Physicians at Sloan Kettering Cancer Center have taken a giant step toward stemming the tide of unconscionable pharmaceutical industry price gouging. Sloan-Kettering physicians said NO to Sanofi’s new anti-cancer drug, Zaltrap which the company priced at $11,063 per month.
Drs. Peter B. Bach, Leonard B. Saltz, and Robert E Wittes publicized the center’s position, urging other physicians to exercise their professional responsibility by choosing the medicines they prescribe with full consideration to the clinical value and cost burden for patients.
As a result, in what is considered a watershed moment, Sanofi promptly offered to reduce the price of Zaltrap by half.
The Sloan-Kettering physicians have challenged not only Big Pharma–they have challenged the profession for its blind acceptance of industry-dictated healthcare policies that have led to skyrocketing medical costs that bear no relationship between the price of drugs and the clinical value they provide for patients.
They note that both FDA’s approval process and Medicare reimbursement guidelines ignore entirely the absence of benefit and cost burden.
"This political climate also helps explain why the Affordable Care Act precludes Medicare from changing its coverage or payment amounts based on cost comparisons like the one we have outlined, even when two drugs appear to work equally well. And it is probably why neither presidential candidate has addressed runaway cancer drug prices.
But if no one else will act, leading cancer centers and other research hospitals should. The future of our health care system, and of cancer care, depends on our using our limited resources wisely.
The current level of spending on health care, estimated to be $2.8 trillion this year, is already too high. The growth rate in health spending is unsustainable."
Today’s Times Editorial lauds the Sloan Kettering physicians.
Vera Sharav
THE NEW YORK TIMES
October 14, 2012
In Cancer Care, Cost Matters
By PETER B. BACH, LEONARD B. SALTZ and ROBERT E. WITTES
AT Memorial Sloan-Kettering Cancer Center, we recently made a decision that should have been a no-brainer: we are not going to give a phenomenally expensive new cancer drug to our patients.
The reasons are simple: The drug, Zaltrap, has proved to be no better than a similar medicine we already have for advanced colorectal cancer, while its price — at $11,063 on average for a month of treatment — is more than twice as high.
In most industries something that offers no advantage over its competitors and yet sells for twice the price would never even get on the market. But that is not how things work for drugs. The Food and Drug Administration approves drugs if they are shown to be “safe and effective.” It does not consider what the relative costs might be once the new medicine is marketed.
By law, Medicare must cover every cancer drug the F.D.A. approves. (A 2003 law, moreover, mandates payment at the price the manufacturers charge, plus a 6 percent cushion.) In most states private insurers are held to this same standard. Physician guideline-setting organizations likewise focus on whether or not a treatment is effective, and rarely factor in cost in their determinations.
Ignoring the cost of care, though, is no longer tenable. Soaring spending has presented the medical community with a new obligation. When choosing treatments for a patient, we have to consider the financial strains they may cause alongside the benefits they might deliver.
This is particularly the case with cancer, where the cost of drugs, and of care over all, has risen precipitously. The typical new cancer drug coming on the market a decade ago cost about $4,500 per month (in 2012 dollars); since 2010 the median price has been around $10,000. Two of the new cancer drugs cost more than $35,000 each per month of treatment.
The burden of this cost is borne, increasingly, by patients themselves — and the effects can be devastating. In 2006, one-quarter of cancer patients reported that they had used up all or most of their savings paying for care; a study last year reported that 2 percent of cancer patients were driven into bankruptcy by their illness and its treatment. One in 10 cancer patients now reports spending more than $18,000 out of pocket on care.
Which brings us back to our decision on Zaltrap. In patients with advancing, metastatic colorectal cancer, the new drug, approved by the F.D.A. in August and jointly marketed by Sanofi and Regeneron, offers the same survival benefit as Genentech’s Avastin, which works through a similar molecular mechanism. When compared with the standard chemotherapy regimen alone, adding either medicine has been shown to prolong patient lives by a median of 1.4 months. Major clinical practice guidelines, like those from the National Comprehensive Cancer Network, agree that Zaltrap is no better than Avastin in this setting. (Full disclosure: Two of us, Dr. Bach and Dr. Saltz, have been paid consulting fees by Genentech.)
