The Lynx Group

A Call for Transparency in Drug Pricing

January 2013, Vol 4, No 1

In the December 2012 issue of Value-Based Cancer Care (VBCC), several Editorial Board members addressed the recent events surrounding the cost of cancer drugs and the reduction of the price of ziv-aflibercept (Zaltrap). VBCC continued this discussion with Al B. Benson III, MD, FACP, FASCO.

VBCC: The overall agreement in the December 2012 perspectives was that the cost of cancer drugs is not sustainable, and that the case of ziv-aflibercept may signal a turning point in drug pricing. Do you agree with this assessment?

Dr Benson: I think the lack of transparency is a key issue in drug pricing, and, in the case of ziv-aflibercept, the manufacturer priced it theoretically to match the 10-mg dose of bevaciz­umab (Avastin). Too often we hear that drug pricing is based on “what the market will bear.” This highlights the absence of transparency in cancer drug pricing.

However, we live in an era in which what the market may bear is already overtaxed, so the discussion about pricing needs to be much more transparent. People are looking very closely at the new drugs, which are all expensive, and are asking whether the benefit versus risk versus cost ratio adds up to a meaningful benefit? This is the reality, and what happened with ziv-aflibercept was just a good example of the frustration that people are feeling with drug pricing. The pharmaceutical companies have also been targeted because of what has been perceived as variability in costs of drugs, with patients in the United States paying premium prices compared with other regions in the world.

VBCC: Lee Newcomer, MD, MHA, of UnitedHealthcare, called the reduction of the cost of the drug, after the market’s response to the initial cost, a “watershed moment.” Do you share that perspective?

Dr Benson: People have been concerned about the cost of cancer drugs for quite some time. As more drugs are developed, and as various cancers have become chronic diseases, with patients living longer and the cost of care rising, we have all had to take notice. I think that ziv-aflibercept was such a blatant example that it allowed all of these tensions and frustrations to percolate to the surface and explode. The concern about cost is not new, but the focus on cost is increasing, and for very good reasons.

If we look at the demographics, we expect to have larger numbers of patients with cancer who are going to require interventions, and such is going to put an increasing strain on the healthcare system. From a research perspective, and from a drug development perspective, we have to reemphasize the need to develop better selection criteria for patients who are receiving these agents. There is a great deal of talk about the use of biomarkers for patient selection for targeted drugs—so-called “personalized” or “precision” medicine. That is clearly the trend, and one that will be increasingly important during the process of targeted therapy development.

One of the problems in relation to drugs such as ziv-aflibercept or beva­cizumab is that we still have no biologic marker to enhance patient selection. It is certainly an area of much research, but until we have better ways to select patients for treatment, the use of very expensive drugs for all or unselected patients with a given disease will remain a critical problem.

However, although this is true, even if we develop very good selection criteria, there are going to be persistent challenges if drugs are still very expensive. Will patients be able to afford these agents, even if we have narrowed down the percentage of patients who will truly benefit from them? So the discussion as to how do we make these treatments available to the appropriate cancer population around the world at a fair, affordable price and at the same time make sure that the drug companies are getting some return on their investments—because, after all, medicine is a business, and drug development is a business—captures the issue at hand.

VBCC: And it is an expensive business.

Dr Benson: Indeed, and people have to be able to make a degree of profit on their investment, which is a basic business principle that we have to understand. At the same time, as mentioned, drug pricing is not at all transparent, and so we have no sense of what would be a fair charge to make the drug development process profitable and to ensure availability. And if there is a perception that drug development is not going to be a profitable industry, and one that carries great risk of financial loss, we run a very severe risk of stifling innovation. So, we need to have a balance in drug development, and this is why all stakeholders should be at the table to discuss these issues in an open forum.

Alas, in medicine, too often the components of the healthcare industry have been ensconced in different silos, thus discouraging interaction. We have witnessed an emphasis on increasing the separation among the industry, physicians, and other healthcare stakeholders, when, in fact, we should be actively encouraging everybody in the drug development arena—government representatives, third-party carriers, employers, researchers, patients, clinicians—to participate in the discussion as to how to foster overall drug development, including conducting the important clinical trials and paying for the rising cost of translational research as well as the routine care costs for patients who participate.

