[Ip-health] LA Times: Setting a Price for Putting Off Death

[Mike Palmedo]

http://www.latimes.com/business/la-fi-life18mar18,1,2591501.story?ctrack=3D=
1&cset=3Dtrue

Setting a price for putting off death - A few more months of life may
not be worth the costs of new cancer therapies, some argue.

By Daniel Costello,
LA Times Staff Writer
March 18, 2007

That question is at the center of one of the most controversial debates
in medicine today involving a new generation of hyper-expensive cancer
drugs.

On Tuesday, the Food and Drug Administration approved GlaxoSmithKline's
Tykerb, a once-a-day pill for late-stage breast cancer patients that
costs nearly $35,000 a year. It's the latest of half a dozen new cancer
therapies with names such as Avastin and Tarceva that can run as much as
$100,000 for an annual supply.

Although the medications work much longer in some patients, they help
extend the lives of most for only a few months.

The drugs' sky-high costs compared with their relatively small health
benefits have sparked arguments among policymakers and medical
professionals about what to do with the growing number of people who are
depleting their life savings on the drugs or, worse, who can't get them
at all.

More broadly, they ask, is this the best way for society to spend its
increasingly limited healthcare dollars?

Harriet and Mort Frank illustrate the ethical and financial dilemmas.

Since December, the retired Mission Viejo couple have been paying as
much as $2,000 a month in out-of-pocket costs for Harriet's lymphoma
medication, Rituxan, by Genentech Inc. and Biogen Idec Inc.

The Franks get by on $1,432 a month with their combined Social Security
checks and a small amount of savings. But with the drug's expense eating
into their modest nest egg, they're worried about what might happen next.

"So far this medication is working wonders," Mort said. "But I keep
thinking, how are we going to keep affording it?"

Drug companies and many patients insist even incremental gains are
worthwhile. Small clinical advances are likely to turn into larger ones
over time, and patients who can afford the treatments say they deserve them=
.

Traditionally, drug companies have said the prices of their drugs are
based on the costs to develop them. Now, they say, drugs are priced
according to what the market will bear.

"The cost of our product incorporates both the extensive costs incurred
during research and development as well as the price determined by the
market, " said Walter Moore, vice president of government affairs for
Genentech in South San Francisco.

But doctors, patient advocates and healthcare economists warn that the
drugs are simply too expensive at a time when medical costs are rising
rapidly =97 and more patients are picking up a growing share of their
medical bills.

The costs aren't borne only by those who are sick. Because insurers pay
for almost all federally approved drugs, the costs of covering them
would eventually spill into the nation's overall medical bill and
therefore would raise everyone's insurance premiums.

This year, cancer drugs are expected to account for nearly 22% of the
nation's drug bill, up from 13% in 2002, according to Morgan Stanley.

Several countries, including Britain, refuse to pay for the drugs for
all patients. Here, Congress is considering legislation to control the
costs of biotech drugs.

The debate also is raging among oncologists, who admit being torn about
wanting to give patients marginally effective drugs that could cause
serious financial harm.

"These drugs are good, but it's important to remember they aren't a
cure," said Peter Eisenberg, an oncologist at California Cancer Center
in Greenbrae, Calif. "Drug companies are in another world if they think
people can afford these things."

Dr. Edith Perez, co-director of the breast cancer center at the Mayo
Clinic, said some patients with insurance were paying thousands of
dollars for the therapies.

Because many patients now pay as much as 30% of their medical bills
rather than flat co-payments, some physicians have started offering
payment plans for patients who rack up bills as high as tens of
thousands of dollars, Perez said.

In the current issue of the Journal of the American Medical Assn., a
general practitioner from Oklahoma City described his experience with
the lack of uniform access to new cancer drugs.

In a one-page commentary, Dr. Perry Klaassen, 66, wrote how he was
diagnosed with colon cancer in 2001 and was surviving because of a
series of cancer drugs he has taken regularly since then. He pays $450 a
month, which he described in an interview this week as manageable.

One of his patients wasn't so lucky. Three years ago, Klaassen diagnosed
a 63-year-old woman with late-stage colon cancer. He recommended that
she try chemotherapy and other drugs, but she declined, saying she
didn't have insurance and didn't want to burden her family with unneeded
debt. She died a year later.

