Critical Condition

High-Priced Cancer Drugs: Are They Worth It?

The New York Times ran an editorial Wednesday implicitly arguing that Medicare should consider withdrawing coverage for high-priced cancer drugs that have “modest” benefits, such as Avastin for metastatic breast cancer and Provenge for metastatic colon cancer. The Times makes the best possible case for rationing access to pricey cancer drugs, but the case ultimately falls short. Here’s their argument:

Many patients with advanced cancer must feel great relief after last week’s decisions by Medicare to pay for two drugs that provide limited medical benefits. For these patients, even a few more months of life is beyond price.

The unaddressed issue, however, is whether public and private insurance should continue to pay the staggeringly high cost — reaching $88,000 and $93,000 in some cases — for drugs that offer modest help to the typical patient. A prime driver of our escalating health care costs is the advance of medical technology and the understandable desire of patients and doctors to adopt the latest treatment. Sooner or later, as the nation struggles to contain health care spending, we may need to devise measures to determine whether very high-priced drugs provide enough medical benefit to warrant paying the bill.

Where to begin? High price tags make an easy target, but drug costs aren’t bankrupting the U.S. health-care system. They’re only about 11–12 percent of total health-care costs; total direct costs for oncology care were about $125 billion in 2011 (that’s all cancer costs, including drug costs). That’s a lot of money, but it’s not the lion’s share of the nation’s $2 trillion health-care tab.

Innovations in cancer treatment are also very valuable, because cancer is a disease that is rapidly fatal if it’s left untreated. A 2010 NBER paper found that from 1988 to 2000, life expectancy for all cancers increased by about four years, adding nearly $2 trillion in social value. Five-year survival rates for all cancers are now 66 percent, compared with 50 percent in the 1970s. Researchers have estimated that a reduction in cancer mortality of 1 percent would have a value of $500 billion; they estimated a complete cure would be worth a mind-boggling $50 trillion.

Pointing the finger at Provenge and Avastin ignores the tremendous strides that the U.S.’s commitment to market-driven cancer innovation has made possible. Early stage breast cancer now has more than a 90 percent five-year survival rate, in part thanks to new drugs like Herceptin. Testicular cancer, once a death sentence, is now eminently treatable (think Lance Armstrong). Gleevec has largely transformed CML (a type of leukemia) into a serious but manageable chronic illness, with even better drugs available to patients who can’t tolerate Gleevec. 

Provenge is an extraordinary new type of treatment that harnesses a patients own immune system to help fight metastatic prostate cancer that has stopped responding to hormone treatment. It is one of the very few treatments available for patients in this condition, and it actually extends survival, with minimal side effects. A four month survival benefit is only “modest” if you ignore the fact that almost nothing else works.

Avastin is a groundbreaking drug for several types of cancer. The problem is that it only appears to help a small fraction of patients with metastatic breast cancer, and no one knows — yet — how to identify those patients. But that is also largely true for many cancer drugs, which are used “off label” as doctors and patients desperately search for treatments that work.

Should we stop using these tools because they don’t work as well as we’d like? Or learn better how to use them? Given the choice, I think most Americans would prefer the latter option.

Markets are usually much better at incorporating new information than central government bureaucrats. Avastin’s use in metastatic breast cancer was already declining before the FDA’s advisory board last week voted to remove its indication for metastatic breast cancer. Doctors — sophisticated consumers — were already adapting their practices to the best medical evidence available before FDA firestorm began. Collecting and disseminating more information on “what works” is preferable to blanket policies that prevent experimentation and learning.

Cancer treatment is also shifting rapidly, and targeted treatments are the wave of the future. Companies know this and are rushing treatments to market that are matched to tumor variations present in individual patients. Hopefully, breast cancer patients who respond to Avastin may someday be identified using similar diagnostic tools. 

But what about the high cost of new cancer drugs? As a society, we often spend more on higher need populations — like AIDS or cancer patients — out of a recognition that their disease is extraordinarily deadly and disabling. High prices also drive rapid innovation in the field. Provenge and Avastin are good, but the “second generation” drugs developed using similar principles — harnessing the immune system, choking off tumors’ ability to use the body’s vascular system for nutrients — are likely to be more powerful because researchers will learn from earlier experience. 

Much of the high price of new cancer drugs is also attributable to the lengthy, risky, and expensive process for testing these drugs and submitting them for FDA approval. The FDA and Congress should be doing everything possible to streamline and accelerate cancer drug development to help bring those costs down. Cheaper and faster development will lead to more competition and likely lower prices.

Last but not least, many of today’s high priced cancer drugs — like Gleevec — will become cheap generics when they lose patent protection (as Gleevec will in 2015). In the interim, high prices fund new cancer research. 

These are all better options than endorsing blanket coverage decisions — which won’t produce what we all want, which is better treatments for cancer.

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