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Pay-by-results pricing opens up better cancer drugs

Radical solutions are being proposed to cut the spiralling cost of cancer drugs, which is preventing many patients from receiving life-saving treatment

Imagine a healthcare system in which drug companies only get paid for a course of treatment if it works as planned. That’s the approach behind a ground-breaking agreement finalised this year between the manufacturer of Velcade, a drug for a type of blood cancer, and the UK’s publicly funded health agencies.

The hope is that this agreement, together with a series of other initiatives, will help to tackle a crisis facing healthcare systems across the western world as the cost of new cancer drugs spirals. Prices are now so high that many people with the disease are being denied drugs altogether.

Take breast cancer. Recently, people with certain types of early-stage breast cancer in the UK, New Zealand and Australia had to pay up to US$70,000 of their own money for a year’s treatment with the drug Herceptin. Only an outcry from patients forced the health systems in these countries to pay for the drug. Even then, the New Zealand government chose to fund only a nine-week course, with patients having to make up the difference if their doctors prescribe a full year’s treatment. In the US, it costs up to $250,000 to buy drugs that will extend the life of someone with advanced colon cancer by an average of just 22 months. In Sweden, high prices mean that a maximum of 1 in 5 people with the disease receive the drugs they need.

These are extreme cases, but each new generation of cancer drugs comes with a similar set of stories. “We have skyrocketing prices,†says Nils Wilking, an oncologist at the Karolinska Institute in Stockholm, Sweden.

Earlier this year, Wilking and Bengt Jönsson of the Stockholm School of Economics published an analysis of who gets access to new cancer drugs in the 25 countries that make up the world’s major pharmaceutical markets (Annals of Oncology, vol 18, p iii1). “We could end up in the situation where drugs are only developed for a portion of wealthy people around the world,†Wilking says.

To address the issue of unequal access, we need to understand why prices have escalated, Wilking says. Whereas older cancer drugs worked as blunt instruments – they killed many types of cell, not just those that were cancerous – the drugs now appearing are touted as being much more precise. They target chemical pathways that stimulate cancer growth, or encourage the immune system itself to destroy cancer cells. The high expectations these new drugs bring have allowed pharmaceutical companies to inflate their prices. The main objective of the companies is, after all, to make a profit – and the pharmaceutical industry is among the most profitable in the US.

“These drugs were going to cure people, dramatically increasing how long people lived. They were going to do away with one of the scariest words in the English language, ‘chemotherapy’,†says Leonard Saltz of the Memorial Sloan-Kettering Cancer Center in New York City. If that happened, it would be a huge step forward. The problem, says Saltz, is that the drugs are not living up to expectations. “We are paying for the promise, not for what we got.â€

Those sky-high prices add significantly to the burden of the disease. In the US, 1 in 8 cancer patients have defaulted on debt payments due to their treatment costs and have been contacted by a debt collection agency, according to a survey in 2006 by the non-profit Kaiser Family Foundation, even though they have some form of health insurance. For those without insurance, the proportion is far higher. There are also concerns that publicly funded healthcare agencies, including Medicare in the US and the NHS in the UK, are finding it increasingly difficult to afford the expensive drugs that patients now widely demand.

That has led to a radical rethink on how to fund cancer drugs. In the UK, the National Institute for Health and Clinical Excellence (NICE), which assesses whether a drug is cost-effective, last year rejected Velcade as too expensive. Velcade, which is used to treat the second most common form of blood cancer called multiple myeloma, doesn’t work for 1 in 3 people with the disease. For those that it does help, it extends life by an average of less than 12 months.

Early this year, the drug’s manufacturer, Janssen-Cilag, proposed the pay-for-performance deal. After months of negotiations, its final form was announced in October: the NHS will pay over £24,000 for each successful course of the drug for patients who have tried one other therapy but relapsed. Crucially, it will only pay if blood tests indicate that the drug is working.

Deals like this will likely remain rare, not least because it is often impossible to measure which patients are responding to a drug. The Velcade case nevertheless illustrates an important point, says Alan Garber of the Center for Health Policy at Stanford University in California. “If there is a clear signal that the market is changing, the drug companies will adapt,†he says, though he warns that the process will take time.

The changing nature of the market is borne out by Wilking and Jönsson’s analysis, which found that it has become more common for agencies to assess the cost-effectiveness of drugs. The result so far has tended to be to reduce access to new therapies rather than drive down prices, they say.

One way to cut costs that does not require the cooperation of drug firms is to use their products more efficiently. Oncologist Ian Haines of Monash University in Melbourne, Australia, suggests that when drug companies set up clinical trials, they tend to use the maximum tolerated dose rather than the minimum dose that might be effective. For example, a clinical trial of Herceptin by the company that developed the drug, Genentech of San Francisco, suggested that it should be taken for one year. An independent, though smaller, Finnish trial suggests it might be equally effective to take the drug for just nine weeks, and that by doing so patients may suffer fewer heart problems, one of Herceptin’s acknowledged side effects, Haines wrote in September in a letter to the .

“The world has changed with these new drugs,†agrees Kate Law, head of clinical trials at Cancer Research UK. “We are feeling our way, and no one knows how long to give a drug for, and at what dose.â€

Identifying exactly how much of a drug is needed is an obvious way to cut costs. The result might be to cut into the manufacturers’ profits, so they are unlikely to run such trials themselves unless they are made a condition of the drug being approved. “Governments and healthcare providers and professionals should not sit back and relax once a drug is approved,†Wilking says. “They need to be more active in conducting post-marketing studies that address questions that are not just in the interests of the pharmaceutical companies.â€

Such trials are now starting to be set up independently of the companies, Law says. This October, a UK government-funded trial run by the clinical trials unit at the University of Warwick started recruiting patients to test whether a six-month course of Herceptin is any less effective than a course lasting a full year.

Such measures might cut the cost of new cancer drugs, but meanwhile health agencies, doctors and patients continue to be faced with some stark choices. “It’s not pretty,†says Saltz. “We are getting to the point where you can say to a patient with advanced colon cancer: ‘Sir, I can give you 11 months at $500 – the current cost of drugs for treatment that was standard 12 years ago – or with today’s drugs, I can give you 22 months at $250,000’. That is becoming the reality.â€

“Sir, for $500 I can give you 11 months to live; or with today’s drugs, I can give you 22 months but it will cost $250,000â€

Cancer – Learn more about one of the world’s biggest killers in our comprehensive special report.

For the poor it’s even worse

When someone in one of the world’s poor countries gets cancer, they are unlikely to receive treatment to either cure it or control the pain. “There has been a nihilistic attitude to cancer, that you can’t do anything about it,†says Stuart Brown of the in Brussels, Belgium.

That attitude will have to change. As populations age, and more people smoke and eat westernised diets, by 2020 there are expected to be more than 150 million extra cancer cases in low and middle-income countries than in 2000.

Use of opioids to control cancer pain was avoided for years, in part due to misplaced concerns about drug addiction. Palliative programmes are now becoming more common, but there is still a long way to go. Radiation therapy is essential for reducing cancer pain, but some 20 countries, mostly in Africa, don’t have a single radiotherapy machine.