President Obama FY 2014 Budget Proposal: Draconian Cut to Medicare Coverage of Cancer Drugs - Statement by ASCO President Sandra M. Swain, MD, FACP

April 10, 2013

Mary Rappaport

This afternoon, President Obama released his proposed budget for fiscal year 2014. Among several cost-cutting measures designed to preserve Medicare solvency is a proposal to reduce reimbursement for life-sustaining cancer drugs. Currently, reimbursement to physicians for “Part B” drugs is based on the average sales price plus a 6 percent payment for services needed to administer chemotherapy in physicians’ offices, where most cancer patients receive their care. The President has proposed to reduce the 6 percent service payment to 3 percent. (The budget proposal appears to apply cuts primarily to physicians, but also mentions rebates that will be required by manufacturers.)

For the National Institutes of Health, the President has requested $31.3 billion, an increase of $471 million, or 1.5 percent, over the FY 2012 level. The President also proposes an increase to the Food and Drug Administration budget of $821 million, representing a 21 percent increase over fiscal year 2012. 

ASCO is deeply concerned about the proposed cut for drug reimbursements. If Congress were to enact the President’s proposed cut to the Part B drug formula, such a draconian measure could significantly impact patients’ access to cancer treatment at a particularly difficult and precarious time in their lives.

This cut would come on top of the 2 percent sequester cut instituted on April 1 of this year. The sequester cut alone has already led to troubling signs that practices are being forced to shift patients to hospitals and other settings for their chemotherapy – resulting in more fragmented, possibly more expensive care for the 60 percent of oncology patients who are covered under Medicare.

This emerging crisis underscores that Medicare’s system of reimbursement of cancer care is deeply flawed. Our country needs payment approaches that maintain patient access and focus on supporting high-quality, cost-efficient, and patient-centered care.

ASCO is completing an in-depth review of the President’s proposed budget and its provisions.  Stay tuned to for additional updates.

About ASCO
The American Society of Clinical Oncology (ASCO) is the world’s leading professional organization representing physicians who care for people with cancer. With more than 30,000 members, ASCO is committed to improving cancer care through scientific meetings, educational programs and peer-reviewed journals. ASCO is supported by its affiliate organization, the Conquer Cancer Foundation, which funds ground-breaking research and programs that make a tangible difference in the lives of people with cancer. For ASCO information and resources, visit Patient-oriented cancer information is available at