Category Archives: Health Economics

The drugs Avastin (bevacizumab) and Provenge (sipuleucel-T) are two of the most expensive drugs in the world. Bevacizumab costs in the range of $100,000/year for treatment and simuleucel $93,000 for a course of treatment.

Neither cures patients. In studies in breast cancer bevacizumab has been found minimally effective, if at all. When compared to outcomes of patients not using the drug, It appears to delay progression by a few months and survival by even less then that (between no survival advantage to a few months). Sipuleucel-t gives about the same degree of response in prostate cancer. Despite this apparent lack of efficacy, and the advice of an FDA advisory board, Medicare has decided to continue to pay for the use of these agents.

The problems with these drugs are two-fold. One, they do very little to improve survival. And second, they are outrageously priced.

Regarding pricing, we’ve allowed drug companies to price drug grotesquely by:

• Providing them government sponsored monopoly (a patent) for a generation. (so much for free markets)
  
• Allowing drug companies to take drugs developed in part with government research funding private without offsetting the government’s investment by requiring licensing or reasonable pricing of the drug
  
• Prohibiting Medicare from negotiating price with drug companies. This was part of the Medicare D law and has resulted in the inexorable upward spiraling of drug prices. We pay more for drugs in the U.S. than anywhere else in the world. WE ARE NUMBER 1!
  
• Cost effectiveness is not in our health care system’s vocabulary. We regularly use drugs with limited to no effectiveness.

Medicynical Note: For many years as an oncologist I used drugs with limited efficacy just on the chance that my patient might benefit. Desperate people accepted remarkable levels of toxicity in the hope that they will be the lucky ones and have a long survival benefit. During treatment, they all thought the drug was working, until it became clear that the disease was progressing. In retrospect very little of the “response” (and I’m thinking of patients with colon cancer treated with 5FU during the 70’s and 80’s) was tumor regression due to the drug. We almost never saw tumor’s decrease in size. Rather each cancer has a biology that affects how rapidly it will grow and recur. There are other poorly understood factors such as the patient’s immune system’s affect on tumor growth that also may come into play. But what was clear from comparison studies of 5 FU and no treatment was that very few patients benefitted. It should be noted that at the time 5FU in 500 mg vials cost $5.00.

Medicare has now announced that despite the proven limited efficacy of these drugs (bevacizumab and sipuleucel-T they will continue to pay for them–at the price demanded by the manufacturer.

If we are unable to rationally use these grotesquely expensive agents we will undoubtedly be rationing through increased co-pays, increased cost of insurance, and lo ball insurance that does’t cover such agents.

The Times has an article highlighting the costs of new drugs for prostate cancer. Mind you, these are drugs that have a very limited ability to extend life in patients with advanced disease.

In the last 15 months, three new drugs that extended the lives of prostate cancer patients in clinical trials have been approved by the Food and Drug Administration and several other promising medicines are in clinical trials.

And:

Men with that late-stage cancer had a median survival of about a year and a half using docetaxel. The new drugs each added two to five months to median survival when tested in clinical trials. Doctors say that men taking more than one of the drugs in succession would be expected to live more than two years. (Medicynical note: The last sentence is completely unproven and highly doubtful if it means to live 2 years beyond the original 18 months achieved by docetaxel alone. One wonders which doctors are saying this?)

And:

Provenge costs $93,000 for a course of treatment, while Zytiga costs about $5,000 a month. Another of the new drugs, Sanofi’s Jevtana, costs about $8,000 every three weeks.

With other pricey drugs on the way, said Joel Sendek, an analyst at Lazard, “We could be talking easily $500,000 per patient or more over the course of therapy, which I don’t think the system can afford, especially since 80 percent of the patients are on Medicare.”

Medicynical Note: New drugs are protected by a government sponsored monopoly (patents), allowing a generation of exclusive use to the developer of the advance.

Health care of course is different from computers or other consumer products. There is limited choice about both the timing, source and type of treatments available, particularly in diseases that have fatal consequences.

As such it’s a wonderful set-up for manufacturers. They have exclusive rights to a product that their customers feel they must have. The customer is buffered from the true cost by his/her insurance coverage. The insurer is under huge pressure from the patient to cover everything that they need and simply passes the costs on to policy holders.

