In his more than 35 years of practice, Dr. Lowell Schnipper has seen a lot of women die from breast cancer. A patient’s options start to dwindle by the time tumor cells set up outposts in the bones, lungs, and other organs, defying all attempts to keep them under control. But in June, when the government approved Perjeta, Schnipper had something new to offer. The drug is one of an innovative class of drugs known as “targeted therapies.”
As the chief of oncology at Beth Israel Deaconess Medical Center in Boston, Schnipper knew Perjeta was not a cure: added to a standard treatment with Herceptin—another targeted therapy that was hailed as a breakthrough in 1998—Perjeta gives the average woman only about six months more of calm before her disease starts to stir again. Given the limited benefit, the price was startling. For most women, a full course of the drug combination will cost $188,000—enough, he says, “to give anybody a cold sweat.”
Americans spent more than $23 billion last year for cancer drugs, more than we paid for prescriptions to treat anything else. But many oncologists are starting to question what we are getting in return for that bill, whether the war on cancer has become too much of a race to produce the next blockbuster. “In general, progress for cancer has been halting and slow,” says David Howard of the Department of Health Policy and Management at Emory University. So far, most new drugs offer only marginal extensions of life and few cures. Howard says new so-called breakthroughs “overpromise and underdeliver.” Consider the popularity of Avastin, a targeted drug approved for metastatic colon cancer in 2004. A recent study found that almost 70 percent of patients on chemotherapy were receiving Avastin within a year of its release. In clinical trials, the drug increased survival by about five months. The cost? About $10,000 a month.
Treating cancer has never been cheap, but today, the price of each new treatment seems to outpace the one before, with little bearing on its efficacy. According to figures from insurer United Healthcare, a standard cocktail of drugs for treating lung cancer used to run about $1,000 a month. Today’s regimens cost from more than $6,000 to almost $10,000—for about two more months of life. “There is no such thing as a cancer drug coming on the market that is some sort of regular drug price,” says Dr. Peter Bach of Memorial Sloan-Kettering Cancer Center in New York, who studies the impact of cancer costs on U.S. health care. “They’re all priced at spectacularly high levels.” Which leads to an unsettling question: how much is a little more time worth? Would you spend $50,000 for four more months? How about $15,000 for two weeks?
Of three frontiers in cancer treatment, targeted therapies like Perjeta are widely seen as the best hope for a cure. Traditional chemotherapy is notorious for side effects because it wields destruction indiscriminately throughout the body. Targeted therapies are designed to hit cancer cells only. Perjeta, for example, targets a protein produced in excess amounts in some breast cancers; Avastin hinders the ability of a tumor to form new blood vessels to feed itself.
Doctors envision the day when every patient will have therapy precisely matched to the genetic bull’s-eyes of their own cancers. The holdup has been that cancer has proven to be more genetically crafty than researchers once imagined. Scientists may build a drug to hit one target, but a tumor may also employ lots of yet-undiscovered genetic tricks to keep itself alive. Instead of a magic bullet, scientists now know that any particular tumor may need lots of magic bullets. With so many targets unknown, a lot of patients end up getting drugs that barely touch their cancers, which is why the effectiveness of many new drugs remains underwhelming.
Not that this keeps a drug from becoming a blockbuster. Patients with advanced cancer, and their physicians, are hungry for progress. As a result, almost all of the 10 bestselling cancer drugs are targeted therapies, many less than a decade old. All came on the market at thousands of dollars a month, a trend that continues today with gusto. The drug Afinitor, a daily pill, was approved in July for patients with breast cancer. It costs more than $200 a tablet. But price rarely matters to patients or even doctors, says Dr. Oliver Sartor, medical director of the Tulane Cancer Center in New Orleans. “People have already been told there is no cure for their disease,” he says. “Every increment, every improvement, gives hope, and when options are extremely limited, we all focus on the positive possibilities.”
In addition to targeted therapies, drugs have come on the market that can spur the body’s own immune cells to lead the charge. Significant hurdles have hindered this kind of treatment for years. But they are finally being overcome. The prostate cancer drug Provenge, which came on the market in 2010, was the first immune-therapy drug to gain governmental approval. It was followed the next year by Yervoy, when approved the only drug ever shown to extend survival in advanced melanoma. Men with a common kind of advanced prostate cancer who used Provenge lived an average of four months longer than the comparison group; patients on Yervoy got an average of 3.6 months. The gains are modest, but not the cost. When Sartor learned Provenge would run $93,000 per patient, “I was stunned,” he says. And even that was cheaper than Yervoy, which appeared the following year at $120,000 for four injections. He predicts the pricing of immune therapies may be seen as “a watershed moment” in the debate over health-care costs.
The third area of touted breakthroughs has been in radiation, most recently by using protons instead of traditional X-rays to kill cancer cells. It’s a controversial undertaking: many doctors believe that protons offer better precision, able to get rid of tumors without collateral damage to nearby healthy tissues. But whether protons can treat with fewer side effects than traditional radiation is, to date, a matter of debate for almost all but pediatric and certain neurological tumors.
As with new drugs, proton-beam radiation is expensive—it can run roughly twice as much as the current state-of-the-art form of radiation that uses X-rays. In the case of proton beams, much of the cost has to do with building a cyclotron to harvest the protons—a construction project that can cost upwards of $150 million. In 2001 just three centers in the country offered proton treatment, but that number is now up to 10, with a half dozen more planned. About three quarters of the proton patient population covered by Medicare are men with prostate cancer, which, because of the length of their therapy, are the most lucrative to treat.
