Cancer Drug Costs (2008)

In 2008, while the Presidential campiagn was in full swing, I had a chance to do a story on the cost of cancer drugs for Clinical Oncology News. I wanted to get a wide range of thoughts and opionions, and I wanted to speak with some of the top minds in oncology.

BY DAVID JAKUBIAK for Clinical Oncology News

At the New Mexico Cancer Center in Albuquerque a breast cancer patient recently approached Barbara L. McAneny, MD wanting to switch from oral chemotherapy to intravenous chemotherapy.

The issue wasn’t the effectiveness of capecitabine. It was the cost.

Dr. McAneny, who is also CEO of the New Mexico Oncology Hematology Consultants, Ltd., said the patient’s predicament epitomized a growing issue in oncology treatment.

“She was doing beautifully on her oral chemotherapy, but she capped out on her association health plan because the drug is expensive. It cost her about $3,000 a month for the drug that had her breast cancer completely under control. She’s asymptomatic and she’s working, she simply can not afford $3,000 a month for the drug.”

Dr. McAneny said the patient was hoping the clinic could pick up the cost of IV treatment, because the clinic gives out IV chemotherapy – over $500,000 of it annually – to patients in need.

But the practice cannot afford to make up for inadequate insurance plans in addition to caring for uninsured patients, she said. So, Dr. McAneny had to encourage the patient to drop insurance, which would leave the patient uncovered, but might make her eligible to receive free or reduced cost medicine through programs aimed to assist the uninsured.

The experience at the New Mexico Cancer Center is being played out in oncology offices across the country. Cancer drugs are expensive and more and more patients, who are uninsured or underinsured and can’t afford them, are desperate for the drugs they believe are saving their lives.

This combination can be particularly troublesome when it comes to the new generation of biomedical drugs.

These drugs, their makers say, come with the promise of revolutionizing the treatment of cancer. But they come at a cost that has some clinicians wondering if the revolution is worth the expense.

“I’m concerned we’re not getting all we think we are paying for. The prices seem to be based on what we would have liked the drug to have offered, rather than what the drugs actually offer,” said Leonard B. Saltz, MD, a gastrointestinal oncology specialist with the Memorial Sloan-Kettering Cancer Center in New York City.

“If you think about the drugs, and I’m talking about the drugs for colorectal cancer, because that’s what I know the best, they are all relative failures compared to what they were supposed to be. They were supposed to replace the drugs that came before them, get rid of the side effects of those drugs, and be more effective. But none of them have been able to do this. So the fall-back position had been to add them into cocktails with the older drugs. In fact, arguably, none of them are as good as fluorouracil, which was developed in 1957 and is still the focus of most of our treatment plans.”

To Dr. Saltz, the question isn’t one of whether drugs are affordable, it’s whether the cost can be justified by the outcomes.

“They carry with them a price as if they were the new treatment. But that price is just added on to the old treatment, and, as a result, the aggregate costs become very, very high. If these drugs were worthy of terms like ‘breakthrough’ there might be an argument for the cost, but what we are seeing are drugs making small amounts of progress and then being anointed as a breakthrough  new standard and priced as a breakthrough new standard, which they are not. They add very modestly to what came before.”

The cost of extending life

Edward Lang disagrees.

A spokesman for the South San Francisco-based biotechnology company Genentech, which makes oncology drugs including bevacizumab and trastuzumab, Lang said his company’s goal is to cure cancer. And while they have not met that goal, their products have changed the way cancer is treated.

“Many of our drugs are first in class and are changing the way cancer is treated,” he said.

They are also expensive.

Jeanne Sather is a Seattle-based writer and author of the blog assertivepatient.com. Now on lapatanib, she used to take both bevacizumab and trastuzumab.

“When I was on Herceptin and Avastin combined my cancer care cost $300,000 a year and I nearly maxed out my insurance plan which had a lifetime cap of $1 million.”

Breaking down that cost Sather said, her insurance company was billed $78,812 for trastuzumab alone. She noted that dosing varies based on the weight of the patient, so actual cost for patients will vary slightly from case to case.

Lang said the wholesale price of a year’s treatment with trastuzumab is $40,000.

But Sather called that number misleading.

“I get really mad whenever I see that number from Genentech, because that is the wholesale price of Herceptin, and no patient pays that. The drug is marked up twice more, by the distributor and then by the cancer center, before the patient gets the bill.”

Patients with private insurance aren’t the only ones shelling out dollars for the drugs. According to federal data, Medicare spent $517 million on bevacizumab and trastuzumab alone in 2006, the last year for which data are available.

Lang said his company prices drugs based on several factors.

“Drug development is very expensive, typically they say about $800 million to $1.2 billion is the range for new drug development. It’s also pretty risky and time consuming. If you look at Herceptin, that drug took us about 25 years to develop before we were able to get data for the adjuvant setting where there is the greatest potential for a cure, and as you can imagine, that also cost hundreds of millions of dollars.”

Genentech, however, has not released a specific dollar amount for the cost of bringing the drugs to market.

Another factor in the pricing of the drug is the cost of drugs already on the market, he said. Finally, “even after drugs like Avastin and Herceptin were available, our research continued because our goal is to reinvest and develop new and even better medicines.”

As he explained the pricing of cancer drugs, Lang added that “cancer therapies account for about less than 1% of United States health care costs and about 6% of pharmaceutical costs.”

But Dr. Saltz noted that if oncology is 1% of the health care costs, but 6% of pharmaceutical costs, that that sounds like a disproportionately high expenditure on oncology pharmaceuticals.

He also wonders if patients truly understand what these new drugs have accomplished.

