Cancer expert decries rising drug costs

September 18, 2006

Can society countenance paying $161,000 a year for treating one cancer patient, as was estimated for one new drug? And again and again for many patients? If newer agents cost 500 times the older ones, can we cover them? What if, due to new agents, some cancers become more like other chronic diseases, where expensive treatment continues for a lifetime?

There's an avalanche of new cancer agents coming that will offer effectiveness never seen before, said William McGivney, Ph.D., CEO, National Comprehensive Cancer Network (NCCN). But the questions about how to pay for them-or whether to pay for them-are also something we have never faced before, he said. He spoke at the recent annual conference of the P&T Society, held in Washington, D.C.

Indeed, McGivney feels the costs of cancer drugs in the pipeline will be a major factor in pushing the nation into tensions and battles about accountability that will make the 1990s managed care fights look like a mere foreshadowing of the new age. McGivney, in addition to being head of NCCN, one of the foremost organizations in cancer care expertise, is a recognized authority in coverage issues and was for six years Aetna's VP for clinical and coverage policy.

He alluded to estimates of more than 400 cancer agents in the rich research pipeline, far more than for any other disease area. And all of them, he said, "have substantial price tags associated with them." He cited Wall Street analysts' estimates that use of the anti-angiogenetic Avastin along with chemotherapy to extend lung cancer survival could add "$2 billion to the healthcare system-this one agent, this one indication." He also believes that most of the room to slow costs by squeezing reimbursement for services is gone. "It's healthcare technology, stupid," implying that expansion of drugs and biologics, as well as machinery such as PET scanners and other innovations, is "really going to drive the system and force a lot of issues upon us as a society."

In the meantime, he noted, health care accounts for over 16% of the economy, and it could go to 19% by 2014, with the nation spending $11,045 per person for health care, compared with $6,423 today.

"Where are we going to end up ... 20%? 22%? Why not go to 50% and become the centers for excellence for the world?" asked McGivney, with a twinge of sarcasm. Even now all kinds of industries are having sharp difficulties, with large portions of their revenue going to employee health care: "It's a major issue that this country faces."

And there are exacerbating factors that make cancer drugs a top illustration of the conundrum, McGivney asserted. The aging population will mean more cancer diagnoses. And the new agents will not replace current drugs but will be used in addition to them. For example, he believes biologics will be added to chemotherapy-"at least for the short term. I would say short term is probably for the next 10 years or so."

Pressures on reimbursement are likely to be more visible soon, McGivney went on. "I do think that on a selective basis, you're going to see a return to specific evaluations of safety and effectiveness, with implementation of preauthorization and medical necessity the determinations for certain agents."

As an example of pressures on policy, he pointed to the "trial balloon" the Centers for Medicare & Medicaid Services floated last year, proposing nonpayment for medication beyond the uses the Food & Drug Administration has approved for them. Although that proposal did not fly, McGivney believes there will be other pressures on unapproved use, even though in cancer 50% to 75% of treatments used are unapproved by the FDA.