Cost efficacy is not a consideration. Patients believe that they will be the one who will benefit and have excellent results. This is the situation even where 1/2 the patients treated get little or no benefit and the treatment at best provides minimal life extension–as in these drugs. It should be re-emphasized that the judgement that these drugs could provide years of survival is completely untested and likely false.

There were very few cost efficacy studies at the recent ASCO meetings.

One set of three studies sponsored by the drug company (Novartis) compared zoledronic acid with denosumab made by Amgen. The abstracts looked at the cost of a QALY (quality adjusted life year) in patients with metastatic prostate cancer (abstract 1), and breast cancer (abstract 2). The third was an economic evaluation (abstract 3) comparing the costs of preventing a skeletal related event in prostate cancer. Not surprisingly, since they were sponsored by Novartis, these studies “confirmed” that zoledronic acid was more “cost effective.”

The studies found that while zoledronic acid is slightly less effective than denosumab in preventing skeletal related events, denosumab is more expensive.

From abstract 1:

Compared to ZOL (Table), Dmab resulted in fewer SREs, more QALYs, and lower SRE-related costs, but higher drug-related and total costs ($5,313). Overall, Dmab resulted in an incremental cost of $1,250,000 per QALY gained.

From abstract 2:

Dmab resulted in fewer SREs, more QALYs, and lower SRE-related costs, but higher drug-related and total costs vs. ZOL, resulting in an incremental cost of $6,884/pt (Table). The cost per QALY gained was $644,000 when excluding SAEs ($613,000/QALY when including SAEs).

It is telling, and perhaps reflects a “strategic” omission, that neither abstract 1 or 2 reveals zoledronic acid’s cost of a QALY gained.

However, abstract 3 gives a better indication of the relative costs and efficacy of the approaches.

The total costs incurred over one year were estimated at $37,854 for denosumab and $30,499 for ZA, with an incrementally higher cost of $7,355 for denosumab. The estimated number of SREs during the one-year period was 0.56 for denosumab and 0.67 for ZA, where the denosumab patients had 0.11 fewer SREs.

QALY= quality adjusted life year
SRE= Skeletal related event

Medicynical Note: What is unstated in these cost comparison studies is that none of the current generation of treatments to prevent bone events including zoledronic acid and the newer monoclonal, denosumab, meet the guideline for cost effectiveness. (a QALY at a cost of less than $50,000-$100,000.

A study in the Journal Urology in 2004 compared the outcomes of patients getting zoledronic acid with patients receiving placebo and noted:

The nominal cost per skeletal complication avoided was US dollars 112300 (95% CI US dollars 6900 to US dollars 48700) and the cost per additional patient free of skeletal complications was US dollars 51400 (95% CI US dollars 26900 to US dollars 243700). Nominal within-trial cost per quality adjusted life-year was US dollars 159200, which varied widely in sensitivity analyses.

To put it in perspective, in 2004 when drug costs were much lower than now, the health care non-system in the U.S. spent over $50,000 to save one additional skeletal complication. That approximates the yearly median income in our country.

It’s been well documented that bevacizumab is not very effective in breast cancer.

However, Roche/Genentech continues to lobby it’s use for this indication. At the ASCO 2011 meeting there was yet another study documenting the lack of efficacy and value of the drug in breast cancer. Needless to say there were no company hyped headlines touting the results.

The study from Singapore found:

Bevacizumab added 0.49 years of PFS and 0.135 QALY with an incremental cost of $100,300 and therefore a cost of $204,000 per year of PFS gained and an ICER of $745,000 per QALY.

PFS= progression free survival
QALY= quality adjusted life year
ICER= the additional cost per one life year gained of one treatment over another

Medicynical note: Three reasons why bevacizumab should not be used in breast cancer. High costs, lack of benefits and additional toxicity.

The numbers are embarrassing. $745,000 for an additional life year (ICER). A statistical gain of just .135 life years (QALY).

If Genentech/Roche were to price the drug at 1/10 the current price it would be marginally cost effective, while remaining ineffective in extending life. It’s amazing that there is still a discussion about this indication.