A Rational Step in Holding Down Costs in Cancer Care

Alice Goodman

November 2012, Vol 3, No 8 - Economics of Cancer Care


?The cost of cancer care matters; in fact, it matters so much that Memorial Sloan-Kettering Cancer Center (MSKCC) in New York City has decided not to include in its formulary the newly approved drug ziv-aflibercept (Zaltrap), which was re­­cently approved for use in patients with progressive metastatic colorectal cancer. The decision is based on considering cost versus benefit rather than on “newer is better.”

Peter B. Bach, MD, Leonard B. Saltz, MD, and Robert E. Wittes, MD, all from MSKCC, explain in an Op-Ed piece in the New York Times (October 15, 2012) that bevacizumab (Avastin) costs approximately $5000 per month, which is less than 50% of the cost of ziv-aflibercept.

The side effects of both drugs are “roughly similar,” they say, and the survival benefit for both drugs is a median of 1.4 months. (The manu­facturer of ziv-aflibercept has since announced it was cutting the cost by half.)

They call the medical culture to task for unequivocally equating “new” with “better.”

“In most industries something that offers no advantage over its competitors and yet sells for twice the price would never even get on the market. But that is not how things work for drugs.

The Food and Drug Admin­istration approves drugs once they are shown to be ‘safe and effective.’ It does not consider what the relative costs might be once the new medicine is marketed,” Dr Bach and colleagues write. US organizations and societies that set guidelines for physicians also rarely factor cost into their determinations, they note.

Ignoring costs, however, is “no longer tenable,” they urge. “Soaring spending has presented the medical community with a new obligation.” Cost must be considered when choosing a specific therapy. “This is particularly the case with cancer, where the cost of drugs, and of care overall, has risen precipitously.”

In addition to the cost to society, the cost burden of cancer care is increasingly being borne by individual patients.

Some patients with cancer report exhausting all of their savings to pay for care, and some have been driven into bankruptcy by treatment costs.

One of 10 patients with cancer now reports spending more than $18,000 out of pocket on cancer care.

To put this particular issue in perspective, colorectal cancer is typically diagnosed in older people, many of whom live on Medicare and fixed incomes. Medicare requires copayment for drugs to treat cancer, so 20% of the cost of ziv-aflibercept, bevacizumab, and other cancer drugs is passed on to supplemental insurance or to patients themselves.

An older patient without gap insurance coverage would have to pay more than $2200 monthly for treatment with ziv-aflibercept, which is more than the monthly income of half of the Medicare recipients, the authors state.

The authors believe that the political climate has prevented presidential candidates from addressing the runaway costs of cancer therapies. They acknowledge that the step that MSKCC is taking regarding this particular drug will not halt the larger problem of out-of-control rising healthcare spending, “but it is a step in the right direction—one of many we need to take,” they warn.

“The current level of spending on health care, estimated to be $2.8 trillion this year, is already too high. The growth rate in health spending is unsustainable,” the authors state, challenging the US healthcare system to apply a value-based approach to care. “The future of our health care system, and of cancer care, depends on our using our limited resources wisely.”