How do we address the issue of tumor marker development with these targeted therapies, which from a clinical trial perspective raises the cost of doing the study and introduces other concerns, such as the complexities of tumor heterogeneity and the potential for multiple mutations? For example, patients with metastatic disease may have an increasing need for multitumor biopsies over time to identify evolving mutations to enhance drug selection in sequence. When we do that, although it has the advantage of potentially developing better profiles of patients who will benefit from the treatment, it also increases the cost of doing clinical research.

As stressed, this is going to take partnerships; these partnerships in­­volve not only the patients and the clinicians, but also the pharmaceutical industry, diagnostics companies, radiologists, and other disciplines in medicine, to develop improved selection criteria as well as better efficacy parameters to ascertain the benefits of a treatment approach. But, right now, these efforts are not cohesively linked, and it is a struggle to get people to­­gether to address these issues.

VBCC: Do you believe that physicians, patients, payers, and pharmaceutical companies can address the issue of drug costs together?

Dr Benson: This is essential, and if we are going to have a transparent system of medical care, emancipation from the silos is key. It will require people to come to grips with multiple forces, some of which are opposing forces, and that means coming to terms with the overall costs of medical (or cancer) care, which is more than simply the drug costs. There are many other costs that are of concern, such as imaging costs (and the appropriate use of imaging), and the growing number of diagnostics that are becoming available. How do we develop the evidence to support the use of new diagnostics, as well as other procedures? How do we best generate the information that will show clinically relevant benefit for patients while also demonstrating cost-effectiveness and ensuring availability?

To more fully embrace translational research, it is going to take a partnership relationship, because no one entity is going to be able to bear the cost of this type of research. It will take everyone involved, and it is going to take very transparent discussions about where advances in medicine best integrate with treatment paradigms, including how to deal with the associated costs for evolving services that will be essential for optimal cancer care.

This means becoming more evidence directed when ordering diagnostic tests and becoming more thoughtful about who should get which treatments. Part of this discussion is the issue of when to address palliative care or hospice care, which is critical if we are to avoid futile interventions at the end of life.

These are topics for a societal debate, and it is very hard to have societal discussions if we are not engaging everybody in the entire process of care delivery. We remain far removed from doing this, not only because the issues are complex for such a heterogeneous society as ours, but also because we have been unable to articulate the complexities—as was evident in the raging debate over the Affordable Care Act—and continue to lock the constituencies in silos, so we have the “good guy/bad guy” scenarios. That type of atmosphere has to end.

VBCC: This is the objective of the annual meetings of the Association for Value-Based Cancer Care (AVBCC).

Dr Benson: The AVBCC meetings are great, because they bring together various stakeholders, and they certainly discuss many critical issues. This is why I have enjoyed these meetings, which are among the very few where different stakeholders are getting together to express their viewpoints.

A part of the problem is how to get people engaged. The insurance industry is certainly willing to agree that everything costs too much, but what is not discussed much is, how do we foster innovation while maintaining evidence-based comprehensive and accessible care to all? We have to come to terms with if medical enterprises are not profitable to at least some level, innovation will be discouraged and medical advancements will surely suffer; advances in the delivery of safe, efficient cancer care, for example, also would be at risk.

So, we have to have a profitable enterprise, but how do we seek a profitable, healthy business atmosphere while making it affordable and transparent, with everyone readily at the table? That is a massive challenge. The pharmaceutical industry may be very reticent to participate, because it perceives competition and has not been compelled to foster a transparent process. On the clinical side, we often feel that our hands are tied, and that we may be able to offer scientific advice as to how to design clinical trials and so forth, but we have no say about pricing. It creates a dilemma. We have to begin with transparency and have all sides participate in the conversation, without focusing on blame, and rather look at possible solutions.

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