Physicians at Sloan
Kettering Cancer Center have taken a giant step toward stemming the tide of
unconscionable pharmaceutical industry price gouging. Sloan-Kettering physicians said NO to Sanofi’s
new anti-cancer drug, Zaltrap which the company priced at $11,063 per month.
As a result, in what is considered a
watershed moment, Sanofi promptly offered to reduce the price of Zaltrap by
half.
The Sloan-Kettering
physicians have challenged not only Big Pharma--they have challenged the profession for its blind acceptance of industry-dictated
healthcare policies that have led to skyrocketing medical costs that bear no
relationship between the price of drugs and the clinical value they provide for
patients.
They note that both FDA’s
approval process and Medicare reimbursement guidelines ignore entirely the
absence of benefit and cost burden.
THE NEW YORK TIMES
October 14, 2012
In Cancer Care, Cost Matters
By PETER B. BACH, LEONARD B. SALTZ
and ROBERT E. WITTES
AT Memorial
Sloan-Kettering Cancer Center, we recently made a decision that
should have been a no-brainer: we are not going to give a phenomenally
expensive new cancer
drug to our patients.
The reasons are simple: The drug, Zaltrap, has proved to be no
better than a similar medicine we already have for advanced colorectal
cancer, while its price — at $11,063 on average for a month of
treatment — is more than twice as high.
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 if they are shown to be “safe and effective.” It
does not consider what the relative costs might be once the new medicine is
marketed.
By law, Medicare
must cover every cancer drug the F.D.A. approves. (A 2003
law, moreover, mandates
payment at the price the manufacturers charge, plus a 6 percent cushion.) In
most states private insurers are held to this same standard. Physician
guideline-setting organizations likewise focus on whether or not a treatment is
effective, and rarely factor in cost in their determinations.
Ignoring the cost of care, though, is no longer tenable. Soaring
spending has presented the medical community with a new obligation. When
choosing treatments for a patient, we have to consider the financial strains
they may cause alongside the benefits they might deliver.
This is particularly the case with cancer, where the cost of drugs,
and of care over all, has risen precipitously. The typical new cancer drug
coming on the market a decade ago cost about $4,500 per month (in 2012
dollars); since 2010 the median price has been around $10,000. Two of the new
cancer drugs cost more than $35,000 each per month of treatment.
The burden of this cost is borne, increasingly, by patients
themselves — and the effects can be devastating. In 2006,
one-quarter of cancer patients reported that they had used up all or most of
their savings paying for care; a study last year reported
that 2 percent of cancer patients were driven into bankruptcy by their illness
and its treatment. One in 10 cancer patients now
reports spending more than $18,000 out of pocket on care.
Which brings us back to our decision on Zaltrap. In patients with
advancing, metastatic colorectal cancer, the new drug, approved by
the F.D.A. in August and jointly marketed by Sanofi and Regeneron, offers the
same survival benefit as Genentech’s Avastin,
which works through a similar molecular mechanism. When compared with the
standard chemotherapy
regimen alone, adding either medicine has been shown to prolong patient lives
by a median of 1.4 months. Major clinical practice guidelines, like those from
the National Comprehensive
Cancer Network, agree that Zaltrap is no better than Avastin in this
setting. (Full disclosure: Two of us, Dr. Bach and Dr. Saltz, have been paid
consulting fees by Genentech.)
But Avastin costs roughly $5,000 a month: very expensive in its
own right, yet less than half of Zaltrap’s price tag. And while the side
effects in both drugs are roughly equal, doses of Avastin generally take less
time to administer than those of Zaltrap, which makes Avastin more convenient
for patients.
Consider that colorectal cancer is typically diagnosed in older
individuals and the cost issue becomes starker still. Many patients are on
Medicare and living on fixed incomes. And because Medicare requires patients to
co-pay for cancer drugs, 20 percent of the cost of drugs like Zaltrap and
Avastin is passed on — absorbed either by supplemental insurance or by the
patients themselves.
To put these percentages in perspective, an older colorectal
cancer patient without extra insurance would have to pay more than $2,200 out
of pocket for a month’s treatment with Zaltrap. That’s greater than the monthly
income for half of Medicare participants.
