Tag Archives: costs

The price isn’t right, but neither is the effect

Marc Beishon

Marc Beishon


Concern about the high prices of cancer drugs is nothing new but there are signs now that the issue may be coming to a head. There is a flood of new agents coming onto the market and, if anything, the prices charged are still going up, with more agents reaching eye-watering levels above $100,000 a year. Global annual spending on cancer drugs has now hit $100 billion for the first time.

At the upcoming European Cancer Congress, a study by a UK pharmacologist on how much it costs to make cancer drugs such as imatinib (Glivec) will reveal that Americans in particular are paying hugely more than the manufacturing cost, but Western European prices are also high.

Just a few weeks ago, a group of more than 100 senior oncologists, mostly in the US, launched a ‘grassroots’ petition calling on the powers that be in America to address the harm that high drug prices cause patients. Writing in Mayo Clinical Proceedings, the oncologists says the average price of new cancer drugs in the US increased 5- to 10-fold over 15 years, to more than $100,000 a year in 2012 and the cost of drugs for each additional year lived (after adjusting for inflation) has increased from $54,000 in 1995 to $207,000 in 2013.

Of course, the US has particular conditions that determine drug prices – its Medicare system for older people is not allowed to negotiate prices, and the lack of a universal healthcare system means many patients are faced with huge ‘co-pays’ on drugs through their private insurers. As the Mayo article says: “For a patient with cancer who needs one cancer drug that costs $120,000 per year, the out-of-pocket expenses could be as high as $25,000 to $30,000.” In calling for people to sign the petition, the oncologists say: “The individuals most harmed and least engaged in these discussions are cancer patients because they are exhausting their energy, resources, and time fighting for their lives,” and note that advocacy proved successful in stimulating treatments for those affected by the AIDS epidemic.

Cancer drug prices are of great concern elsewhere, of course. In European hospitals and healthcare systems the pressure on budgets for new drugs is great. In the UK, for instance, there are endless arguments over reimbursement for new treatments. In 2011 the government resorted to setting up a special cancer drugs fund for England to pay for treatments that the National Health Service would not otherwise fund.

At European Union level, there are a string of initiatives, such as the new European Commission expert group on Safe and Timely Access to Medicines for Patients (STAMP), which in turn is hearing updates on various projects such as the European network for Health Technology Assessment, and the network of Competent Authorities on Pricing and Reimbursement. But joint negotiation of pricing among countries, which could lower cost, is not in the Commission’s remit, although there is a joint procurement agreement for vaccines and other “medical countermeasures”. There is though a move by Belgium and the Netherlands to engage in joint drug price negotiation, initially for orphan drugs, where small patient numbers can mean high prices, and which will also involve cooperation on registries and evaluation.

The US oncologists propose a number of actions that could help, including price negotiation, allowing drug imports, faster access to generics, a reform of the patent system, and perhaps most importantly, taking steps to include both the cost and efficacy of drugs in assessments of treatment value and in guidelines. In fact, England already has what many countries, notably the US, lack – a body that recommends reimbursement only for treatments that meets value for money criteria, namely the National Institute for Health and Care Excellence (NICE), which uses QALYs (quality adjusted life years). But the hasty establishment of the cancer drugs fund shows that the pressure to access treatments beyond NICE’s recommendations (and the NHS budget) is great, as stories about patients denied drugs flood the media.

The high price of cancer drugs would of course be less of a problem if they were more effective, but breakthroughs have been the exception not the rule. As Fatima Cardoso, co-chair of the Advanced Breast Cancer conference, has recently commented in Cancer World: “In early breast cancer the standards of care haven’t changed in more than two decades; in advanced disease median overall survival is still a dismal two to three years.”

Certainly, more can be done to add to measures of drug effectiveness. This year, the European Society of Medical Oncology introduced the first version of the Magnitude of Clinical Benefit Scale (MCBS), which grades therapies with both curative intent and palliative intent, and which its developers say is a validated tool that can be used to prioritise drugs for assessment and develop clinical guidelines founded on magnitude of benefit rather than just level of evidence. A quick check on several grade 4 (out of 5) palliative drugs in the MCBS shows they are also recommended by NICE, so there may be some duplication here, initially, although at least one with a grade 5 score, the breast cancer drug Kadcyla, was turned down by NICE owing to its very high price and is now one of several drugs cut from the NHS cancer drugs fund.

Meanwhile in the US, the American Society of Clinical Oncology (ASCO) has just launched a framework for assessing the value of new cancer therapies “based on treatment benefits, toxicities and costs”. Developed by ASCO’s Value in Cancer Care Task Force, this aims to be a “user friendly” tool that oncologists can use with patients to discuss the value of new treatments compared with standard ones, and has been out for consultation. A paper in JAMA Oncology has also looked at how applying a value-based cost can work in a drug used in metastatic lung cancer, but political forces in the US are hard to influence along these lines.

Along with efforts to pin down cost-effectiveness and to carry out more meaningful clinical trials, Cardoso says a priority is to ensure that each patient is treated according to current knowledge and guidelines, which is often not the case. And in England, Karl Claxton, an economics professor specialising in health technology, has published research that calls into question the cost-effectiveness threshold that NICE uses – saying that it is in fact too high. His study made the news, as the implication is that some money spent on cancer drugs, and particularly the drugs funded by the special fund, would be more effectively deployed across the health system, both on standard cancer care and other health conditions.

The UK’s NHS has had long battles with drug companies over price but drugs are also rejected because of lack of effect. Were the US to take similar steps to agree on what constitutes an effective new therapy then there could be a move towards more meaningful drug development as well as lower prices for patients. As the authors of the ESMO MCBS paper also say: “A key challenge for the future will be to establish whether there can be harmonisation between the different approaches to value in Europe and the US.”