Perea bill seeks parity on cancer drug costs

Assemblymember Henry T. Perea’s bill requires health plans to cover oral chemotherapy medications with a simple co-pay.Assemblymember Henry T. Perea’s bill requires health plans to cover oral chemotherapy medications with a simple co-pay.Cancer patients who resist spending long hours undergoing intravenous chemotherapy treatments at infusion centers may be forking over as much as $10,000 each month in California for chemo in pill form.

Intravenous chemotherapy at an infusion center is treated like an office visit, and the patient is responsible only for the co-pay. But oral chemotherapy drugs fall under the designation of a prescription, which under most health plans limits patients to a discount. For a drug like Xeloda, which is used in the treatment of breast and colorectal cancers, the cost for a one-month prescription is $4,000. Considering that many cancer patients are on more than one type of medication, even discounted prescriptions could eventually land them in the poorhouse.

Assemblymember Henry T. Perea introduced a bill earlier this year that would require health care plans and insurers to cover oral medication for cancer treatment at a cost that mirrors that of IV treatments. Assembly Bill 1000, The Access to Cancer Treatment Act, now sits on Gov. Jerry Brown’s desk after being passed by wide margins in both the state Senate and Assembly last month.

“Oral chemotherapy is very expensive; in some cases, as high as $10,000 a month,” said Perea, a Fresno Democrat. “It puts the appropriate treatment out of reach for many cancer patients.”

Perea said that AB 1000 is more than just another bill to him; it has been a cause for the last two years. His late mother, Maria, was diagnosed with lung cancer a few years ago and underwent chemotherapy sessions at an infusion center. A typical session would last 8 hours, and sometimes two sessions a week was necessary. Many of the other patients at the infusion center told Perea they could take an oral form of chemotherapy, and in some cases their doctors actually preferred for them to do so because they believed it to be a better form of treatment.

“The problem was, they couldn’t afford it,” Perea said.

Sharon Loewen of Sunnyside was diagnosed in October 2007 with stage 4 lung cancer. She was undergoing chemotherapy treatments, lost two-thirds of one lung, had to use oxygen and often needed a wheelchair to get around.

Her doctors had informed her there was nothing more they could do, and she was getting her affairs in order to prepare for what appeared to be the inevitable consequences of her illness.

“A year ago last July, I was getting my things in order and getting ready to die,” Loewen said.

Then her doctor told her about a new drug called Xalcori, and she began taking the medication in mid-September of last year. Within two weeks of taking her first dose of Xalcori, she began feeling better.

Loewen’s husband, Ed, works for Fowler Unified School District, and his health plan covers her medication with a monthly co-pay of $50. Without the insurance coverage, the cost would have been $10,000 out-of-pocket each month. There is no IV equivalent for Xalcori.

“When they came out with this medicine, it was a real miracle to me,” said Loewen, 54, who worked for the IRS for 22 years. “I’ve been on it about a year now.

Loewen suffered a broken ankle in a fall during the last year, but other than that, she has resumed normal activities.

“I hope other people are able to take advantage of this,” she said. “Without the insurance, there would be no way.”

Not all health plans cover pricey medications, however. Although the bill would make these drugs affordable to cancer patients, some health insurers are warning that it could lead to higher overall costs for everyone.

“Basically, if you switch to the co-pay, the treatment still has to be paid for,” said Nicole Evans, vice president of communications at the California Association of Health Plans. “This ultimately would result in higher premiums.”

Evans pointed out that the state is exempt from the bill. The California Public Employees Retirement System, which manages pension and health benefits for more than 1.6 million California public employees, retirees and their families, is excused from the requirements of AB 1000:

“This section shall not apply to a health care benefit plan or contract entered into with the Board of Administration of the Public Employees’ Retirement System pursuant to the Public Employees’ Medical and Hospital Care Act.”

Evans said the state is looking out for its own costs, not those of the private sector.

“There is no equity there,” she said. “We’re concerned about that.”

The California Chamber of Commerce agrees with Evans’ rationale for opposing the bill, declaring that AB 1000 increases premiums for private employers while exempting the government by limiting co-payments for one type of pharmaceutical – oral anti-cancer medications.

Perea said the reason the bill - which would take effect in July 2013 - exempts CalPERS is because the cost would go to the state, which is already up to its neck in red ink. Cost shifting – charging private payers more in response to shortfalls in public payments – is a touchy subject.

“It’s the only way to pay for it,” Perea said. “We could shelve the idea or move forward with a chance to have it pass.”

What chance there is that the governor would sign the bill remains to be seen. Brown’s predecessor, Arnold Schwarzenegger, vetoed two similar bills. Perea said than analysis of the current bill shows those with private insurance would see their premiums rise one penny per member per month – 12 cents a year.

“I think the numbers are on our side,” Perea said. “The language is similar to those in other states."

Other states – 20 to be exact – have passed similar laws. But Perea is facing strong opposition from the California Association of Health Plans and several others.

“The opposition and I have been battling for two years,” he said. “We have a bill modeled after other successful bills, with no cost increase.”