The Reading Blog

Nick Mulcahy’s Medscape Medical News piece “Time to Consider Cost in Evaluating Cancer Drugs in United States?” (7/14/2009) offers an interesting discussion on the increasing high cost of new cancer medicines. Most government, academic, and industry experts interviewed in this piece felt that this “spiraling” cost  “is not sustainable.” Mulcahy explains that,

Oncology drugs are now the best-selling class of drug, having surpassed lipid regulators. Last year, oncologic drugs had annual sales in the United States of $19.2 billion, according to figures from IMS Health (Plymouth Meeting, Pennsylvania). Sales have increased more than 4-fold in the past 10 years, from less than $5 billion in 1998 to the current level. Newer anticancer agents are particularly expensive. Most of the cancer agents (> 90%) approved by the Food and Drug Administration (FDA) in the past 4 years cost more than $20,000 for a 12-week course of therapy, writes Tito Fojo, MD, the lead author of a new essay about the cost of cancer drugs published online June 29 in the Journal of the National Cancer Institute. Such big price tags have produced sticker shock among clinicians and at least 1 industry executive. [...]

“There is a shocking disparity between value and price, and it’s not sustainable,” said Roy Vagelos, MD, at the 2008 annual meeting of the International Society for Medical Publication Professionals, according to cnbc.com. Dr. Vagelos is a former chief executive at Merck and the current chair of 2 biotech companies, Regeneron and Theravance. [...]

In the essay, Dr. Fojo, who eventually enlisted bioethicist Christine Grady, PhD, from the National Institutes of Health, in Bethesda, Maryland, as a coauthor, reviews the “marginal benefits” that a number of high-priced agents produce in terms of survival. He highlights cetuximab for NSCLC, which costs $80,000 for an 18-week course but provides only the above-mentioned 1.2 months of additional survival.

Dr. Fojo cites multiple examples of cancer drugs with high costs and marginal benefits, including bevacizumab (Avastin, Genentech) for metastatic breast cancer (provides progression-free survival improvement but no increase in overall survival; estimated total cost of therapy, $90,816). Nevertheless, a health economist who agrees that these cancer drug prices are not sustainable says, “There is too much blame on pharmaceuticals for rising healthcare costs in general.” Attention should also be paid to the overall cost of cancer care, suggested Shelby Reed, PhD, from Duke Clinical Research Institute, in Durham, North Carolina. [...]

In their essay, Drs. Fojo and Grady make a number of proposals for cancer drug–expenditure reduction and improvement in treatment decision-making. The purpose of the proposals is to get oncologists to discuss change. [...] The [lead]  proposal: a UK-style spending threshold for cancer drugs in the United States. [...] In their proposal, Drs. Fojo and Grady propose that an American threshold for anticancer drugs be set at $129,000, which is the cost of a QALY in patients treated with renal dialysis. Dr. Fojo said that dialysis was an appropriate comparator. The threshold would apply to federal reimbursement of cancer drugs such as that from Medicare. [...]

In interviews with experts, Medscape Oncology found support for the idea of a UK-style spending threshold for cancer drugs but little belief in the political possibility of its enactment. [...]

Ultimately, the United States may not have the appropriate kind of healthcare system to implement a cost-effectiveness type of approach to evaluating drugs, including cancer drugs, said another expert.

“These approaches tend to be more common in ’single-payer’ systems, like those with a public healthcare system or nationally coordinated health insurance,” said Michael Drummond, PhD, from University of York, in the United Kingdom, and the former president of the International Society of Pharmacoeconomics and Outcomes Research. Currently, “about 25 to 30 countries” employ cost-effectiveness analysis in their review of drugs, he told Medscape Oncology. [...]

The high cost of drugs is part of the equation that threatens quality of cancer care in many areas of the country, says COA president Patrick Cobb,MD, who is also a partner in Hematology-Oncology Centers of the Northern Rockies, in Billings, Montana.

“The increasing cost of drugs, declining Medicare reimbursement, and current financial crisis have created a ‘perfect storm’ that jeopardizes community cancer clinics, where most Americans with cancer are treated,” he said in a press statement. Dr. Saltz sees a change coming in cancer drug prices. “There is not enough money to pay for what we are doing. However, I don’t think the price drop will be a well-thought-out event,” he said, adding that the drop may come only if the cancer care system nears a “total collapse.”