Cancer Drug Costs: Oncologists Must Be 'Part of the Solution'

Zosia Chustecka

September 06, 2013

The extremely high prices being charged for new cancer drugs in the United States, and all the factors contributing to these high prices, are discussed again, but this time, oncologists are urged into action.

"As oncologists advocating for our patients, we have a responsibility to better understand these issues, explain them and their implications to our patients, and work with our professional societies and other stakeholders to be part of the solution," writes David Pfister, MD, from the Memorial Sloan-Kettering Cancer Center in New York City, in an editorial published online September 3 in the Journal of Clinical Oncology.

He was commenting on "the challenge to the status quo on cancer drug pricing" that was issued by Hagop Kantarjian, MD, from the University of Texas M.D. Anderson Cancer Center in Houston, and colleagues in an essay published online on May 6 in the Journal of Clinical Oncology.

That status quo sets drug prices arbitrarily without regard to the real value of a drug, write Dr. Kantarjian and colleagues.

They suggests that, instead, the initial price of a new cancer drug should be set according to a value-based system, which would take into account several parameters: the benefit in overall or progression-free survival, improvement in quality of life, and the reduction of adverse effects and/or cost when compared with existing therapies.

In their detailed review, Dr. Kantarjian and colleagues discuss the many factors that contribute to the extremely high prices of cancer drugs in the United States, which can be 2 to 4 times the price charged for the same drugs in other countries. They also make the point that even within the United States, cancer patients undergoing the same treatment are charged differently according to which medical insurance system they are in, and some end up paying substantial amounts for cancer drugs, especially the new oral agents, out of their own pockets. These high costs are causing many patients with cancer to abandon treatment because they cannot afford it, they note, pointing out that medical debt is now the most common cause of personal bankruptcy in the United States.

Some of these points have already been made in a recent article in Blood by Dr. Kantarjian and colleagues, which was widely reported in the lay press and created such a buzz that politicians were spurred into action.

In this latest essay, Dr. Kantarjian and colleagues outline a potential solution, which they believe would result in a justum pretium, a "just price" where the price reflects worth.

A Valued-based Price

"In oncology, there seems to be little correlation between the benefit and a new drug and its price," the researchers write. They assert that this approach of charging "what the market will most responsible for the spiraling drug prices."

As an alternative, they propose a system that would set the initial price according to the "value" that the drug provides. Such a value-based system should involve providers, regulators, patients and advocates, representatives of insurance and pharmaceutical companies, and other interested parties.

This consortium would assess the value that the new drug provides, taking into account any advantages that the new drug offers over existing therapies.

A simple measure of efficacy is survival advantage, i.e., the amount of time by which a life is prolonged, they note.

As a realistic example, they suggest that a drug that prolongs survival by more than 6 months, or by more than a third of life expectancy, would be considered as "extremely effective" and would merit a higher price than a drug that extends survival by 2 months, which should be priced "much lower."

They also suggest a price range of around $50,000 to $60,000 per year for drugs that are in the highest bracket, and a range of prices below $30,000 per year for drugs in the lower bracket.

This is much lower than the prices that are currently being charged for some new cancer drugs. Nine of the 12 new cancer drugs approved by the US Food and Drug Administration in 2012 were priced at more than $10,000 per month, they note.

They also point out that the annual cost of treatment of chronic myeloid leukemia is $80,000 to $92,000 with imatinib (Gleevec) and rises to $115,000 to $138,000 with the next-generation drugs in this class. Targeted drugs now approved in the United States for use in renal cell carcinoma (which include sorafenib, sunitinib, and 5 others), which improve progression-free survival but have minimal impact on overall survival, cost $70,000 to $140,000 per year.

The researchers also include some calculations of cost for an additional month of life, similar to those used by the National Institute of Health and Clinical Excellence in the United Kingdom.

In addition to creating a new value-based system for establishing drug prices, the authors propose several others steps that can be taken to reduce drug prices, including allowing Medicare to negotiate prices paid for drugs, as the Department of Veteran Affairs already does. And they have high hopes for the proposals.

"By encouraging prices based on real value, drugs should become more affordable and their cost less burdensome to patients," they write.

They also suggest that pharmaceutical companies will be incentivized to "develop better drugs that everyone can agree really are better."

Oncologists Can Change Prices

That oncologists acting together can make an impact on drug prices is illustrated by the recent case of aflibercept (Zaltrap), for which the manufacturer, Sanofi, cut the price drastically after protests. The company was responding to a protest from oncologists at Memorial Sloan-Kettering who refused to add the new drug to the hospital inventory because it cost twice that of a similar agent, bevacizumab (Avastin), used in the same setting. After the researchers publicized their decision in an op-ed in the New York Times, the company began offering discounts that effectively halved the price of the new drug.

However, the price drop was a bit of an illusion, pointed out one of the Memorial Sloan-Kettering doctors afterward. The discount by Sanofi "doesn't really address the problem," because Medicare reimbursement and patient copayments are still based on the higher list price, said Leonard B. Saltz, MD, chief of gastrointestinal oncology at the cancer center. In other words, hospital and cancer practices would pay less for the drug because of the 50% discount, but the reimbursement would stay the same. This actually might give doctors and hospitals a financial incentive to use aflibercept, he explained.

Nevertheless, oncologists came together, took action, and had an impact on drug pricing.

In his editorial, Dr. Pfister, who is also from Memorial Sloan-Kettering, calls for more action, reminding oncologists of their responsibilities toward their patients, even though "the best way forward may be controversial."

Dr. Kantarjian and colleagues warn that consequences of not taking action now could be grim. "We believe that leaving the pricing of cancer drugs solely to pharmaceutical companies could bankrupt our health system and Medicare, and is unfair to our society and to those unfortunate individuals who develop cancers."

J Clin Oncol. Published online September 3, 2013. Editorial

J Clin Oncol. Published online May 6, 2013. Full text


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