But Avastin costs roughly $5,000 a month: very expensive in its own right, yet less than half of Zaltrap’s price tag. And while the side effects in both drugs are roughly equal, doses of Avastin generally take less time to administer than those of Zaltrap, which makes Avastin more convenient for patients.
Consider that colorectal cancer is typically diagnosed in older individuals and the cost issue becomes starker still. Many patients are on Medicare and living on fixed incomes. And because Medicare requires patients to co-pay for cancer drugs, 20 percent of the cost of drugs like Zaltrap and Avastin is passed on — absorbed either by supplemental insurance or by the patients themselves.
To put these percentages in perspective, an older colorectal cancer patient without extra insurance would have to pay more than $2,200 out of pocket for a month’s treatment with Zaltrap. That’s greater than the monthly income for half of Medicare participants.
Once you take all this into account it may seem surprising that the decision to exclude Zaltrap from our hospital’s formulary was a hard one to make. But because our medical culture equates “new” with “better” so unequivocally, a decision like this one can seem out of place at a leading cancer hospital
Political rhetoric today is similarly slanted. Our refusal to adopt this remarkably expensive therapy risks being labeled “rationing,” not rational.
This political climate also helps explain why the Affordable Care Act precludes Medicare from changing its coverage or payment amounts based on cost comparisons like the one we have outlined, even when two drugs appear to work equally well. And it is probably why neither presidential candidate has addressed runaway cancer drug prices.
But if no one else will act, leading cancer centers and other research hospitals should. The future of our health care system, and of cancer care, depends on our using our limited resources wisely.
The current level of spending on health care, estimated to be $2.8 trillion this year, is already too high. The growth rate in health spending is unsustainable.
Of course, we know our decision about Zaltrap will not meaningfully address these larger problems. Projected United States sales of Zaltrap in 2013 are less than $150 million, or 0.005 percent of all dollars spent on health care. Our use would account for a very small percentage of even that number.
But it is a step in the right direction — one of many we need to take.
The writers are doctors at Memorial Sloan-Kettering Cancer Center. Peter B. Bach is the director of the Center for Health Policy and Outcomes, Leonard B. Saltz is chief of the gastrointestinal oncology service and chairman of the pharmacy and therapeutics committee, and Robert E. Wittes is the physician in chief.
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The New York Times
EDITORIAL Incredible Prices for Cancer Drugs
November 12, 2012
An unusually bold stand by doctors at the Memorial Sloan-Kettering Cancer Center in New York has forced a big drug company to reduce the cost of an overpriced drug for treating colorectal cancer that was no better than a cheaper competitor and did almost nothing to extend a patient’s life. It is a heartening sign that alert and aggressive physicians can potentially play a major role in helping to reduce the escalating costs of health care for treatments of marginal value.
The drug is Zaltrap, which was developed by Sanofi, a large French pharmaceutical company, and Regeneron Pharmaceuticals, a small biotechnology company in Tarrytown, N.Y. It was approved by the Food and Drug Administration in August as a second-line treatment for colorectal cancer after initial courses of treatment have stopped working. It is used for treating colorectal cancer that has spread from the colon to other parts of the body and is administered intravenously.
Zaltrap was initially priced at about $11,000 a month, more than double the price of a competing drug, Avastin, made by Genentech, which is itself considered too expensive by many doctors for the minimal medical benefit it delivers. When added to standard cancer treatments, both drugs improve the median survival time of patients by a minuscule 1.4 months.
The doctors at Sloan-Kettering balked at the high price of Zaltrap and decided not to approve the drug for use in the hospital. Three of the doctors then wrote an Op-Ed article in The New York Times explaining their rationale and making a strong case that there is often little relationship between the prices of drugs and the value they provide. Companies often seem to charge what the market will bear for cancer drugs — as much as $35,000 a month and $100,000 a year in various cases.
The president of the American Society of Clinical Oncology recently praised Sloan-Kettering for addressing “the elephant in the room: unsustainable costs in cancer care.” With other doctors expressing support for Sloan-Kettering’s move, Sanofi announced last Thursday that it would effectively cut the price of Zaltrap in half. Sanofi is not changing the official price for Zaltrap but will offer discounts of about 50 percent to the doctors and hospitals who buy the drug and then administer it intravenously to patients.