"We have to be able to do better than this," Klaassen said.

Irene Knoll, 81, of Santa Ana is suffering the financial consequences of
taking expensive medications. She was diagnosed with pancreatic cancer
in December and is now on regular chemotherapy while taking several
other drugs, including Johnson & Johnson's Procrit, which boosts red
blood cells, to treat her cancer-related anemia.

Her Medicare HMO plan requires her to pay 20% of many medical bills. As
of this week, she has an outstanding balance with her oncologists for
$4,700. With her $1,200 monthly Social Security check, she has paid only
$400.

Knoll is trying to apply for Medi-Cal, the state's program for the poor
that would cover most of her bills, but she may not qualify.

"I try to look at the brighter side of things, but, sure, there are days
when I can't help thinking this is just crappy," she said.

As recently as a decade ago, cancer therapies rarely cost more than a
$1,000 a year. But they weren't very effective and had harmful side effects=
.

The newer, so-called targeted drugs work like Trojan horses, slipping
inside cancer cells and attacking them without killing lots of healthy
cells. Although some patients on the new cancer drugs such as Gleevec, a
leukemia drug made by Novartis Inc., live significantly longer, most
lives are extended for just a few months.

Nonetheless, the prices are steep. When Herceptin, the first targeted
therapy that treats breast cancer, arrived in 1998, it cost about
$20,000 for a typical cycle.

All of the drugs' price tags jumped considerably by 2004, when ImClone
Inc. and Bristol-Myers Squibb Co. introduced Erbitux, a late-stage
colorectal-cancer therapy that costs about $10,000 a month. Drug
companies point out that some late-stage cancer patients don't survive
on therapy for long and use less than a year of treatment.

Tykerb, GlaxoSmithKline's breast cancer drug, costs slightly less than
most targeted drugs, but it extends the lives of most patients only
about two months.

A trial of 399 women given Tykerb along with chemotherapy showed that it
stopped the progression of tumors in patients for nearly seven months
versus about five months for those on chemotherapy alone. Soon, such
drugs may grow in popularity. Although most are now used solely in
late-stage cancer patients, some are being approved to treat early-stage
cancer, potentially expanding their use significantly.

Last year, the Food and Drug Administration approved Herceptin for women
who were in remission and Genentech's Avastin for earlier-stage
colorectal cancer. Many drug companies also are trying to expand the use
of targeted drugs.

That could quickly turn several of the drugs into some of the
top-selling medications in the world, raising healthcare costs overall.

Analysts expect Avastin's sales to reach $7 billion in the U.S. by 2009,
compared with $1.1 billion in 2005.

The targeted cancer drugs and better detection are helping reshape
cancer treatment, leading some to believe a corner has been turned in
the fight against the disease.

Last year, cancer deaths fell for a second straight year. Three out of 5
cancer patients now live at least five years after their diagnosis, and
there are now 10 million cancer survivors in the U.S., according to the
National Cancer Society.

But those gains have to be taken in context of what else the money spent
on cancer treatment could have been used for, said Peter Neumann,
director of the Center for the Evaluation of Value and Risk at Tufts-New
England Medical Center.

"In terms of the cost of a life saved, it's possible other areas of
medicine, like better disease prevention or better cardiovascular care,
may be more effective."

Although it's a vague metric, one historical tool used to judge the
value of a medical intervention is known as the Quality Adjusted Life
Year, which is essentially a rule of thumb that a year of prolonged life
is worth around $50,000 in today's dollars.

By that standard, some of the new cancer drugs may not be worth their
costs when measured against their benefit to society, Neumann said.

Increasingly, advocate groups such as Breast Cancer Action in San
Francisco are pushing Congress to pass laws limiting the price drug
makers can charge for such drugs. .

The recent pressure, however, appears to be having an effect on the
companies themselves. Last year, when Amgen Inc. won approval for a new
colon cancer drug, Vectibix, which costs $8,000 a month, the Thousand
Oaks-based company said patients would receive it free after co-payments
exceeded 5% of their adjusted gross income.

Soon after, Genentech unveiled its own plan. The biotech company said it
would impose a cap of $55,000 per patient per year no matter their
income or insurance status.