[Ip-health] Going Broke To Stay Alive,Rising prices for cancer treatments are making patients -- and doctors -- balk

[Joana Ramos]

http://www.businessweek.com/@@b4WJJmUQdPDLNRMA/premium/content/06_05/b3969051.htm?campaign_id=search


JANUARY 30, 2006
Business Week

NEWS: ANALYSIS & COMMENTARY ( copied as fair use)

Going Broke To Stay Alive
Rising prices for cancer treatments are making patients -- and doctors
-- balk

By Catherine Arnst

Avastin is one of the most important cancer treatments to come along in
a decade. Developed by Genentech Inc. () and approved in the U.S. two
years ago, it can add months to the lives of the sickest patients with
colon, lung, and breast cancer, a triple crown no other recent cancer
drug can claim. Still, Genentech announced this month that Avastin's
recent sales are running about 10% lower than many Wall Street analysts
had expected.

The reason isn't hard to figure out. Avastin costs anywhere from $4,400
to $8,800 a month. The drug has Food & Drug Administration approval only
for the treatment of colon cancer, so many insurers are refusing to pay
for its use against breast and lung cancer. "It is naive to think that a
patient's ability to pay wouldn't affect the practice of medicine," says
Dr. Neal J. Meropol of Fox Chase Cancer Center in Philadelphia.

Cancer has always been an expensive disease, but the stratospheric
prices of the newest drugs are injecting cost into treatment decisions
to a degree rarely seen before. As a result, some doctors, patients, and
even whole nations are beginning to reject the latest treatments, no
matter how effective.

Drug companies argue that the high prices are necessary to offset
development costs of these complex drugs. They also note that the newer
products are more effective and safer. Before these were available, "the
patients died quickly, so their treatment didn't impact the cost of
health care," says Ian T. Clark, head of Genentech's commercial operations.

"SOMETHING HAS TO GIVE"
Now the impact is obvious. Most of the newest treatments are taken along
with older chemotherapies, and some are even taken in combination with
one another, adding pricey drug on top of pricey drug. Dr. Leonard Saltz
of Memorial Sloan-Kettering Cancer Center in New York says that 10 years
ago the drugs used to treat colon cancer cost about $500. Today, the tab
is $250,000. Over the same 10-year period, the average life expectancy
for colon cancer patients increased from 11 months to a little more than
two years. "We're excited about these drugs," he says, "but not everyone
can get them. Something has to give."

Avastin is far from the only cancer drug raising such concerns. ImClone
Systems Inc.'s () Erbitux costs $30,000 for eight weeks of treatment.
Gleevec, a Novartis () drug, costs $2,200 a month and can be taken
indefinitely. Herceptin, a Genentech drug for breast cancer, runs $3,200
a month. And antinausea drugs to relieve side effects can cost $100 a pill.

Insurers are watching this trend with alarm. Most drugs are only
prescribed for FDA-approved uses, but oncologists routinely administer
cancer drugs for unapproved, or off-label, uses if supported by clinical
trial data. Medicare is required to pay for most off-label cancer
treatments, and private insurers used to follow suit, but recently they
have started to balk. Morgan Stanley () surveyed 100 U.S. oncologists in
December and found that their off-label use of Avastin for breast and
lung cancer was very low, even though clinical data showed the drug
could improve survival for those diseases. The doctors said they expect
to step up their use of Avastin once they are assured of reimbursement.
"We're finally beginning to see some pushback on off-label uses,"says
Dr. Steven Harr, a Morgan Stanley analyst.

Even so, drug companies have little incentive to lower prices. New
cancer drugs have patent protection, there are virtually no me-too
drugs, and desperate patients have been known to mortgage their homes to
pay for treatment. Plus, Medicare is forbidden from negotiating prices
with drug companies. "You might see some pressure in three to five years
to moderate prices, but there are no forces at work now," says Eric
Schmidt, analyst with S.G. Cowen & Co.

That leaves oncologists and patients with tough choices. Doctors say
many breast cancer patients routinely refuse a new class of drugs known
as aromatase inhibitors, which prevent the disease from recurring,
because they can't afford them. Herceptin is also effective at
preventing recurrence, but a Belgian study released last month
calculated that Herceptin would cost European governments $42,000 per
patient if used for that purpose. "It is possible that present budgets
will not be able to bear the extra expense," the authors warned.

In America, even patients with generous insurance policies are
struggling with the expense. H. Wayne Thornton of Albuquerque, a
supervisor with the U.S. Forest Service, was shocked when he was
diagnosed with breast cancer in 1996. The 59-year-old has gone through
surgery and numerous rounds of chemo. He is now trying to survive on a
combination of Herceptin, Avastin, and Abraxane, a new chemotherapy from
American Pharmaceutical Partners Inc. () -- at a cost of about $25,000 a
month.

Thornton pays a premium of $388 per month to cover his wife, Betty, and
himself. Still, his co-pays total hundreds of dollars each month for
these three drugs. He also has co-pays for pain killers, antinausea
medication, and doctors' bills. "I try to stay focused on my health, but
it's easy to slide into depression," he says.

Oncologists are also fighting despair. Because they administer most
cancer drugs intravenously, the docs usually buy the drugs themselves
and bill their patients at a razor-thin markup. "I am in an incredible
bind," says Dr. Barbara L. McAneny, Thornton's doctor. She would like to
give patients state-of-the-art treatment every time, "but you have to
live in the real world. When the patient says 'I can't afford it,' I
start to think about what is second-best."

All drug manufacturers have programs that provide medicines free of
charge to uninsured patients. Last year Genentech spent $200 million on
such subsidies. But that doesn't address all the problems of the
underinsured. "I have patients who refuse treatment all the time because
they cannot come up with the money," says Dr. Craig Hildreth, a St.
Louis oncologist. Hildreth says he does not believe any of his patients
have been denied a chance at prolonged survival because of an inability
to pay. Yet.

--
Joana Ramos, MSW
Cancer Resources & Advocacy
7303 23rd Ave. NE
Seattle, WA  98115
206-229-2420
http://ramoslink.info/