60 percent of their money from selling drugs. Their profit margins can be higher on pricier drugs, which could lead doctors to favor more expensive meds rather than cheaper, older drugs and generics, even if they're not more effective.

UnitedHealth has a vested interest in cheaper drugs, of course. So it wants to see what happens if there's no incentive to use more expensive treatments. "We kind of draw a line in the sand and say this is the fee now for taking care of the patient and it doesn't change depending on what drugs you select in the future," SVP Lee Newcomer tells Reuters. The payment method will be tested in five states.

It'll take time to discover whether prescribing patterns really change, but UnitedHealth plans to review its initial results early next year.

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