Escalating Drug Costs Could Provoke Consumer Backlash

HOLLYWOOD, Florida—The huge cost of modern day cancer drugs hurts everybody, from the patients who cannot afford them to the pharmaceutical companies who spend millions to develop them, a panel of industry analysts, biotechnology representatives, insurance industry leaders, and oncologists said at the National Comprehensive Cancer Network's 12th Annual Conference.

The main concern to emerge from the roundtable discussion titled "Cancer Care—Cost, Access and Value," was fear that escalating drug costs would eventually prompt a backlash from patients and interference from government. All panel members agreed that systems must be put in place to help consumers access optimal care, but not at the expense of the pharmaceutical and biotech industries that spend millions of dollars to develop new therapies.

"If prices go too high, patients and policymakers would get angry. This gets government thinking about price adjustment, and this makes investors nervous. That's when people start to worry, and this worry is what puts downward pressure on prices," said Sean Tunis, MD, MSc, principal, Rubix Health, Baltimore.

Jittery investors may ultimately influence drug prices, but the pharmaceutical industry can also get cold feet at the prospect of spending big bucks to bring a new cancer drug to market for a small return. Schumarry N. Chao, MD, MBA, president of SHC & Associates, and a consultant to the pharmaceutical industry, said she has seen companies pull a drug at the end of a phase II trial because market research showed that the drug was not going to become profitable.

"Companies are doing more market-driven research. One company decided the market was not there to warrant its investment of $400 million in phase III and IV clinical trials and pulled the plug on the drug it was developing," Dr. Chao commented.

Pharmaceutical firms are developing programs to cope with astronomical drug costs, but oncologists often have problems trying to access these in the course of their daily practices, said Deborah Schrag, MD, MPH, associate attending physician at Memorial Sloan-Kettering Cancer Center.

"When drug costs go up, the premiums go up, and when the premiums go up, it's harder for employers to maintain insurance for their workers. The costs of Medicare and Medicaid go up, and this affects all taxpayers. These are major issues that strike at the core of how US healthcare is organized and delivered," she said.

Lee N. Newcomer, MD, MHA, of UnitedHealthcare, agreed that disgruntled consumers pose a backlash threat if something is not done about escalating drug costs. A lot of money could be saved by third-party payers if they took the time to learn what therapies work, and for which patients. "Last year we found that 12% of patients with breast cancer underexpress HER2. A month later, we put into our claims system that we will no longer pay for trastuzumab [Herceptin] if HER2 is not overexpressed. Our usage of the agent is down 20%."

The same goes for erythropoietin, he said. "We are no longer going to pay for any claims for a hematocrit above 36%. We put this in place in a pilot in the Northeast last year, and usage is down 44%. That's a lot of money, because we put about $300 million a year into erythropoietin compounds. We have to start paying for the right drugs for the right candidates," he said.