A Lonely Voice Asking Tough Questions on Cancer Cost-Effectiveness

7/30/12Follow @xconomy

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access to a database maintained by the National Cancer Institute, which keeps track of treatments patients are given, and their outcomes. But that’s only a piece of the puzzle he’s looking for. To get a more contextual picture of cost-effectiveness, he wants to form partnerships with health providers that have a lot of other data on patients in their electronic medical record systems. And he wants to bring the insurers to the table, too, because they are the ones with another piece of the puzzle: claims records. If you can stitch those things together to get a more holistic view of cost and effectiveness, it could become a valuable resource to educate the public in the Seattle area, and it might even be scalable to the rest of the country, Ramsey says.

“We hope to be able to educate people about value in healthcare,” Ramsey says.

Ramsey has already dug up some disturbing findings about how much money is spent, and how little value is gained. One study showed that among patients who have insurance, almost 40 percent suffered from “severe financial strain” which was defined as re-mortgaging one’s home to afford medication, borrowing money from friends, or using up their life’s savings. Another study found that Genentech’s hit antibody drug, bevacizumab (Avastin), had almost a zero percent chance of being cost-effective for lung cancer patients (actually, it was a 0.2 percent probability). That hasn’t stopped the growth of cancer drug spending. Now that some cancer drugs can routinely cost $10,000 a month, and insurers are looking to shift more of the cost burden onto individuals, individuals are going to feel pressure to pay up at one of the most stressful and scary moments in their lives. The bills can now add up incredibly fast.

“It’s easy to spend $250,000 treating a cancer patient in a short period of time,” Ramsey says.

Even as the costs keep going up, and cancer patients ought to be doing better, deep disparities remain in how cancer patients get treated depending on where they live, how much money they make, and which institution or doctor they originally see. Just by shining a light onto those cost-effectiveness disparities—which Atul Gawande did with McAllen, TX in an influential New Yorker article a couple years ago—could make a huge difference, Ramsey says.

I wouldn’t go so far as to say we need a draconian system to discourage drug developers from creating new products. Drug prices are rising fast, but there are a lot of other factors contributing to increased healthcare spending. Drug companies can, and should, be able to recoup the investments they make in the form of high drug prices. But if you’re going to charge a high price for a drug, I think a company needs to have a much stronger value proposition than “Hey, we shrank tumors in half for 20 percent of patients. Now hand over your $100,000.” It needs to be more like, “Hey, my drug has an 80 percent chance of helping people with this genetic profile, and those people can expect to live an extra year, with high quality of life.” Now you’re starting to really talk about $100,000 of value.

Sadly, drug companies tend to be more interested in satisfying the short-term profit desires of their investors than they are in truly delivering cost-effective care to patients. Ramsey told me about research he’s done into Amgen’s pegfilgrastim (Neulasta), a white-blood cell booster that helps patients fight off infections when their immune systems are weakened by cancer chemotherapy. Ramsey and colleagues wanted to know if this drug—an effective product that generated $4 billion in revenue last year for Amgen—was being utilized among patient groups most likely to benefit. He found it was underutilized among patients at the highest risk of a dangerous complication known as febrile neutropenia, and it may be overused by patients who had a low risk. (Amgen, when asked if it changed marketing practices in response to the findings, said in an emailed statement that the drug should be used in accordance with its FDA approved prescribing information. “Our marketing efforts reflect our emphasis on first and every cycle treatment as the best way to reduce the risk of febrile neutropenia in appropriate patients.”)

Given that we’re in the thick of corporate earnings season, you can expect to hear a lot of companies reporting on all the usual measurements of success to their investors about sales, profits, earnings-per-share. You will not hear companies talking about proper utilization of their products. But pharma companies would be smart to get more engaged with the health economics crowd, which looks at different barometers of success, like how many quality years of life patients can get from certain healthcare interventions.

It’s easy to find drug companies, hospitals, and health insurers that say they are all about improving patient outcomes. Being against cost-effectiveness sounds bad, like being against Mom and apple pie. Nobody wants to say they are against delivering better patient outcomes. But actions, as always, speak louder than words. It’s time for these various profit-minded players to prove their commitment to cost-effective patient outcomes, by getting more serious about asking these kinds of questions. If we don’t, we’ll just end up paying more and more in taxes and insurance premiums for cancer care, with no real idea of whether it’s worth the money.

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  • Bill Ghormley

    Thank you for reminding us all that there are indeed 3 corners to the life science triangle = quality of care + access to care + cost-effectiveness of care!

  • Del Merenda

    I believe Luke is confusing the issue. Research is a pre-requisite to break-through innovation. There are many incredible successes in other industry sectors that started out fiting Luke’s cost/benefit position. Should we then shut down innovation because cost presents a substantial challenge? Does not sound like the ‘can do’ free-enterprise mindset that has served society so well for generations.

  • http://twitter.com/nswa nwscience.org

    Debate today at Seattle City Club on “Cost of overtreatment.” A few seats remain. http://www.seattlecityclub.org/20120730

  • Steve pemberton

    Agree with Del. How do you make progress and begin to save more lives if you don’t invest in the treatments currently available? How do go from 3 months mean survival, to a year, to five years if you don’t invest in the treatments available today? The hail Mary passes and statue of liberty plays may be thrilling and sexy, but it’s the short yardage plays that are the fundamental keys to a winning game.

