Category Archives: Health Economics

What’s missing from this week’s American Society of Clinical Oncology (ASCO) meeting is analysis of costs. Yesterday we noted exemestane prevented one cancer for 1.1 million dollars spent.

Today we have the story that Avastin is useful to extend the lives of ovarian cancer patients 2.4 months for an estimated $100,000 (cost of one year’s treatment with the drug) plus the expenses of other chemotherapy, doctors visits, and imaging studies–probably another $50,000. Abstract of study here.

The trial enrolled 1,528 women with newly diagnosed ovarian cancer, of whom 90% had advanced disease, Kristensen reported.

They were treated over an 18-week period with a standard chemotherapy regimen of carboplatin (Paraplatin) and paclitaxel (Taxol), with or without bevacizumab.

Patients who were treated with bevacizumab also had maintenance therapy with bevacizumab for another 36 weeks, while those in the other arm were simply observed.

The primary endpoint of the study, he said, is progression-free survival and on that measure, women in the bevacizumab arm had a 13% benefit, which was significant at P=0.039.

For those women, the median time to progression was 19.8 months, compared with 17.4 for those in the control arm, he said.

It was also noted in a quote from the author of the study Gunnar Kristensen that “Overall survival, he said, was less clear”

Medicynical Note: This was a drug company (Roche) sponsored study–Kristensen has a financial relationship with Roche. It’s probably too much to hope that the cost of the intervention would be mentioned, much less factored into the discussion of the results.

Incomes in the U.S.:

50th percentile for household income in the U.S. is $42,327 down significantly over 10 years. Meanwhile health care costs have more than doubled.

Medicynical Note: Compare the incomes earned in a year with the cost of recent drug advances, . Provenge for example is $93,000; Benlysta for Hep C is in the range of $50,000; Yervoy for melanoma $120,000. There are many more in this price range, most of which offer only slight benefit to patients compared with less expensive conventional therapies.

PHama’s pricing is irrational when compared with median and average incomes and their rate of growth. Somehow through creative marketing, lack of serious price negotiation, lack of competition, lack of concern regarding cost/efficacy and poor price controls in out insurance products, we’re bankrupting ourselves.

When the story of this era is written there will be disbelief, similar to that regarding the tulip bubble, that it ever happened and that it was allowed to happen.

Vertex Pharmaceuticals received FDA approval for their hepatitis C drug Incivek. It appears to be a very effective agent when combined with standard therapies.

In clinical trials, patients were treated with a combination of Incivek and standard therapies for 12 weeks. They continued on the standard treatments for another 36 weeks, but many of them were cured within 24 weeks. Vertex said about 79 percent of previously untreated patients were cured after treatment with Incivek. The drug was also much more effective in patients who had relapsed, had some response but not a cure, or had no response to other drugs.

And the cost:

The company says a 12-week course of treatment will cost $49,200, (Wholesale price) compared to $30,000 for standard therapies.

Medicynical Note: This appears to be an effective approach to a disease which heretofore has been difficult to manage. The cost, however, is prohibitive, particularly when one consider the additional expense of combining it with standard therapies.

The manufacturer expects it to generate billions of dollars in income but a big question is how to pay for it. Insurers have difficulty raising rates; most individuals don’t have $50,000:  and our non-system is approaching financial bankruptcy.

One would hope that instead of billions in profits the emphasis would have been on  millions cured. But then that’s the American medicine in the twenty-first century.

We’ve had health care rationing all along. It’s gotten worse in recent years with costs increasing at near double digits each year (130% over 10 years) and health insurance becoming unaffordable for many. With our aversion to paying taxes to cover health care (also wars, roads, social security, etc) we’re now to the point where those who cannot afford it, don’t get it. Rationing no?

From the Washington Post:

Cash-strapped states are scaling back efforts to provide life-saving medicines to HIV patients.

The result: more than 8,300 people — a record number — are on waiting lists in 13 states to get antiretrovirals and other drugs used to treat HIV and AIDS or the side effects, mental health conditions or opportunistic infections. And that number probably understates the need, say advocates, who note that many states have simply eliminated waiting lists or reduced eligibility.

Illinois, Georgia, Florida, Utah, Alabama lead the charge.

Medicynical Note: The annual cost of drugs for HIV is over $11,000/year in government sponsored programs. It’s much more if an individual goes to his/her pharmacy and buys the drugs.

This, in a country with a median household income of about $50,000, which means half of our citizens make less.

