Are Cancer Drugs Too Expensive? Good Luck Answering This One

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market-movements-2-1388612-mHere s a simple question with nothing even close to a simple answer:

Do cancer drugs cost too much?

He says, There are obvious cases of recently approved cancer drugs that offer very little benefit in terms of either disease-free progression or extension of life. The annual cost for these drugs is roughly $100,000, but it can be more than twice that. The only reason that, in my mind, the answer is not clear-cut yes is that sometimes these drugs perform well better than expected, based on clinical trials.

ACSH friend and former Trustee, Dr. Tom Stossel has plenty to say about this in his May 2015 Forbes piece entitled New Cancer Drugs Are Expensive, But Price Controls Are Misguided. He puts much of the blame on more stringent FDA regulations: ¦ [T]he cost of getting new drugs to patients has increased 100-fold over the past 50 years. This inflation has resulted in part from the Food and Drug Administration imposing more stringent requirements on drug developers to gain drug approval.

He also adds something that anyone in the business already knows: Most drugs that appear promising in early tests fail in late-stage clinical trials because they don t work or have unacceptable side effects. Therefore, manufacturers must price the few that succeed to provide revenues sufficient to cover the development costs of the majority that do not.

The fact that cancer is part of the equation makes the value of new drugs even fuzzier, since, when most people even hear the word, they feel like they are staring a death sentence in the face. Thus, there is a huge emotional impact that is simply a result of this disease, which makes concepts like value much harder to determine.

In general, we at ACSH have been supportive of high drug prices when there is clear value; the new hepatitis C drugs being the best example. This one was a slam-dunk. Cancer prices are quite different.

Since medical costs have been increasing sometimes astonishingly and more people are being covered for prescription drugs, something has to give. Most people would agree that in cases where a cancer drugs works spectacularly, or very poorly, it is rather easy to determine the drug s value.

However, this is rarely the case. Most of the time it is impossible to make that clear distinction. But a very ambitious group writing in the June 20 Journal of Clinical Oncology has put in a Herculean effort to quantitatively assess the real value of cancer treatments.

The paper, entitled American Society of Clinical Oncology Statement: A Conceptual Framework to Assess the Value of Cancer Treatment Options, is written by no fewer than 24 authors representing 24 of the top oncology hospitals and research centers.

Lead author Lowell E. Schnipper, MD Harvard Medical School and colleagues discuss multiple criteria that are used to determine the real value of a drug or drug combination.

If you try to read this, your head will explode.

ACSH views head explosion as an important public health issue these days, so we have summarized the paper s content and a few conclusions:

  • The Centers for Medicare and Medicaid Services (CMS) has projected that US health care spending will reach $4.3 trillion and account for 19.3% of the national gross domestic product by 2019
  • Even though the cost of cancer treatment is low when compared to the overall health budget, One of the fastest growing components of US health care costs is cancer care, the cost of which is now estimated to increase from $125 billion in 2010 to $158 billion in 2020.
  • Patients have traditionally been insulated from high drug costs by insurance coverage, but these costs are being inexorably shifted to patients.
  • This puts both the patients and oncology specialists in a difficult position, since in an ideal world; patients would get the best possible treatments regardless of cost. We are not in an ideal world.

The section Recent American Society of Clinical Oncology Efforts explains the length and scope of the report. The work began in 2007, when the American Society of Clinical Oncology (ASCO) formed the Task Force on the Cost of Cancer Care.

A very comprehensive section, Focus on Value, discusses three core principles that were used in their assessment of how to fairly determine the needs of patients, while keeping costs in mind:

  1. Maintaining the physician-patient relationship
  2. Providing all necessary information so that the most informed decision can be made.
  3. The physician must take the lead in ensuring that available resources best used are used most effectively.

These principles are woven into a general plan, which will ensure that decisions are made for the right reasons. This is no easy task.

And will it work as planned? Hard to say. Their analysis is so thorough that you run into phrases like: For example, posit that treatment regimen A was administered as adjuvant chemotherapy to patients with breast cancer with zero involved axillary nodes and produced a median DFS of 92% at 5 years, whereas treatment B, administered as adjuvant chemotherapy to patients with breast cancer with four to nine involved axillary nodes, produced a median DFS of 72% at 5 years. Using an absolute grading scale, regimen A is assigned a score of 4, and regimen B receives a score of 3, leading to the conclusion that regimen A produces greater clinical benefit, when, in fact, its superior outcomes might be accounted for by the better prognosis of the patient population treated. Huh?

This is why we mentioned the plan, but warned you against reading it. It is important in that it represents a tremendous amount of work, which will impact your future cancer treatment (especially access to it). In other words, very complicated algorithms are being constructed that will govern what will happen to you should you be unfortunate enough to be a cancer patient. They will be very difficult to understand.