“If you look at the data of the study that put bevacizumab on the market it showed a median survival advantage of 4.7 months. Now, as an investigator, I know that’s very impressive. But if you ask the average person on the street how impressed they are that the survival advantage with Avastin is less than five months I’m not sure they’d be thrilled,” Dr. Saltz said.

Lang, however, pointed to the gains as offering hope and the potential for future advances.

“While something like a few months may not look like much to someone who is healthy, it is giving hope to a patient and their family, and it may be something that we can build on in the future.”

And, he added, “these stats are medians so half of those people are living longer.”

This gets to the heart of another issue with the cost of these drugs, said Dr. McAneny, clinicians simply don’t know who the drugs will work on.

“I have a patient who has metastatic breast cancer who has been on Herceptin alone controlling her disease for two years. She feels great, she feels fine, for her that’s the best drug in the world. Am I going to take her off it? I’m scared to death to. So for her, it fills that promise,” she said.

But, she said, figuring out why drugs sometimes work and sometimes don’t is only going to add to the costs.

“We’re hoping that as people learn more about the cancers of people and the genes of the cancer that we might get a little better at predicting who is going to respond to this therapy or that therapy. The problem is that all of that testing is also expensive and the reason it is expensive is that it is very labor intensive,” she said.

Changing thinking about treatment

Dr. Peter D. Eisenberg, MD, of California Cancer Care in Greenbrae, Calif., said the promise of biotech drugs has been seen, but not to the degree that many patients believe.

“Take the treatment of chronic myelogenous leukemia as an example. We’ve known for a long time about the Philadelphia chromosome and CML, and finally Dr. Brian Drucker at Oregon Health and Sciences University came up with a medicine that attacks that particular abnormality, and it works and it’s a wonderful drug. But that hasn’t been true for lung cancer, breast cancer, colon cancer, or prostate cancer,” he said.

So, he argued, the question of the value of a drug needs to be altered.

“I would reframe the question to say: Is the benefit of chemotherapy adequate to not only pay for it, but also put up with it. That is not a medical question. It is a philosophical patient-doctor question. And that depends on what patients are taught about both the benefits of chemo and the risks of taking it. That’s a job for the oncologist. The thing is that sometimes we are a little more optimistic about the effectiveness of our treatment than is warranted and paint a rosier picture than is warranted. One of the real challenges in what I do is to give patients and their families a realistic view of what they are up against and to help them to make the decision to treat it or not.”

In what he called an ironic twist, Dr. Saltz said that it is, in part, the presence of public and private health insurance that fuels these excessive drug costs.

“Everybody is paying with someone else’s money. Virtually every insured patient in the United States is a virtual millionaire when it comes to the cost of expensive drugs and therapies because there is some third party payer– whether that’s private insurance or the government – that is picking up the tab. If you were selling drugs at $10,000 a dose to the general public you’d go broke. But we’re selling to a population that’s never seeing the bill. The average person, to use the technical economic term, has no ‘moral hazard,’ no down side, to spending the money. If, hypothetically, I told you there was a drug that had a 1% chance of extending your life by a year and it wouldn’t cost a nickel out of your pocket, your reaction, logically, would be ‘of course that’s the best shot I’ve got.’ But suppose you were paying for that drug; suppose you were going to have to mortgage the house, or spend the kids’ education fund on it; then you would be forced to make an economic decision. You start saying, ‘OK, my life is precious, but what are they really offering me? What is it going to cost me, and is it worth it to me?’”

Nancy L. Keating, MD, MPH, of the Department of Health Care Policy at Harvard Medical School in Boston suggested that a more global view of extending life with limited resources be explored.

Keating explained that these drugs are primarily used to treat metastatic disease. They have been found to have a modest benefit in increasing survival, for example, by a few months. But they don’t cure the disease; they extend life for patients who would other wise die a few months sooner. “Cost effectiveness analyses don’t find them to be cost effective, when compared to other interventions that might improve societal health more, things like treatment of hypertension, treatment of diabetes, and screening for cancer,” she said. “Of course, when someone is dying, and a doctor can offer them a modest benefit like a few more months of life, it seems like the right thing to do. But from a societal perspective, it may not be the best way to be spending limited health care resources.”

Dr Saltz agrees. Ultimately, he said, the universal fear of death is being exploited.

“We’re all terrified of dying and we’re terrified of cancer, and forcing ourselves to do something we do in society every day, which is confront the real dollar cost and value of an extra year of human life, is something we don’t want to do. So, we take the very lofty approach of saying there should be no value limit set on human life. But that is not

realistic. The cost is being set. We are debating whether the drug companies are setting the cost higher than we, as a society, can afford or should be willing to pay.”

In Albuquerque, Dr. McAneny said a crisis is already underway.

“New Mexico is an interesting place because 20% of our patients who have Medicare have no Medigap and 22% of our population, 430,000 people are uninsured, so this is an problem we see every day in the clinic. Not having insurance and getting cancer is a financial disaster,” she said.

And when patients get desperate for treatment it’s often the clinic they look to as their firewall, they look to their clinician as their last hope for care.

“In the ideal world we’d be able to treat people and not have to worry about keeping the lights on, but that’s not the world we live in any more. I think doctors miss those days when we were not businesspeople, but we have to be businesspeople. The light bills don’t care what I do, and my staff wants raises every year, as I have fewer and fewer things I can cost-shift from and more and more insurance plans I have to cost-shift to, so it gets more and more difficult,” McAneny said. “The practice is committed to taking care of the people who walk through the door, regardless of their ability to pay. But I can foresee a time in the future when we are going to have to say we can no longer do this, and keep the lights on, and be there for the patients of the future.”