HIV drugs are of course the tip of this health care rationing iceberg. It’s not unusual in our community to encounter patients delaying evaluation of breast lumps until the tumor has spread. It’s not unusual to meet patients unable to afford the recommended medications and not having treatment. “Free” ER care is simply inadequate for managing ongoing problems in addition to being the most expensive, inefficient care available.

Our national health care problem is two fold. First we don’t seem to be able to find a structure to assure health care access to all our citizens (reform may help with this). Second, our providers and technology suppliers (PHarma, and other patent holders) have priced their product beyond the reach of mere mortals. Consider drugs with limited efficacy costing over $100,000/year.

Our non-system’s mantra is cost plus not cost efficacy. Health insurers, providers, suppliers, et. al. seem more intent on assuring profit margin and incomes than assuring affordable quality health care.

It’s a perfect mess. Make no mistake, with less funding, limited access and fewer people covered by insurance. People will die.

American Exceptionalism?

A new multibillion dollar drug, Benlysta (belimumab) for Lupus. It’s available in the U.S., approved by the FDA in November. And now is approved for marketing in Europe.

The drug is given IV every four weeks and costs $35,000 in the U.S. It has some efficacy but (from the Times):

Benlysta reduced symptoms in two clinical trials. But about 11 patients would have to be treated in order for one to benefit. The staff of the F.D.A. and some committee members questioned the drug’s effectiveness, pointing out that many patients with the most severe symptoms were excluded from the trial.

In the trial that did, Americans and Canadians did not seem to get as much benefit from the drug as people from other regions. Some panel members expressed concern that the trial did not include enough African-Americans, who tend to have more aggressive forms of the disease and did not appear to gain any benefit from Benlysta.

“It’s unsettling to me to contemplate approval of a drug for patients in the United States, for practitioners in the United States, that does not seem to work for patients in the United States,” said Dr. David Blumenthal, a committee member and rheumatologist at Case Western Reserve University. He voted against approval.

And in Europe:

One company-funded study showed 43 percent of patients given a high Benlysta dose with standard therapies felt relief, and had no further organ damage after one year of treatment.

That compared with nearly 34 percent with a placebo and standard therapies, which typically include immunosuppressant drugs such as Roche’s CellCept and steroids such as prednisone.

Benlysta, known generically as belimumab, is given once a month by intravenous infusion. In the United States, the drug costs an average of $35,000 per patient a year.

The manufacturers have yet to set a price in Europe but Schoenebaum said he was assuming it would be around $23,000. Costly modern biotech medicines are often priced lower in Europe than in the United States.

Medicynical Note: One can only admire the chutzpah of drug manufacturers charging $12,000 more for a drug in the U.S. than elsewhere. A drug that has proven less effective in U.S. patients and one that proves only a slight benefit (9%) over standard therapy.

The pharmaceutical industry is a triumph of marketing over reason. Marginally effective drugs sold at a huge premium to desperately ill people.

We in the U.S. are perfect fools for paying more for these drugs than any other country in the world. American exceptionalism strikes again!

Costs are a dirty word in medicine. Physicians piously pronounce that they wouldn’t want money to influence their decisions and many patients become irate at the thought that their care might be modified somehow, even if it doesn’t effect outcome, by cost.

A modest study reported in the May Archives of Surgery (behind pay wall) and noted in Healthday found that simple reminders of cost led to more efficient use of a low cost procedure phlebotomy:

“The use of laboratory tests has been rapidly increasing over the past few decades to the point where phlebotomy is a substantial proportion of hospital expenditure, and much of it is unwarranted,” wrote Dr. Elizabeth A. Stuebing, of the University of Miami, and Dr. Thomas J. Miner, of Brown University in Providence, R.I.

At the start of the study, average per-patient daily costs were about $148 and the overall weekly cost was $36,875. During the study, the lowest per-patient phlebotomy charge was $108 (27 percent lower) and the lowest overall weekly cost was $25,311. By the end of the 11-week study, about $55,000 had been saved, according to the researchers.

Medicynical Note: Our non-system provides incentives for utilization not savings. As a result it’s the most expensive and inefficient in the world. We are number one!

Imagine if providers were asked about need and alternatives for expensive interventions and treatments? And reminded about the costs of “necessary” procedures? Imagine if insurers were reminded about costs, administrative costs, duplication and executive salaries.

We do things in health care that make little medical or economic sense. We can continue on the current path, and continue to ration care economically (the republican solution) or do it more rationally.