    Mr. Timmerman’s populist rant aside, there are questions of cost, access, and disparity of treatments that Fred Hutch may be able to address by giving providers and consumers more transparency on efficacy, but the suggestion he makes that it’s not worthwhile to continue to bring treatments to market that push the survival envelope is nonsensical. It denies the fact of market forces as a selective factor in treatment decisions. Patients, providers, caregivers, and family will continue to balance treatment decisions, versus cost, versus quality of life and outcomes. I for one would have paid the price to have 3 more months with my brother.

  • steve stroop

    Thanks Luke for some provocative ideas to consider. These discussion will be ongoing. Critisms aside, this introduction to an emerging research area by a nationally recognized cancer treatment facility is important to anyone interested in cancer treatments of the future. Like it or not, the current definitions for effective treatments are changing and need to change. In the next few years the market will likely be saturated with an increased number of approved biological treatments for cancer (mAbs, etc) all costing around $100K and which only provide a few months survival benefit. The business case for another marginally effective treatment will fade. “The market” will dictate that future products have to be better in terms of cost and benefit. Econ-Omics analysis like the Fred Hutch team will also likely help researchers, manufacturers and providers accelerate a transition to improved technologies worthy of investment and high cost of treatment. Sure, it’s important to keep making the “incremental” improvements in therapies and products – but that doesn’t mean each increment deserves to be the foundation of a billion dollar business with double digit annual returns does it?

  • HIFU works

    There is a treatment for cancer that isn’t being used in the USA as the drug companies run us, and no drugs are needed. It’s High Intensity Focused Ultrasound, My husband had it done out of the country as it is available everywhere except here. It took 2 hours and then we went back to the hotel. He was treated 4 years ago and is still cancer free, no side effects, no pain. If the word got out about this, we could pressure the FDA to approve it. It’s been in trials all over the country for 7 years, but the hospitals won’t tell anyone about it so one enters the trial, thus it’s never going to be approved. It’s a travesty. Maybe if health care wasn’t motivated by profit we could move forward to treating people with cancer with the best treatments.

  • Bernard Munos

    Spot on! By offering drugs that only governments can afford without a solid value proposition, drug companies are inviting pushback that will ultimately defeat the $80,000 pill business model. It’s already happening, and will only get worse (compulsory licensing, reference pricing, denied reimbursement, Makena, etc). Pharmaceutical companies cannot expect to be exempt from cost/benefit analyses.

    The other fallacy is that a lot of marginal innovation will eventually add up to a breakthrough, and therefore $80,000 pills that give patients a few extra weeks (of poor quality of life) should be supported. No. This is inconsistent with the historical record. All the NSAIDs have not delivered a breakthrough for rheumatoid arthritis. TNF blockers did. All the SSRIs still have not produced a breakthrough for refractory depression. Gleevec and Rituxan were not the end products of a cascade of marginal improvements. Neither were ACE inhibitors, sumatriptan, omeprazole, epogen, biphosphonates, etc. Breakthrough drugs start with breakthrough science. Iterating on the same target/scaffold may be easier, but seldom delivers clinical benefits that qualify as breakthroughs.

    There are no shortcuts in drug R&D. High-risk research, as it is practiced by companies such as Novartis or Vertex, is what delivers breakthroughs. For $80,000+ treatments, society is right to demand breakthroughs and reject pseudo-innovation.

    • John

      “High-risk research, as it is practiced by companies such as Novartis or Vertex, is what delivers breakthroughs”.

      Except when it doesn’t. For schizophrenia, pharma has now looked at compounds targeting alpha-7 nicotinic receptor antagonists, 5-HT6 receptors, acetylcholinesterase, mGluR2, NMDA glycine site coreceptors, H3 receptors, PDE10, AMPA receptors, D3, CB1, D4, and neurokinin receptors, without finding any useful, let alone breakthrough products. Useful product with reduced side effect profiles have been discovered by incremental improvements in early SGAs.

      A simllar list of even more expensive “risky” failures can be written for AD (GSI’s, antibodies, PDE9, 5HT targeted compounds) oncology (MMPs, most kinase inhibitors) and a wide variety of trans therapeutic area platform technologies (antisense, gene therapy, nanotechnology).

      The answer is not to take more risks, but to lower investment to a point where you are not forcing money on research problems that do not represent real scientific opportunities.

  • annoyed

    these articles, which ignore bigger problems, annoy me greatly. the elephants in the room:

    constrained supply of physicians — through organizations like the AMA that limit the number of new physicians per year.

    constrained supply of hospital facilities — through monopolistic consolidation

    constrained supply of insurance — through further predatory monopolism

    constrained supply of new drugs — through FDA policies that don’t deny many safe, effective drugs from coming to market

    lack of preventitive care — how often do you go in

    those are the biggies. the pill that actually extends your life and costs some amount of money is a much better deal than paying for those porsches in the garage.