There are few constraints on escalating cancer drug prices in the current health care market. That will need to change. Sloan-Kettering has shown what the medical profession can do to reduce costs if it has a mind to.
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The New York Times
November 8, 2012
Sanofi Halves Price of Cancer Drug Zaltrap After Sloan-Kettering Rejection
In an unusual move, a big drug company said on Thursday that it would effectively cut in half the price of a new cancer drug after a leading cancer center said it would not use the drug because it was too expensive.
The move — announced by Sanofi for the colon cancer drug Zaltrap — could be a sign of resistance to the unfettered increase in the prices of cancer drugs, some of which cost more than $100,000 a year and increase survival by a few months at best.
Zaltrap came to market in August at a price of about $11,000 a month. Soon after, Memorial Sloan-Kettering Cancer Center in New York decided not to use the drug, saying it was twice as expensive but no more effective than a similar medicine, Avastin from Genentech. Both drugs improved median survival by 1.4 months, doctors there said.
Three doctors at Sloan-Kettering publicized the cancer center’s decision last month in an Op-Ed article in The New York Times.
“Ignoring the cost of care is no longer tenable,” they wrote. ”Soaring spending has presented the medical community with a new obligation. When choosing treatments for patients, we have to consider the financial strains they may cause alongside the benefits they may deliver.”
Sanofi executives argued that the price they had set was very similar to that of Avastin. “The intent was not to charge a premium,” Christopher A. Viehbacher, the chief executive of Sanofi, said in an interview last month.
Sloan-Kettering, he said, was basing its price comparison on a dose of Avastin that was half the dose Sanofi used in its own comparison.
On Thursday, Sanofi backed down. “We believe that Zaltrap is priced competitively as used in real-world situations,” it said in a statement. “However, we recognize that there was some market resistance to the perceived relative price of Zaltrap in the U.S. — especially in light of low awareness of Zaltrap in the U.S. market. As such, we are taking immediate action across the U.S. oncology community to reduce the net cost of Zaltrap.”
The move was first reported on Thursday by The Cancer Letter, a newsletter about cancer issues.
Sanofi said it would not change the official price for Zaltrap but would offer discounts of about 50 percent. Zaltrap, which is given intravenously, is not bought directly by patients but is sold to doctors or hospitals, which administer it. The cost is then reimbursed by Medicare or private insurers. Patients could be liable for a co-payment.
Dr. Leonard B. Saltz, chief of gastrointestinal oncology at Sloan-Kettering and one of the authors of the Op-Ed article, said Sanofi’s offer of discounts “doesn’t really address the problem from our perspective” because Medicare reimbursement and patient co-payments would still be based on the higher list price, at least for several more months.
Also, he said, the discounts could give doctors and hospitals an incentive to use Zaltrap because they could profit from the difference between the discounted price they pay for the drug and the higher price at which they are reimbursed by insurers.
Dr. Saltz said even at the lower price, he did not foresee Sloan-Kettering doctors using Zaltrap because it was no better than Avastin and might be more toxic.
Dr. Saltz is now a consultant to Genentech and has been one to Sanofi.
Zaltrap, developed by Sanofi and Regeneron Pharmaceuticals, a biotechnology company in Tarrytown, N.Y., was approved by the Food and Drug Administration in August for use as a second-line treatment for colorectal cancer, meaning after an initial regimen had stopped working. Like Avastin, Zaltrap impedes the formation of blood vessels that nourish cancer cells.
Dr. Peter B. Bach, director of the Center for Health Policy and Outcomes at Sloan-Kettering and one of the authors of the Op-Ed piece, said the price of Zaltrap reflected a bigger problem — that over all there was little relation between drug prices and the value they provided.
“Normal markets wouldn’t behave like this,” he said on Thursday. “You couldn’t introduce something twice as expensive and no better and still sell it.”
Dr. Lee Newcomer, senior vice president for oncology at UnitedHealthcare, said it was the first time he could recall a company cutting the price of a cancer drug so much. “It was the first time physicians have stood up and said, “Enough is enough,’ ” he said. “And I think that was a watershed moment.”