A look into drug wastage: A savings opportunity for payers

By Kameron Kelly, PharmD, Director Strategic Planning, Mosaic

The US is expected to spend over $295b on oncology drugs in 2025.¹ Cancer drug wastage (DW) due to vial size availability results in billions of dollars of excess healthcare spending in the US, with related Medicare costs reaching $3.6b from 2017-2021.² Drug waste in 2021 was $779m, mainly due to oncology therapies, with some individual therapies surpassing $100m.² Many oncology medications are manufactured in limited vial sizes, but often patients may not need the full amount in each vial, especially when a drug is dosed based on body surface area (BSA) or weight.³ Higher doses of these medications typically come with higher out-of-pocket costs for patients. With this continued increase in drug spend, healthcare organizations are looking at alternative ways to tighten drug management, which can ultimately impact patient access. Dose rounding is a practice often employed by health systems and payers to help mitigate DW and the resulting excess costs.

In 2017, the Hematology/Oncology Pharmacy Association (HOPA) issued a recommendation supporting the consideration of pharmacokinetic characteristics and product formulations when evaluating BSA and weight-based doses.³ HOPA suggests that monoclonal antibodies and other pharmaceutical agents can be rounded to the nearest vial size within 10% of the prescribed dose as dose changes ≤10% of the prescribed dose are not expected to reduce safety or efficacy.³ In many cases, this rounding down of dosing results in potential cost savings. The National Comprehensive Cancer Network (NCCN) endorsed HOPA’s position statement, solidifying a strong stance against DW and presenting further rationale for this practice.

In recent years, clinical institutions have leveraged these recommendations given the increased costs of oncology, immunology and rare disease medicines. Many health systems have implemented protocols related to dose rounding to limit waste for certain recommended medications.

Dose rounding practices within health systems

What does asking prescribers to change dosing habits look like? Mayo Clinic developed a system-wide dose-rounding initiative for biologic and chemotherapy agents.⁴ In this program, dose rounding was allowed to the nearest vial size if rounding resulted in the dose being within 10% of the originally calculated dose.⁴ For the first six months of 2019, the dose-rounding program saved 9,814 drug vials and achieved a savings of over $7.2m, with an estimated three-year savings of ~$40m.⁴

Similarly, many payers have implemented DW programs that recommend up to a 10% lower dose from the dose prescribed, if clinically appropriate, to decrease the number of vials dispensed. Considerations for appropriate drugs in scope include high cost/trend medications, drugs with multiple vial sizes and drugs with dosing ranges (e.g., dosing based on BSA, weight, specific labs, etc.). Payers must also consider lines of business requirements, such as Medicare, since CMS has certain requirements with National and Local Coverage Determination Guidelines.

Product X DW example⁵

Background: 

• Vial size = 100mg vial
• 1 mg = 1 billable unit 

Assumptions: 

• Patient diagnosis: breast cancer
• Patient BSA: 2.0m²
• Weight: 85kg
• Height: 170 cm
• Dose requested: 260 mg/m² every 21 days

Saving summary per intervention:

• Waste avoidance: 1 vial = 100 units
• ASP + 6% = $14.29
• Savings per dose: $1,429
• Annualized savings: 3 years

Payers can implement either a voluntary or mandatory DW program that, at the time of authorization, drives the recommendation or obligation to optimize the vial size. Each payer can gauge the appropriate strategy based on their provider network relationships as each strategy can produce varying results.

Operational payer process for a mandatory DW program⁵

^{Operational flow of a payer-implemented mandatory drug wastage program}

• Medical necessity criteria: Policies are drafted to reflect the mandatory requirement for drug wastage (DW) adherence. 
• Provider notification: Policies are informed that DW has been transitioned to a mandatory program with corresponding policy restrictions (90 days prior to go-live).
• Intake: DW is reviewed for eligibility; if the provider declines DW at time or request entry, request will pend for clinical review.
• Clinical review: Clinical pharmacists discuss DW with provider and assess if clinical exception is appropriate for the patient.
• Physician-level review: When requested, specialty-matched physicians participate in peer-to-peer (P2P) discussions if insufficient clinical rationale is provided to support DW exclusion.
• Denials: For reconsiderations and appeals, clinical review team assesses new information to determine if an exception or exclusion to DW exists. Appropriate requests will then be sent for additional clinical review.

Operational payer process for a voluntary DW program

• Medical necessity criteria: Policies are drafted to reflect the voluntary recommendation for DW adherence.
• Provider notification: Providers are informed that there is a voluntary DW program that would recommend dose adjustments.
• Intake: DW is reviewed for eligibility and outreach to provider.
• Clinical review: Clinical pharmacists discuss DW with provider around recommended dose rounding and assess if appropriate for the patient.
• Decision: Provider would either accept dose recommendation or provide exception reasoning as to why they don’t believe the dose should be rounded. This being the last piece of the prior authorization, the request would be accepted (given that it met all other medical necessity requirements by payer) and concluded.

In June 2018, Horizon BCBSNJ, a regional health plan that serves ~2.3m members, implemented a voluntary program for commercial and Medicare populations with 28 drugs in scope with a 30% recommendation success rate and $0.28 per member per month (PMPM) program savings. In May of 2022, Horizon implemented a mandatory DW program for their commercial population with 49 drugs in scope. The program had an overall recommendation success rate of 85% and resulted in more than $7.88m in program savings. The top reasons recommendations were not accepted by prescribers included concern for suboptimal outcome and lack of provider response within required turnaround times.

A program that drives drug wastage success