Once you take all this into account it may seem surprising that
the decision to exclude Zaltrap from our hospital’s formulary was a hard one to
make. But because our medical culture equates “new” with “better” so
unequivocally, a decision like this one can seem out of place at a leading
cancer hospital
Political rhetoric today is similarly slanted. Our refusal to
adopt this remarkably expensive therapy risks being labeled “rationing,” not
rational.
This political climate also helps explain why the Affordable Care
Act precludes Medicare from changing its coverage or payment amounts based on
cost comparisons like the one we have outlined, even when two drugs appear to
work equally well. And it is probably why neither presidential candidate has
addressed runaway cancer drug prices.
But if no one else will act, leading cancer centers and other
research hospitals should. The future of our health care system, and of cancer
care, depends on our using our limited resources wisely.
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.
Of course, we know our decision about Zaltrap will not
meaningfully address these larger problems. Projected United States sales of
Zaltrap in 2013 are less than $150 million, or 0.005 percent of all dollars
spent on health care. Our use would account for a very small percentage of even
that number.
But it is a step in the right direction — one of many we need to
take.
The
writers are doctors at Memorial Sloan-Kettering Cancer Center. Peter
B. Bach is the director of the Center for Health Policy and
Outcomes, Leonard
B. Saltz is chief of the gastrointestinal oncology service and
chairman of the pharmacy and therapeutics committee, and Robert
E. Wittes is the physician in chief.
~~~~~~~~~~~~~~~~~
The New York Times
EDITORIAL Incredible Prices for
Cancer Drugs
November 12, 2012
An unusually bold
stand by doctors at the Memorial Sloan-Kettering Cancer Center in New York has
forced a big drug company to reduce the cost of an overpriced
drug for treating colorectal cancer that was no better than a cheaper
competitor and did almost nothing to extend a patient’s life. It is a
heartening sign that alert and aggressive physicians can potentially play a
major role in helping to reduce the escalating costs of health care for
treatments of marginal value.
The drug is
Zaltrap, which was developed by Sanofi, a large French pharmaceutical company,
and Regeneron Pharmaceuticals, a small biotechnology company in Tarrytown, N.Y.
It was approved by the Food and Drug Administration in August as a second-line
treatment for colorectal cancer after initial courses of treatment have stopped
working. It is used for treating colorectal cancer that has spread from the
colon to other parts of the body and is administered intravenously.
Zaltrap was
initially priced at about $11,000 a month, more than double the price of a
competing drug, Avastin, made by Genentech, which is itself considered too
expensive by many doctors for the minimal medical benefit it delivers. When
added to standard cancer treatments, both drugs improve the median survival
time of patients by a minuscule 1.4 months.
The doctors at
Sloan-Kettering balked at the high price of Zaltrap and decided not to approve
the drug for use in the hospital. Three of the doctors then wrote an
Op-Ed article in The New York Times explaining their rationale and making a
strong case that there is often little relationship between the prices of drugs
and the value they provide. Companies often seem to charge what the market will
bear for cancer drugs — as much as $35,000 a month and $100,000 a year in
various cases.
The president of
the American Society of Clinical Oncology recently praised Sloan-Kettering for
addressing “the elephant in the room: unsustainable costs in cancer care.” With
other doctors expressing support for Sloan-Kettering’s move, Sanofi announced
last Thursday that it would effectively cut the price of Zaltrap in half.
Sanofi is not changing the official price for Zaltrap but will offer discounts
of about 50 percent to the doctors and hospitals who buy the drug and then
administer it intravenously to patients.
There are few
constraints on escalating cancer drug prices in the current health care market.
That will need to change. Sloan-Kettering has shown what the medical profession
can do to reduce costs if it has a mind to.
~~~~~~~~~~~
The New York Times
November 8, 2012
Sanofi
Halves Price of Cancer Drug Zaltrap After Sloan-Kettering Rejection
By ANDREW POLLACK
In an unusual
move, a big drug company said on Thursday that it would effectively cut in half
the price of a new cancer drug after a leading cancer center said it would not
use the drug because it was too expensive.
