Balancing Cost and Margin for Sustainable Cancer Care


While prioritizing either cost or margin may be necessary at a site of care, big picture items, such as societal responsibility and long-term health care affordability, should guide financial analyses, said Scott Soefje, PharmD.

In a presentation titled “The Great Financial Debate: Cost vs Margin for Cancer Care Drugs” at the Hematology/Oncology Pharmacy Association Annual Conference 2024 in Tampa, Florida, Scott Soefje, PharmD, posed a question: When it comes to cost savings or profit margins, which should be the primary financial driver at a site of care? The answer, Soefje said, is both.

“I know there are institutions out there that just focus on margin and all their job is to do is to maximize margin,” said Soefje in an interview with Drug Topics. “If you’re doing that, then you’re always using the most expensive drug, because it’s always going to pay you the most. There are other institutions out there that are only focused on cost. And those institutions will be struggling financially to stay open. So again, [we should] take a balanced approach to look at where we can lower cost and still make a revenue—still make a margin.”

Although taking a balanced approach is ideal, Soefje admits there are situations where either cost or margin might take precedence. Pharmacies struggling financially may prioritize margin to break even. On the contrary, pharmacies might prioritize lowering patient costs as much as possible, even if it means sacrificing profit. When considering which factor to prioritize, Soefje recommends considering the societal perspective.

“If we don’t take ownership of driving down the cost of care, then the cost of care will never come down,” said Soefje. “And then ultimately, someone’s going to force us to do so. I think in those situations, where you can use the lower cost of the drug, you should, because it’s going to help the overall societal perspective.”

When conducting a financial analysis for cancer drugs, Soefje’s message is clear: Striking a balance between cost savings and profit margins is crucial to provide sustainable cancer care. While prioritizing one factor may be necessary in specific situations, big picture items, such as societal responsibility and long-term health care affordability, should guide decision-making.

Read more of our coverage from the HOPA 2024 Annual Conference here.

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