• The buck stops at Memorial Sloan-Kettering Cancer Center

    Peter Bach, Leonard Saltz, and Robert Wittes write in an NYT op-ed,

    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.

    The authors also argue that we must consider patients’ out-of-pocket costs, which can be substantial, even for the insured. What’s interesting here is that organizations that are ostensibly in the business of managing health spending, public and private insurers, do not make coverage decisions consistent with that role. The buck has to stop somewhere, if not with insurers and patients, then with providers. Sloan-Kettering just accepted the burden.

    @afrakt

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    • I just finished reading Mann/Ornstein’s “It’s Even Worse Than It Looks…” which is the authors second book on dysfunction in Congress. But we need to remember that concerns about the pharmaceutical industry go back, as far as I know, to the Kefauver hearings in the late 50s or early 60s. At least in those days, a few members of Congress could muster sufficient spine to try and protect the American people.

    • What’s fascinating is that neither drug cited in the article, Zaltrap and Avastin, is particularly effective. Both provide a median of only1.4 months improved survival.

      The “bargain” drug in this case costs about $6000/month and offers the same meager 1.4 month’s benefit. That’s a bargain?

      The problem is that neither drug does much for patients with metastatic disease and the real question is whether any system can afford paying so much for so little benefit. That said, any person could pay out of pocket for such treatment if they wish.

    • I’m afraid that the real reason this drug isn’t being used at MSK is that it isn’t very good relative to alternative options, not that it costs too much. This makes it an easy place to stand up on a soapbox and decry high cost products. What about extremely expensive oncology drugs that actually do work (e.g., Xalkori)?

      Pharmaceuticals only represent 10% of overall healthcare spending (http://www.kaiseredu.org/issue-modules/us-health-care-costs/background-brief.aspx#How is the U.S. health care dollar spent?) but seem to get an outsize focus as a way to “fix” our helathcare spending problem. I think this is because the prices are more transparent than they are for hospital care or MD services. Unfortunately, solving the problem with our pharmaceutical spending isn’t going to do all that much to fix the overarching healthcare spending problems. Furthermore, the dollars we spend on drugs are at least backed by a modicum of rigorously designed effecitveness research (although not all drugs produce clear value). But that is still more than can be said for most of the other ways we use our healthcare dollars.