The move — announced by Sanofi for the colon cancer drug
Zaltrap — could be a sign of resistance to the unfettered increase in the
prices of cancer drugs, some of which cost more than $100,000 a year and
increase survival by a few months at best.
Zaltrap came to market in August at a price of about $11,000
a month. Soon after, Memorial
Sloan-Kettering Cancer Center in New York decided not to use the drug,
saying it was twice as expensive but no more effective than a similar medicine,
Avastin from Genentech. Both drugs improved
median survival by 1.4 months, doctors there said.
Three doctors at Sloan-Kettering publicized the cancer
center’s decision last month in an Op-Ed article in The New York Times.
“Ignoring the cost of care is no longer tenable,” they
wrote. ”Soaring spending has presented the medical community with a new
obligation. When choosing treatments for patients, we have to consider the
financial strains they may cause alongside the benefits they may deliver.”
Sanofi executives argued that the price they had set
was very similar to that of Avastin. “The intent was not to charge a premium,”
Christopher A. Viehbacher, the chief executive of Sanofi, said in an interview
last month.
Sloan-Kettering, he said, was basing its price
comparison on a dose of Avastin that was half the dose Sanofi used in its own
comparison.
On Thursday, Sanofi backed down. “We believe that
Zaltrap is priced competitively as used in real-world situations,” it said in a
statement. “However, we recognize that there was some market resistance to the
perceived relative price of Zaltrap in the U.S. — especially in light of low
awareness of Zaltrap in the U.S. market. As such, we are taking immediate
action across the U.S. oncology community to reduce the net cost of Zaltrap.”
The move was first reported on Thursday by The Cancer Letter, a
newsletter about cancer issues.
Sanofi said it would not change the official price for
Zaltrap but would offer discounts of about 50 percent. Zaltrap, which is given
intravenously, is not bought directly by patients but is sold to doctors or
hospitals, which administer it. The cost is then reimbursed by Medicare or private
insurers. Patients could be liable for a co-payment.
Dr. Leonard B. Saltz, chief of gastrointestinal
oncology at Sloan-Kettering and one of the authors of the Op-Ed article, said
Sanofi’s offer of discounts “doesn’t really address the problem from our
perspective” because Medicare reimbursement and patient co-payments would still
be based on the higher list price, at least for several more months.
Also, he said, the discounts could give doctors and
hospitals an incentive to use Zaltrap because they could profit from the
difference between the discounted price they pay for the drug and the higher
price at which they are reimbursed by insurers.
Dr. Saltz said even at the lower price, he did not foresee
Sloan-Kettering doctors using Zaltrap because it was no better than Avastin and
might be more toxic.
Dr. Saltz is now a consultant to Genentech and has been
one to Sanofi.
Zaltrap, developed by Sanofi and Regeneron
Pharmaceuticals, a biotechnology company in Tarrytown, N.Y., was approved by
the Food and Drug Administration in August for use as a second-line treatment
for colorectal cancer, meaning after an initial regimen had stopped working.
Like Avastin, Zaltrap impedes the formation of blood vessels that nourish
cancer cells.
Dr. Peter B. Bach, director of the Center for Health
Policy and Outcomes at Sloan-Kettering and one of the authors of the Op-Ed
piece, said the price of Zaltrap reflected a bigger problem — that over all
there was little relation between drug prices and the value they provided.
“Normal markets wouldn’t behave like this,” he said on
Thursday. “You couldn’t introduce something twice as expensive and no better
and still sell it.”
Dr. Lee Newcomer, senior vice president for oncology at
UnitedHealthcare, said it was the first time he could recall a company cutting
the price of a cancer drug so much. “It was the first time physicians have
stood up and said, “Enough is enough,’ ” he said. “And I think that was a
watershed moment.”
Drs. Peter B. Bach,
Leonard B. Saltz, and Robert E Wittes publicized the center’s position, urging other
physicians to exercise their professional responsibility by choosing the medicines
they prescribe with full consideration to the clinical value and cost burden for
patients.