Transcript Document

Expensive New Drugs:
Are They Worth It?
David Orentlicher, MD, JD
Indiana University Schools of Law and Medicine
Indiana House of Representatives
October 29, 2008
(With thanks to Paul R. Helft, MD
Indiana University School of Medicine)
Cancer drugs as an area of concern

Cancer treatment in the US cost $72.1 billion in
2004
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Just under 5% of the total US spending on medical
care
1995-2004, overall costs of treating cancer rose
by 75%
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These costs are expected to rise faster than the rate
of overall medical expenditures in the future
NCI, The Nation’s Progress in Cancer Research: An annual report for 2004
Cost of treatment for metastatic colon
cancer
(Schrag D. NEJM. 2004;351:317-319)
Can we afford these drugs?

Avastin (monoclonal antibody to block blood vessel
growth) = $4,000-$9,000/month
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Erbitux (monoclonal antibody to block cell growth) =
$17,000/month
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For treating non-Hodgkin’s lymphoma
SIR-Spheres (radioactive microspheres) = $14,000/dose,
with an overall cost = $150,000?
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For treating metastatic colon cancer; also head and neck cancer
Zevalin (monoclonal antibody that binds a radioactive
isotope) = $24,000/month
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For treating metastatic colon cancer; also lung and breast cancer
For treating liver metastases from colon cancer
Depends on their benefit—commonly measured in
QALYs
What is a QALY?
Major
stroke
0
1
Perfect
health
Dead
Recurrent
stroke
Writing a grant
proposal
What’s a “good” buy?
•“Expensive”
more than $100,000/QALY
•“Reasonable”
$50,000/QALY
•“Very Efficient”
less than $25,000/QALY
Most writers use $50-100,000 as upper limit of
good value, but public preferences suggest upper
limit over $200,000.
Hirth RA, et al., Medical Decision Making. 2000;20:332-342
Some sample QALYs (2002 dollars)
Harvard Public Health Review (Fall 2004)
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< $0 (If the cost per QALY is less than zero, the intervention actually saves
money)
Flu vaccine for the elderly
Under $10,000
Beta-blocker drugs post-heart attack in high-risk patients
$10,000 to $20,000
Combination antiretroviral therapy for certain patients infected with the AIDS virus
$15,000 to $20,000
Colonoscopy every five to 10 years for women age 50 and up
$20,000 to $50,000
Antihypertensive medications in adults age 35-64 with high blood pressure but no
coronary heart disease
Lung transplant in UK (Anyanwu AC et al. J Thorac Cardiovasc Surg 2002;123:411-420)
$50,000-$100,000
Dialysis for patients with end-stage kidney disease
Antibiotic prophylaxis during dental procedures for persons at moderate to high risk
of bacterial endocarditis ($88,000) (Med Decis Making. 2005;25(3):308-20)
Over $500,000
CT and MRI scans for children with headache and an intermediate risk of brain
tumor
COST/QALY: Selected Medicare services
Condition/Treatment
Cost per QALY
Treatment for Erectile Dysfunction
$6,400/QALY
*Physician Counseling for Smoking
$7,200/QALY
Total Hip Replacement
$9,900/QALY
*Outreach for Flu and Pneumonia
$13,000/QALY
Treatment of Major Depression
$20,000/QALY
Gastric Bypass Surgery
$20,000/QALY
Treatment for Osteoporosis
$38,000/QALY
*Screening For Colon Cancer
$40,000/QALY
Implantable Cardioverter Defibrillator
$75,000/QALY
Lung-Volume Reduction Surgery
$98,000/QALY
Tight Control of Diabetes
$154,000/QALY
*Treating Elevated Cholesterol ( + 1 risk factor)
$200,000/QALY
Resuscitation After Cardiac Arrest
$270,000/QALY
Left Ventricular Assist Device
$900,000/QALY
The example of bevacizumab (Avastin)
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2007 sales of $2.3 billion in US ($3.5
billion worldwide) to treat about 100,000
patients with advanced lung, colon or
breast cancer
Genentech price: $4,000-$9,000 a month
Cost to private insurers: As high as
$35,000 a month
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NY Times, July 6, 2008
What’s the benefit?
Phase III trial of bevacizumab in metastatic colon cancer
100
• Median survival: 15.6 vs 20.3 mo (HR=0.66, P<0.001)
• Error bars represent 95% confidence intervals
Percent surviving
80
Median survival benefit:
4.7 months or 30% increase
60
40
Treatment Group
20
IFL + placebo (n=411)
IFL + Avastin (n=402)
0
0
6
12
18
Duration of survival (mo)
Hurwitz H, et al. N Eng J Med. 2004;350:2335-2342
24
30
Examining the cost and cost-effectiveness of
adding bevacizumab (Avastin) to chemo in
metastatic colon cancer
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Randomized trial compared chemotherapy alone
vs. chemotherapy + bevacizumab
Bevacizumab regimen prolonged median
survival from 15.6 to 20.3 months (p<0.001)
Cost of extra 4.7 months?
$101,500 (assuming $5,000 per month for
bevacizumab)
 $259,149 per year of life gained (not quality
adjusted)
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Examining the cost and cost-effectiveness of
adding bevacizumab (Avastin) to chemo in
advanced non-small cell lung cancer
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Randomized trial compared chemotherapy alone
vs. chemotherapy + bevacizumab
Bevacizumab regimen prolonged median survival
from 10.2 to 12.5 months (p=0.007)
Cost of extra 2.3 months?
$66,270-$80,343
 $345,762 per year of life gained (assuming $66,270
cost)
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Grusenmeyer PA, Gralla RJ. J. Clin. Oncology.
2006;24(18S):6057.
Do oncologists believe bevacizumab
offers good value?
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Survey of 139 academic med oncologists at two
hospitals in Boston
Designed to estimate cost-effectiveness of bevacizumab
(Avastin): what is a justifiable cost-effectiveness amount;
does the drug provide “good value”; ?
Mean implied cost-effectiveness threshold for
bevacizumab was $320,000/QALY
Only 25 percent of the oncologists thought
