The Death of Common Sense

When Five-Figure Cancer Drugs Deliver Three-Week Benefits, Fiduciaries Must Intervene

Executive Brief

Cancer drugs now command five-figure monthly price tags—even when they deliver little or no clinical benefit.

Fiduciaries can’t afford to look the other way. With billions spent on therapies that fail to extend life meaningfully, plan sponsors must reclaim control. That means rejecting rebate-driven formularies, demanding evidence-based decisions, and ensuring the right drug reaches the right participant at the right price.

This isn’t just a clinical problem. It’s a fiduciary failure in the making.

The Explosion In Cost—Without Evidence

Pramod John, the CEO of VIVIO Health summed it up well:

“Cancer Treatment Costs: Where Common Sense Goes to Die.” — Pramod John, CEO VIVIO Health

Cancer drug prices have skyrocketed. But survival benefits haven’t.

Exploding Prices: Median launch price for new cancer drugs is now $27,891/month—up from $10,954 in 2000
Limited Benefit: Over half of new cancer drugs approved since 2000 show no survival improvement
Big Names, Small Gains: Pfizer’s Ibrance costs $214,000/year with zero proven mortality advantage
Short-Term Hope: Patients often gain just 3 months of life—if that
Big Spend, Low Return: Plans pay billions for drugs that may do more harm than good

Why This Is A Fiduciary Issue

Employers and plan fiduciaries are footing the bill for drugs that fail the most basic test: do they work?

Legal Duty: ERISA and the CAA require fiduciaries to ensure every plan dollar is spent prudently
Wasteful Spending: Covering costly oncology drugs with little or no benefit breaches fiduciary responsibility
Evidence First: Fiduciaries must insist on coverage decisions based on clinical value—not rebate influence

The Right Drug, Right Participant, Right Price

Here’s how to meet your fiduciary duty—and protect both your participants and your plan:

1. Intervene in Formulary Design

Require transparency in oncology drug review criteria
Demand evidence of clinical benefit—not just FDA approval

2. Reject Rebate-Fueled Bias

Require Lowest Net Cost (LNC) as the basis for inclusion
Prohibit formulary incentives for high-cost, low-value drugs

3. Require Oversight of PBM P&T Committees

Demand quarterly review of oncology drug placements
Retain the right to veto or amend formulary decisions

P&T Committee Talking Points

Use these points when reviewing cancer drug decisions with your PBM:

The Solution Isn’t Just Clinical—It’s Contractual

If you want better outcomes, you need better contracts:

Enforce Cost Controls: Lock in Lowest Net Cost rules for all oncology drugs
Expose All Revenue: Require full rebate and incentive disclosure—including cancer drug placement deals
Retain Override Rights: Carve out the ability to reject P&T recommendations for low-value, high-cost drugs
Demand Veto Power: Mandate formulary transparency and include veto rights in your PBM agreement

Fiduciary Takeaways

Audit Oncology Spend: Use episodic claims audits to flag cost outliers
Ask for Net Benefit Reports: Insist on real-world survival and quality of life data
Negotiate Evidence Gates: Require proof of clinical value before adding to formulary
Enable Lower-Cost Substitution: Prefer drugs with proven outcomes at lower cost
Preserve Your Veto Rights: Reject high-cost, low-value drugs—even if approved

Bottom Line

Too many cancer drugs cost too much and deliver too little.

As a fiduciary, your job isn’t to underwrite pharma profits—it’s to protect patients and plan assets. That means questioning the hype, examining the data, and insisting on value. If it doesn’t pass your own prudence test, it shouldn’t pass your plan’s.

“We should demand treatments that work—not just treatments that cost a lot.” —Pramod John

The solution isn’t radical. It’s just… common sense.

Next Move: The PBM Field Guide Is Coming

The tools to operationalize PBM reform are on the way.

This summer, Nautilus is launching the PBM Field Guide at RosettaFest 2025 in Denver—a practical roadmap to apply the best of state reform, align with fiduciary principles, and take back control of your pharmacy benefits.

The guide is structured around the Six Pillars of Fiduciary-Aligned PBMs:

Clinical stewardship
Full financial transparency
Unconflicted procurement
Data ownership & protection
Local access & provider fairness
Attestation & oversight

Advisers and employers will be able to:

Make confident, compliant decisions in the best interest of plan participants
Use open-source RFP language, contract terms, and transparent pricing standards
Avoid hidden fees, audit obstacles, and rebate distortions
Build oversight systems that keep vendors honest—and participants protected

Join the Brightest Minds, Leaders, and Change Makers.

Tired of the dark? Join us at RosettaFest 2025—and help build the future of pharmacy benefits. You’ll never look at PBMs the same way again.

💸 SPECIAL OFFER: Newsletter subscribers receive 10% off any Validation Institute service. Use code FIDUCIARY10 at checkout.

📬 PAY IT FORWARD: Feel free to forward this offer to your broker, PBM, or other vendors. Don’t hesitate to tell them you will favor validated vendors as part of your modernized procurement processes. Strong compliance and better benefits begin with validation.

Don’t be a bystander. Change the status quo and reap the benefits of The Health Plan Compliance Advantage.

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