Doctors at this week's annual meeting of the American Society of Clinical
Oncology heard ground-breaking data on a new class of immune system boosters that
some believe will become the main treatment for more than half of all cancers in
the next 10 years.
They included drugs from Bristol-Myers Squibb and Merck & Co that shrank
tumours in patients with advanced melanoma and lung cancer. Citigroup analysts
expect such "immunotherapies" to cost around $110 000 in the United States for a
year's worth of treatment and $80 000 in the rest of the world, generating sales
of $35 billion a year in the next 10 years.
That would represent a hefty proportion of total oncology drug sales, which
research firm IMS Health has forecast reaching $88 billion by 2016.
Medicines already account for a higher percentage of oncology spending than
for other diseases, but healthcare experts see an opportunity if more effective
drugs will help reduce hospitalizations and other costs.
Cancer is costly
Dr Antoni Ribas from the University of California, Los Angeles Jonsson
Comprehensive Cancer Center said the most costly part of cancer care is later in
the disease when patients are months from dying. "Even if it looks like we're
developing expensive agents, these will eventually be cheap, because it's
actually treating people," he said.
The National Cancer Institute estimates that the total cost of caring for US
cancer patients will rise to $174 billion in 2020 from $125 billion in 2010 - an
increase that will put already strained US health budgets under further duress.
The biggest slice of overall US healthcare costs - more than a third - is
hospital care, according to statistics compiled by the Kaiser Family
Insurers "are paying more attention to the appropriate use of interventions -
there are more pre-reviews and less flexibility in 'off-label' use," said Dr
Neal Meropol, chief of the division of haematology and oncology at University
Hospitals Case Medical Center in Cleveland. He was referring to the practice of
prescribing drugs for uses not specifically approved by regulators.
Patients are already being asked to share a greater portion of costs, often
through higher insurance co-payments or deductibles, and that share could be
higher for treatments less likely to reduce hospitalisation or otherwise
generate value."There will be increased cost sharing for patients based on the
relative value of a particular therapy," Meropol said. A treatment shown to be
life-saving may cost a patient very little out of pocket, while they may be
asked to contribute more for a drug with only a small benefit in extending life,
That will require a huge transformation in the approach to cancer care. A
study conducted by Duke University Medical Center in Durham, North Carolina
found that oncologists rarely discuss costs with patients, even though many of
them are in financial distress and said they wanted to have that
The survey of 119 cancer patients found that 48% said they wanted to
discuss costs with their doctor, but only 21% had actually done so.
Who will benefit
Scientists are making great progress in tailoring drugs to match genetic
mutations in specific tumours, but most cancer medications are still prescribed
to wide groups of patients with no clear idea ahead of time on which ones will
Four-fifths of US health insurers recently polled by consulting firm
PricewaterhouseCoopers now require evidence of cost savings or a clear clinical
benefit to include new products on their lists of covered drugs.
Insurers are also working to develop new payment models - getting away from
the "fee for service" system that critics say can lead to unnecessary or
"The ongoing mantra has been pay for value. Don't pay for service or don't
pay for volume," said Bruce Feinberg, chief medical officer at drug wholesaler
Cardinal Health. "Oncology is at the forefront because it has the fastest rising
costs."Cardinal, in partnership with health insurer CareFirst, has been
conducting pilot programmes to deliver more uniform high quality cancer care
while lowering costs. Other insurers, including WellPoint Inc, have made similar
Cardinal's "clinical pathways" program, launched in 2008, included hundreds
of oncologists across a three-state network. The pilot, in which 95% of
participating doctors complied with suggested treatment guidelines, resulted in
a 15% reduction in overall costs in caring for breast, colon and lung cancer
Data presented at ASCO show that, compared to a control group, hospital
admissions - viewed as a measurement of patient outcomes - fell 7%. Spending on
drugs was also reduced, while reimbursement to physicians increased nearly 20%,
As US insurers and healthcare providers gear up for President Barack Obama's
health care reforms, which will take full effect next year, experts say the
focus on costs is bound to increase.
"Many organisations have been preparing for the ACA (Affordable Care Act) and
have taken steps to improve efficiency and to develop quality improvement
programmes that will minimise the use of treatments and diagnostics that are not
likely to be a benefit," Meropol said.
"Access to insurance will increase access to care in the case of cancer that
is particularly important because early diagnosis and appropriate therapy make a
huge difference in outcomes."