Why do new drugs cost so much? Pharmaceutical companies say it’s payment for scientific creativity, that high prices are necessary to recover the expense of developing and manufacturing their products and to encourage more research. A spokeswoman for Bristol-Myers Squibb, which makes Yervoy, says the cost of drugs is “based on a number of factors, including the value they deliver to patients, the scientific innovation they represent, and the cost to develop them.” Part of the price is also an investment in drug discovery. “We look at not only the past research and development, but development in the future,” says Krysta Pellegrino, a spokeswoman for Genentech, which developed Perjeta.
That said, many cancer experts remain skeptical of the notion that drug companies are simply passing along the cost of doing business and funding the incubation of new drugs. In 2004 researchers tried to test the relationship between a drug’s development and its final asking price. In the Journal of Clinical Oncology, the scientists concluded “that the drug companies are not pricing their drugs to recuperate losses associated with research and development, marketing, and operating prices, but rather [the average wholesale price] depends on what the market itself can bear.”
“It’s a marketplace where the seller has all of the control,” says Bach, from Memorial Sloan-Kettering, because private insurance companies and Medicare—the largest purchasers of drugs—are powerless to bargain for a less expensive deal. “Prices are high because they can be,” Bach says. As one doctor observed, “we are always paying for a Ferrari but often getting a Ford.” The occasional Ferrari does exist. The targeted drug Gleevec, which treats certain forms of leukemia and intestinal tumors, has allowed patients to live for years with their cancer in check.
But while the track record for some new treatments is expected to improve, Dr. Otis Brawley, chief medical and scientific officer of the American Cancer Society, says that in most cases, “new cancer treatments cost an awful lot of money, and there is usually a very small incremental benefit.” Brawley, author of How We Do Harm: A Doctor Breaks Ranks About Being Sick in America, likes to cite the case of Tarceva, a targeted therapy approved for pancreatic cancer in 2005 to piggyback on the traditional drug gemcitabine. “The median survival of Tarceva and gemcitabine compared to gemcita-bine alone was 14 to 16 days greater. Seven months versus seven and a half months.” A 2007 analysis in the Journal of Clinical Oncology determined that those extra days add around $15,000 to the cost of care. “Instead of talking about rationing care,” Brawley says, “we need to talk about rational use of care.”
If new cancer treatments continue to push the boundaries of affordability, Americans will eventually be forced into dilemmas we have largely postponed. Innovative cancer treatments, says Emory’s Howard, “really symbolize the tradeoff that we face between improving health and saving money. At some point, society—including employers, the government, patients, and clinicians—have to make a tradeoff. I think if these drugs cured the disease, which none of them do, then no one would be questioning these prices. But we are seeing very high cost for relatively little return in patient benefit and survival.”
Other countries already consider a treatment’s effectiveness in national discussions about whether to pay for it. For example, this summer in Israel, a panel of radiation oncologists advised the Israeli Ministry of Health that, because of the unproven benefits, spending public money on proton-beam treatment is not yet warranted. “We can’t say it is a justifiable expense,” says Dr. Abraham Kuten, director of oncology at Rambam Medical Center in Haifa. The United Kingdom affirmed in July, for the second time, that it will not cover Avastin for advanced breast cancer. Australia, which has one of the world’s highest incidences of melanoma, decided in March that the benefits of Yervoy are not worth the cost to the country’s national health-care system; it based its decision on an independent government advisory committee, which cited the questionable benefit to patients and the drug’s “uncertain clinical place in therapy.”
Then there is the United States, where wider access to drugs may be one of the reasons our cancer survival times rank among the highest worldwide. But the question is how long we can afford what we’re getting. “I think we are the only industrialized country that doesn’t look at the cost balanced somehow with effectiveness in making decisions about drugs,” says Dr. Thomas Smith of the Sidney Kimmel Comprehensive Cancer Center in Baltimore. “What we have now are a bunch of blockbuster-ette drugs that give a little bit of benefit. If you’re that person, it could be a really big benefit to have three extra months before your disease starts growing again, but as a society we simply can’t pay for that for everybody.”
Yet aside from academics and insurance-company executives, few Americans are willing to consider the price of time, says Dr. Lee Newcomer, senior vice president for oncology at United Healthcare. This means that the government sinks further into debt, and insurance companies keep raising premiums to keep up. “If we’re going to continue to have a sustainable health system, we have to talk about that as a society. In 15 years, you will have to earn the equivalent of a year’s salary today to pay your health-insurance premiums,” he says. “We’re going to have to have the discussion.”
Laura Beil is an independent journalist based in Dallas.
Do you think that the cost of a drug or treatment vs. its survival benefit should be a consideration when deciding whether to cover it under a single-payer health care system? Resource allocation is one of the trickiest ethical areas in medicine, IMO, and I don't have a clear answer for this. I want to say that the cost of a drug or treatment should NEVER be a factor, and that as a society we should just raise taxes or cut funding from other areas to compensate. But at the same time if drug prices keep rising the way they are, we will reach a point where that may no longer be possible.
I also think the government needs to step in and set-up non-profit nationalized pharmaceutical institutions to compete with Big Pharma. These government-owned pharma companies could attract the best and brightest minds in medicine by offering higher salaries and better benefits than private biotech/pharma companies (who treat their employees like shit, generally). Any drugs developed by these government-owned companies would be sold at a reasonable price, and revenues would be used strictly to cover R&D costs. There would be no profit margin needed to line the pockets of executives or shareholders.