Value is the price an object will bring in an open and competitive, or free, market as determined by the consumer. To put the definition of value in simpler terms, Warren Buffet has been quoted as saying, “Cost is what you pay, value is what you get.” The oncology market is not entirely free and open. Market price is determined by the manufacturer, entry into the market is regulated by the FDA, purchasers (like the VA and the Centers for Medicare and Medicaid Services) have only limited ability to negotiate prices, and refusing to pay for life-saving or life-prolonging medications often is not an option. As costs for oncology drugs rapidly increase, the cost-benefit ratio, or value, is being increasingly debated. When comparing the clinical benefits these agents provide with cost, the perception of value is highly subjective and can change significantly based on who is paying the bill.
Questioning High-Cost Drugs
Charles Moertel and colleagues published a landmark trial 25 years ago, which reported that treatment with fluorouracil and levamisole for 1 year decreased the death rate of patients with stage C (stage III) colon cancer by 33% following curative surgery.7 Although this trial was clinically significant, there was as much discussion about the high cost of levamisole (Ergamisol) tablets as there
was about its clinical benefit for patients.
In a 1991 letter to the New England Journal of Medicine, Rossof and colleagues questioned the high cost of the levamisole in the treatment regimen.8 Rossof and colleagues were surprised at the drug’s price on approval, about $5 for each tablet, and detailed their concerns on how this price was determined. “On the basis of the cost to a veterinarian, the calculated cost of a hypothetical 50-mg tablet should be in the range of 3 to 6 cents,” they argued. The total cost to the patient of 1 year of treament was nearly $1,200. Their conclusion was that “…the price chosen for the new American consumer is far too high and requires justification by the manufacturer.”
A reply from Janssen Pharmaceutica, the drug’s manufacturer, offered many justifications for the price.8 According to the company, Ergamisol was supplied free to 5,000 research patients prior to FDA approval. It was also given for free to indigent patients. The company also insisted that its pricing compared favorably with its competitors, such as zidovudine, octreotide, newer generation nonsteroidal anti-inflammatories, and antihypertension drugs. “Drug pricing includes additional expensive research, physician education, compassionate use programs, and ensuring high-quality control. Janssen scientists studied immunomodulating effect of Ergamisol for 25 years with no financial return. Drug development is high-risk, so companies must be able to derive a reasonable return on sales.”8
The cost of levamisole was $1,200 per year in 1991, and after adjustment for inflation would cost about $1,988 in 2015, or $166 per month. If these prices caused outrage in 1990, it is easy to see how current prices of well over $10,000 per month for therapies, which often render small clinical benefits, can seem outrageous by comparison.
Public Debate Over Cancer Drug Prices
In the U.S., about 1.66 million patients will be diagnosed with cancer in 2015.9 Although about 30% to 40% of these patients will be effectively cured, only 3% to 4% will be cured using pharmacotherapy (usually traditional chemotherapy) as a sole modality. Therefore, the use of oncology drugs by the vast majority of cancer patients is not to cure but to control or palliate patients with advanced cancer. It is important to note that the cost of most curative regimens is cheap compared with many medications used for advanced disease. Until a few years ago, discussion of the high costs of cancer treatment was rarely made public due to the devastating nature of cancer. However, with the rapid price increases and relatively disappointing clinical benefits of the many new drugs entering the market, the question of value can no longer be ignored. Many authors havepresented commentaries and strategies addressing the issues
surrounding the high cost of cancer drugs.10-15
It was a groundbreaking 2012 letter to the New York Times that brought the issue to public attention.16 Dr. Peter Bach and his colleagues at Memorial Sloan Kettering Cancer Center announced they would not purchase a “phenomenally expensive new cancer drug” for their patients, calling their decision a no-brainer. The drug, ziv-afilbercept (Zaltrap), was twice the price of a similar drug, bevacizumab (Avastin), but was no more efficacious in the treatment of metastatic colorectal cancer. Bach and colleagues went on to say how high drug prices are having a potentially devastating financial impact on patients and that laws protect drug manufacturers to set drug prices at what they feel the market will bear.