How to Lower Cancer Care’s Costs

May 27, 2011

A year-and-a-half ago, Howard Brody of the University of Texas Medical Branch in Galveston wrote an opinion article in the New England Journal of Medicine calling on every medical specialty to develop ways of cutting the cost of care. Citing financial sacrifices that had been made by insurers, hospitals, drug and device companies in the then pending health care reform bill, Brody said physicians could do their part “if they were willing to practice more in accordance with evidence-based guidelines and to study more seriously the data on regional practice variations.”

Toward that end, he called on each specialty to come up with a list that “would consist of five diagnostic tests or treatments that are very commonly ordered by members of that specialty, that are among the most expensive services provided, and that have been shown by the currently available evidence not to provide any meaningful benefit to at least some major categories of patients for whom they are commonly ordered.”

In yesterday’s NEJM, two oncology specialists — Thomas Smith and Bruce Hilner of Virginia Commonwealth University — took up the challenge. They created a “top five” list of common oncology practices, which, if limited to situations where they were truly clinically useful, would sharply lower the cost of cancer care. Their lead paragraph noted the need for taking these steps:

Annual direct costs for cancer care are projected to rise — from $104 billion in 2006 to over $173 billion in 2020 and beyond. This increase has been driven by a dramatic rise in both the cost of therapy and the extent of care. In the United States, the sales of anticancer drugs are now second only to those of drugs for heart disease, and 70% of these sales come from products introduced in the past 10 years. Most new molecules are priced at $5,000 per month or more, and in many cases the cost-effectiveness ratios far exceed commonly accepted thresholds. This trend is not sustainable.

Look closely at the second to last sentence of that paragraph: “In many cases the cost-effectiveness ratios far exceed commonly accepted thresholds.”  It’s worth noting that there are no commonly accepted thresholds for cost of care in the U.S. That’s not true in Great Britain, where the National Health Service, based on recommendations from the National Institute for Clinical Excellence, will refuse to pay for certain drugs when their costs exceed certain levels. But in the U.S., Medicare, which is the primary payer for most cancer care since cancer is primarily a disease of aging, is forbidden by law from taking cost into consideration. If the Food and Drug Administration has approved a specific approach, and the doctor prescribes it, Medicare will pay for it. If the oncologist tries an approach that is not specifically approved by the FDA — either as an “off label” use or combination of approved drugs — the Centers for Medicare and Medicaid Services will still pay for the treatments long as the approach is listed in clinical practice guidelines. And when it comes to most testing and imaging, most insurers including Medicare will pay for whatever the doctor orders, even though the medical literature is loaded with studies suggesting their lack of usefulness in many situations where commonly used.

That’s why oncologists themselves have to take this issue on. Here’s their top five list of new rules for controlling the cost of cancer care:

  1. Only use testing and imaging where “benefit has been shown”;
  2. Limit second-line and third-line treatments to metastatic cancer to sequential monotherapies for most solid tumors. “Patients will live just as long but will avoid toxic effects. . . Society will benefit from cost reductions associated with less chemotherapy, fewer supportive drugs, and fewer toxicity-associated hospitalizations”‘;
  3. Don’t give chemotherapy to people when their cancer has made them so weak that a positive response is highly unlikely;
  4. Lower chemo doses to eliminate the routine use of drugs that replace the white blood cells destroyed by toxic chemo drugs; and
  5. Stop treating patients if they haven’t responded to three different drug regimens — unless they are enrolled in a clinical trial actually testing the fourth regimen.

They also came up with a list of five changes in physician and patient attitudes that must take place to cut the cost of care, ranging from support for end-of-life counseling to more support for hospice and palliative care. “We understand that this will be extraordinarily difficult, since one person’s cost constraint is another person’s perceived lifesaving benefit and yet another’s income,” the two authors write. However, “there really is no other way. Our intention is to encourage other specialties to do the same and flatten the cost curve so that patients can continue to get the best new therapies.”

Now, here’s my top five list of how the editorial page of the Wall Street Journal will respond to this call for rationing based on science and common sense:

  1. It’s rationing that abrogates physician autonomy;
  2. It’s rationing that prevents individual choice in evaluating the trade-offs between benefits and risks;
  3. It’s rationing that denies very ill patients hope;
  4. It’s rationing that puts cost ahead of best practices; and
  5. Did I mention that it’s rationing?

And as far as end-of-life counseling is concerned, we’ve already heard right-wing politicians crying “death panels.”

I congratulate Smith and Hilner for taking on the Brody challenge. But there was one other issue I wish they had addressed. Why are cancer drugs of marginal efficacy so expensive? Why does a drug that extends life by a month or two cost $5,000 to $10,000 a month for the last year or two of a person’s life, thus adding up to a quarter million dollars to the cost of end-of-life care?

One could write a book about why there’s no economic justification for these sky-high prices (See this one, for instance). Last year, two Sloan Kettering researchers, writing in Health Affairs, proposed pricing new cancer drugs at the medical value they deliver — so-called reference pricing. I wrote about it here.

There’s a lot that oncologists can do to reduce the cost of care through eliminating unnecessary tests, images and treatments. But they should also begin raising their voices when they see drug companies charging an arm and a leg for products that they know, better than anyone else, really aren’t worth the money.