bevacizumab provides a good value
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Nadler E, Eckert B, Neumann PJ. The Oncologist 2006;11:90-95
Studies of patients’ attitudes toward
expensive cancer drugs and their benefits
Is it cost-effective to add erlotinib to
gemcitabine in advanced pancreatic cancer?
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Cost effectiveness analysis of erlotinib (Tarceva) in
pancreatic cancer
Study enrolled 569 patients and compared
gemcitabine alone versus gemcitabine plus erlotinib
Median survival improved from 6.0 to 6.4 months
Cost of extra 0.4 months?
Erlotinib adds $16,613 retail for six months or
 $498,379 per year of life gained ($332,252 per year of
life gained for a 4 month course of therapy)
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Grubbs SS et al., J. Clin. Oncology. 2006;24(18S):6048
Cost-effectiveness analysis of trastuzumab
(Herceptin) in the adjuvant setting for
treatment of HER2+ breast cancer
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Trastuzumab (a monoclonal antibody) associated
with a 52% reduction in disease recurrence and
33% reduction in death.
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Romond EH, et al. NEJM. 2005;353:1673-1684.
Over a lifetime, cost per QALY $27,800 (range
$18-39,000)
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Garrison LP et al. J Clin Oncology. 2006;24(18S):6023
Expensive new drugs and the poor
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Cost pressures are similar for privately insured and
publicly insured (or uninsured), but the pressures
are accentuated with the poor
Program and personal budgets are tighter
 Trade-offs are more tangible—when a state’s Medicaid
budget rises, spending on other public services (e.g.,
schools) may decline, and this can pit poor against
other taxpayers
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Wishard Memorial Hospital
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More than 22,000 admissions per year
10% of patients are commercially insured;
approximately 36% are uninsured by any source.
Pharmacy budget at WMH was around $18 million
(2005)
855 metastatic colon cancer patients receiving
FOLFOX + bevacizumab cost entire Wishard
pharmacy budget
500 stage II and III patients receiving adjuvant
FOLFOX alone cost entire pharmacy budget
(Actual number of colon cancer patients at Wishard in the dozens
per year; numbers above are less than in Indiana overall)
Growth in Medicaid spending
(Medicaid expenditures as percentage
of total state spending)
1987
1997
2007
Iowa
Indiana
Ohio
Illinois
New York
5.0
10.7
10.6
10.1
16.6
13.4
17.6
20.8
23.7
33.4
16.7
21.4
25.9
28.4
28.7
All States
9.8
20.0
21.1
Medicaid expenditures ($ billions) for
outpatient prescription drugs
30
25
20
15
10
5
0
1991
1993
1995
1997
1999
2001
In 2003, Medicaid spent $33.7 billion on drugs (19% of national
spending for drugs and more than 10% of the Medicaid budget).
What drives increased spending on
pharmaceuticals?
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Number of prescriptions dispensed (42%)
more beneficiaries
 more medications per beneficiary
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Types of prescriptions (34%)
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newer, higher-priced drugs replacing older, lessexpensive drugs
Manufacturer price increases for existing drugs
(25%)
Prescription drug trends. October 2004; http://www.kff.org/rxdrugs/upload/Prescription-DrugTrends-October-2004-UPDATE.pdf
Is increased spending on drugs bad?
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Prescription drugs can treat—or prevent—serious
illnesses
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But there is considerable over-prescribing—many
people receive
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consider, for example, statins to lower cholesterol and the
risk of heart attacks, insulin to control blood sugar
prescriptions when they don’t need a drug (e.g., Ritalin)
a brand-name drug when a generic could be taken,
an expensive drug when a less expensive alternative would
work as well (e.g., Nexium for heartburn), or
a very expensive drug that provides little benefit (? Avastin)
Covering very expensive drugs may be done for only
some, and at the same time divert limited funds from
more effective health care, particularly for the poor
Expensive new drugs and the poor
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Difficult to protect the poor when it’s only the
poor whose interests are at stake
Political decisions driven by interest group advocacy,
and the poor often fare poorly in such a system (but
sometimes their interests coincide with those of more
effective advocates—see formulary restrictions)
 Need to link the fortunes of the poor to those of
others (Medicaid versus Medicare) and need other
systemic reforms to address the wasteful spending
problems
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Successful health care reform

Social welfare programs fare better when
 Universal
rather than targeted just at poor
(Medicare vs. Medicaid)
 Perceived as earned (Medicare Part A, EITC)
 Beneficiaries are “innocent” persons (Medicare,
SCHIP)
 Benefit levels determined by federal rather than
state government (Medicare vs. Medicaid)
 Benefits can be limited easily (food and shelter vs.
health care)
Systemic reform: reduce over-prescribing
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Important social pressures
The identifiable victim versus saving statistical lives (low
osmolar contrast media and the Canadian experience)
 Physician relationships with industry (consulting fees
for opinion leaders)
 Physician reimbursement (cancer chemotherapy)
 Patient desire for a prescription (direct-to-consumer
advertising and cyclyooxygenase-2-inhibitors (coxibs)
for arthritis (e.g., Vioxx))
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Counter-regulation is critical (e.g., preferred drug
lists), but some regulations cause more harm than
good (e.g., prescription caps)