Balancing cost: benefit in ‘well treated’ malignancies
Published on 08 Feb 2018
Jeremy Smith discusses the cost:benefit ratio of the rising prices of new oncology treatments and how the pharmaceutical industry and regulators can adequately address them while still promoting R&D.
Oncologists and pharmaceutical companies are increasingly
discussing the cost:benefit ratio of cancer treatments. It is a topic that is
under the microscope, particularly now, with the advent of immunotherapies.
These come with a hefty price tag of approximately $100,000 per patient per
year, compared to carboplatin + paclitaxel, a standard treatment for squamous
cell Non-Small Cell Lung Cancer (NSCLC), which could cost $30,000-$35,000.
Looking at the cost:benefit ratio of these treatments as a
sliding scale, though, it could be argued that immunotherapies may fall more on
the side of benefits (as opposed to cost). Because, although expensive, they
are currently approved in malignancies where survival has been measured in
months, not years, and the side effects during treatment can be less intrusive.
Conversely, many of the newer haematologic malignancy
treatments are equally, if not more, expensive, but they are used to treat
patients in diseases where survival is measured in years, not months.
Nonetheless, and regardless of the type of malignancy, the treatments are
resulting in financial toxicity for patients. So, what happens now? Let’s look
at this debate in more detail.
Immunotherapy results for treating solid tumours
According to Cancer.org, the five-year survival rate for
Stage IV NSCLC patients using traditional chemotherapy is less than 5%.
Comparatively, if a patient is treated with nivolumab (an immunotherapy
marketed as Opdivo), recentlypublished data, at the American Association for
Cancer Research (AACR) annual meeting 2017, show the treatment increasing the
five-year survival rate for Stage IV NSCLC patients from 4% with standard of
care (SOC) chemotherapy to 16% in all-comers (and 43% in patients with > 50%
In addition to the improvement in survival rates,
immunotherapies also produce fewer adverse events, which is likely to lead to
better patient quality of life. This is no small consideration, especially when
all treatment is ultimately only palliative. The benefits of immunotherapy can
be huge – even if the costs are huge too.
If immunotherapy falls on the benefit side of cost:benefit
scale, where should many of the new haematologic malignancy treatments sit?
Unlike some solid tumour patients, many haematologic patients have survival
rates measured in years, not months.
However, many of the newer haematologic malignancy
treatments combine multiple (as many as four) different drugs. And, in a
regimen where there are multiple branded products, this means the costs can be
significantly higher than $100,000 per patient. Finally, not only are multiple
branded medications needed, but the duration of therapy is often longer in
haematologic malignancy treatments than in solid tumour treatments.
Yes, the five-year survival rate for all Multiple Myeloma
patients is 49% – which is nearly three times that of all (not just Stage IV)
NSCLC patients. And longer survival rates are a positive outcome. However, the
treatment costs can be enormous.
Even though many of the new haematologic malignancy
treatments are less expensive individually than immunotherapy agents, they
still come with a hefty price. For example, elotuzumab, for a Multiple Myeloma
patient weighing between 154 and 176 pounds, will cost $142,080 for the first
year and $123,136 for each subsequent year. This is a huge cost in itself. But
keep in mind that these costs are for elotuzumab alone, and the treatment often
needs to be used in combination with lenalidomide and dexamethasone, which adds
an estimated cost of approximately $125,000 per year, bringing the total cost
to $248,136 – $267,080 per patient, per year of treatment.
Elotuzumab increases the four-year progressionfree survival
rate (when added to lenalidimide and dexamethasone) by 7%, from 14% to 21% for
patients with 1-3 prior lines of therapy. However, elotuzumab is given until
treatment progression, which means that those 21% of patients still responding
at four years could end up spending $511,488 for elotuzumab alone.
New treatments in oncology – whether solid or haematologic –
are producing better efficacy and improved tolerability. The benefits are
immense. However, the price tags can lead to huge financial toxicity for
So why are the treatments so expensive and how can the balance be redressed?
According to a 2014 study by the Tufts Center for the Study
of Drug Development (CSDD), the estimated cost to develop a new prescription
drug for marketing in the US is $2.6 billion. Compare this to a much lower
figure of $800 million in 2003. Pharmaceutical companies need to pass their
costs on, so we can see why the end price points to patients have risen.