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8 Responses to How to Lower Cancer Care’s Costs

  1. Elaine Denny on May 27, 2011 at 7:51 am

    You are right that NICE does have a threshhold in the UK, generally £30000 per qaly, but following immense pressure from physicians and patient groups this was raised for end of life drugs, which basically means cancer drugs which extend life for very short periods.This privileging of cancer drugs was further enhanced by the current government’s ring fenced £200,000,000 cancer drug fund over 3 years. It distorts clinical decision making and often makes the end of life unbearable but the technological imperative is unstoppable. At the same time people wait for radiotherapy which is not subject to the same cash injection.

    Prof. Elaine Denny
    Professor of Health Sociology
    Centre for Health and Social Care Research
    Faculty of Health
    Birmingham City University
    Westbourne Rd
    Birmingham B15 3TN
    +44 (0)121 331 6035

  2. Dr. Rick Lippin on May 27, 2011 at 9:02 am



    As I have said repeatedly we will grow up as a medical profession AND as a culture if and when we deal forthrightly with death and dying in America.

    Of course we need to ration -ethically and always with compassion.

    Also we NEED ethical and compassionate interdisplinary “death with dignity panals”

    US citizens deserve as dignified and as pain free death as we can possibly provide.

    Thank you for your excellent Blog

    Dr. Rick Lippin

  3. Greg Pawelski on May 27, 2011 at 12:00 pm

    The challenge facing pharmacogenetics – the study of genetically determined variations in responses to drugs in humans – is the number and complexity of interactions a drug has with biological molecules in the body. Variations in many different molecules may influence how someone responds to a medicine. There is a great degree of variation in how people absorb drugs. Individuals have different levels of enzymes in the intestines and liver that breaks down drugs before they even have the chance to get into the bloodstream.

    Teasing out the genetic patterns associated with particular drug responses could involve some intricate and time-consuming scientific detective work. Unfortunately, the introduction of these new drugs has not been accompanied by specific predictive tests allowing for a rational and economical use of the drugs. However, there are a number of laboratory tests that are better able to predict the ability of targeted drugs, to produce positive clinical responders (outcomes). To exploit the full potential of targeted anticancer therapies, physicians need laboratory tests that actually match patients to specific drugs.

    No pharmaceutical company relishes turning over sizeable pieces of profitable business because a diagnostic test suggests it should. An article in, Drew Fromkin, CEO of Clinical Data warned us that drug makers must drive growth, revenue, and profitability, and personalized medicine runs against their prevailing business model. But many realized that personalized treatments were inevitable and tried to find their way within a new paradigm.

    In cancer medicine, that new paradigm established a requirement of a companion diagnostic as a condition for approval of these new targeted therapies. However, it put such great pressure that the companion diagnostics that were approved often had been mostly or totally ineffective at identifying clinical responders to the various therapies. That is because genomics are far too limited in scope to encompass the vagaries and complexities of human cancer biology.

    However, Fromkin believed that the impetus for personalized medicine would come from payors, not drug firms. Insurers were paying for drugs that do not provide value, and have been desperate to eliminate the shotgun approach to cancner medicine. But how would drug companies respond when these tests show their drug to be highly effective, but only in 11% of the potential patient population? What can medicine offer patients whose test results suggest no medicine will help?

    A $1.5-billion-a-year drug is a blockbuster. Five $300-million drugs, taken together, do not add up. Unless the costs for developing a $300-million new chemical entity can be harmonized with the expected financial return, no one will develop such drugs. Charging significantly more for targeted therapies will work only to a point.

    Unfortunately, the introduction of these new drugs has not been accompanied by effective genetic predictive tests allowing for a rational and economical use of the drugs. Pharmacogenetics is not going to transform the market any time soon. However, given the technical and conceptual advantages of Oncologic In Vitro Chemoresponse Assays, together with their performance and the modest efficacy of therapy prediction based on analysis of genome expression, there is reason for a renewal in the interest for these pre-tests for optimized use of medical treatment of malignant disease.

  4. Ann Fonfa on May 28, 2011 at 7:43 am

    As a patient advocate, I would LOVE to see the conversation begin to include natural products. There is growing EVIDENCE that many enhance the activity of conventional treatments, especially chemo. Thus we could use LESS (or is that UnAmerican?), causing LESS toxicity or adverse effects. (I never refer to them as ‘side’ (sic) effects, that’s a marketing term that dismisses our real issues).

    Our website http://www.annieappleseed has collected some of these studies for YEARS! What is wrong with us, that we only accept BIG Pharma or BIG Hospital approaches to our own treatment, survival and health?
    How much evidence does it take to persuade us that nontoxic spices,herbs, and other such regimens are beneficial? After 19 years on this circuit, I have seen too much and too little attention paid.

  5. BhatanyReport on May 29, 2011 at 9:35 am

    Just for your information “reference pricing” in pharmaceutical economics refers to paying the same price for all drugs in the same class above which a co-pay is charged to the patient. This is used in some Canadian provinces because outpatient drugs are not part of Canadian Medicare costs.

    Paying more for more “clinically valuable” drugs is called value-based purchasing. The UK is switching to this system and I believe France currently pays more for more therapeutically innovative drugs.

  6. Dr.Rick Lippin on May 30, 2011 at 10:11 am

    PS to my comment.

    Also the professional oncology community needs a mega-dose of humility.

    Dr. Rick Lippin

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