Doctors at this week's annual meeting of the American
Society of Clinical Oncology heard groundbreaking 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
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.
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.
Totals costs for
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
"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
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, he said. 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 conversation.
The survey of 119 cancer patients found that 48 percent said
they wanted to discuss costs with their doctor, but only 21% had actually done
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 benefit. 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
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 wasteful spending."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 programs to deliver more uniform high quality cancer care
while lowering costs. Other insurers, including WellPoint Inc, have made
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 patients. Data presented at ASCO show that, compared to a
control group, hospital admissions - viewed as a measurement of patient
outcomes - fell by 7%.
Spending on drugs was also reduced, while reimbursement to
physicians increased nearly 20%, Feinberg said. 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
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."