Pharmaceutical companies also want to develop new drugs and the revenue they
receive from their marketed products is what finances this new drug
Regulators wish to simultaneously reduce costs to patients
while continuing to encourage new drug discovery. It is a tricky problem. While
many people would agree that financial toxicity can be debilitating, how to
correct it is much more complicated.
Back to the cost:benefit ratio. What’s next?
All of these data points and costs are interesting but what
does it all signify, and how should the cost:benefit of new treatments be
Historically, a statistically significant improvement in
progression-free survival, regardless of solid or haematologic malignancy, has
been enough to warrant regulatory approval. However, in June 2015, the American
Society of Clinical Oncology (ASCO) published a proposed framework, which it
subsequently updated in May 2016, to assess the value of various cancer
treatments with the goal of evaluating treatment regimens on the basis of their
clinical benefit, toxicity, and cost.
Despite the fact that there have been no changes in pricing,
reimbursement, or approvals as yet, and costs continue to rise, perhaps the
approval authorities should be looking at different criteria – such as a
certain percentage increase in efficacy (for example quality-adjusted life
years and the value to patients and their families), not just statistical
significance – to justify the higher costs.
As it is, there is anecdotal evidence that patients,
particularly in the US, are already evaluating the cost:benefit of their
prescribed oncology treatments and making their own decisions accordingly. A
recent policy brief published by Rice University’s Baker Institute for Public
Policy cites that the 8-to10-year survival rate for Chronic Myeloid Leukemia
(CML) is 80% in Europe, where treatment is available and affordable to all
patients. In the US, as a comparison, the high drug prices could force many
patients to omit or compromise treatment, which reduces the five-year survival
rate for CML to only 60%.
While most agree that some sort of pricing reform is needed,
the underlying question is how to adequately address the astronomical prices
while still promoting further research and development. And what impact should
the current survival rates have on this evaluation? There is no easy answer,
and these decisions have far-reaching implications. It is certainly something
for everyone to scrutinise particularly as even more personalised treatments
are produced. For example, CAR-T which is now approved and costs between
$373,000 and $475,000 for each patient.
Impact on market research
The market research world often tries to decouple the
financial impact from the clinical strengths and weaknesses of a treatment, in
order to understand the drivers and barriers to use. As costs continue to rise,
this not only becomes more difficult, but possibly also misleading. Even though
oncologists sometimes claim to try not to consider costs when weighing
treatment options, in order to recommend the best option, can they
realistically be expected to ignore the fact that many of these treatments now
cost more than double the average annual salary of their employed patients?
From the perspective of market researchers, in order to
fully understand the likelihood to use one of these costly treatments,
attention should be paid to the impact of cost, and the financial toxicity for
The obvious answer is the inclusion of payers in the
research plan to understand expected pricing, formulary tier, and patient
out-of-pocket costs. However, it is probably not enough to stop there.
Oncologists are becoming more sensitive to cost so reserving
a section of the discussion guide for a cost:benefit evaluation could also be
beneficial. There, it would be possible to understand how oncologists balance
the cost:benefit through a live perceptual mapping exercise and/or an explicit
evaluation of price. For example, it could be beneficial to understand what
percentage of patients would be likely to receive a given treatment at various
price points. (There is a flip side to this, though – one that is
controversial. As it is popular right now to mention costs even though it
appears to currently have little impact on oncologists’ decisions and is not
something they discuss with the patients unless specifically asked, since their
ultimate goal is to provide their patient with the best available treatment.)
The evaluation of a new product’s effectiveness is probably
changing in the clinic to include some level of cost:benefit evaluation and
market researchers should be changing as well to provide the most accurate
cost:benefit information to clients.
About the author
Jeremy Smith – Director of Client Strategy, THE PLANNING SHOP
Jeremy has over 12 years of global pharmaceutical research
experience, including over three years of exclusive oncology experience.
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
We’d like to set analytic software i.e. Google Analytics/Click Dimensions to help us improve our website by collecting and reporting information on how you use it. The cookies collect information in a way that does not directly identify anyone. For more information on how these cookies work, please see our Cookies Policy.