Download as pdf or txt
Download as pdf or txt
You are on page 1of 4

c o m m e n ta r y

What is the value of oncology medicines?


Joshua Cohen & William Looney
Coverage with evidence development (CED), rather than quality-adjusted-life-year (QALY) thresholds, offers the
best way forward in balancing evidence-based policy for new oncology products with the needs of developers,
payers, physicians and patients.
© 2010 Nature America, Inc. All rights reserved.

F aced with balancing increasing demand


with limited resources, payers must weigh
the costs and benefits of different treatments
in deciding which to cover and under what cir-
cumstances. Comparative effectiveness research
(CER) seeks to bridge the evidence gap between
what we know and what we do in medical care
by informing this decision-making process.
However, potential linkage of CER results to
cost-effectiveness thresholds may limit patient

P. Marazzi/Photo Researchers
access to oncology therapeutics and reduce future
investment in pharmaceutical innovation.
In the following article, we provide a coun-
terpoint to claims in favor of the imposition of
cost-effectiveness thresholds based on CER and
attempt to expose flawed premises underlying
the threshold approach. Our aim is to offer a The benefits of Herceptin (trastuzumab) in early stage breast cancer only became apparent after
more balanced and nuanced assessment of can- off label use.
cer drugs, including the merits and drawbacks
of methods for valuing them and the extent policies for oncology medicines and being suf- $500 million to establish the Patient-Centered
to which such methods constitute a barrier to ficiently responsive to product developers, pay- Outcomes Research Institute under the 2010
patient access. Setting thresholds is not a driver ers, physicians and patients. health reform bill, the federal government has
of excellent or even efficient care per se. Rather indicated that it will play a role in this decision-
than imposing arbitrary limits on drug provi- Rationing oncology drugs? making process. CER seeks to inform decision
sion, a more constructive approach to CER- Since the mid-1990s, a new wave of makers whether and to what extent new tech-
based priority setting is to link reimbursement molecular, targeted therapies has been intro- nologies offer added benefits when compared
to the accrual of data that enable further clinical duced to treat various cancers. Although often with existing therapies2. However, because
research—as in the case of coverage with CED. less toxic than older regimens, they are nearly potential linkage of CER results to cost-effec-
Coverage with evidence development (CED) always more expensive, and on the whole they tiveness thresholds may have negative effects on
is an evolving method, initiated by Medicare, offer relatively modest gains in survival and patient access to oncology therapeutics as well
designed to provide provisional access to novel quality of life. In a setting of unlimited resources, as future investment in pharmaceutical innova-
medical interventions while simultaneously all effective therapies, even those with modest tion, we must be aware of potential pitfalls with
generating the evidence needed to determine benefits, could be offered to every patient, who this approach.
whether unconditional coverage is warranted. would either pay directly themselves or indi- Recently, several oncologists, policymakers
The CED strategy may serve to reconcile the rectly through a third-party payer. Because of and ethicists have criticized what they view as
tension between developing evidence-based limited resources, however, publicly funded the pervasive prescribing of “marginally benefi-
healthcare programs (e.g., Medicare) and private cial” cancer drugs3. In one particularly provoca-
Joshua Cohen is at Tufts University School insurers must weigh the costs and benefits of dif- tive commentary, Fojo and Grady4 put forward
of Medicine, Center for the Study of Drug ferent treatments in deciding which treatments three main recommendations: first, as a matter
Development, Boston, Massachusetts, USA, to cover, and under what circumstances1. of policy, payers should not spend more than
and William Looney is at Pfizer, New York, With the inclusion of $1.1 billion earmarked $129,090 per QALY, which is the cost-per-QALY
New York, USA. for CER in the 2009 stimulus package, as well as of renal dialysis, an amount deemed “sufficient

1160 volume 28 number 11 november 2010 nature biotechnology


COMMEN TARY

to buy excellent care”; second, pharmaceutical and economic vantage point, before approving Despite its merits as a decision tool, the cost-
sponsors should test only those interventions them for prescribing and reimbursement. This per-QALY approach is seen by many experts as a
in clinical development that could be marketed process has been termed the “fourth hurdle,” blunt instrument, allowing for “scant sensitivity
at <$20,000 per treatment cycle if they confer a joining the traditional hurdles of safety, efficacy in comparing the efficacy of two competing but
survival advantage of two months or less; and and manufacturing. similar drugs”10. Key flaws in the QALY meth-
finally, oncologists should adhere to US Food The international trend is for public payers to odology are:
and Drug Administration (FDA)-labeled indi- systematically adopt the fourth hurdle. Negative
cations and avoid as much as possible off-label health technology assessment (HTA) appraisals • An inability to provide a rationale or empiri-
prescribing of oncology medicines. often lead to coverage refusals or conditional cal basis for arbitrarily chosen thresholds,
In the following sections, we provide a coun- reimbursement policies. Conditions may which are selected by payers with no input
terpoint to these policy recommendations. include indication restrictions, prior authoriza- from patients or oncologists11.
Although acknowledging the importance of tion, quantity limits and step therapy. Finally, in
debate on the critical issue of how much added certain instances, HTA drives decisions on what • An inability to accurately account for com-
value new oncology drugs provide, and how price is acceptable for a new treatment relative plexities of measuring individual prefer-
CER will contribute to our knowledge base, we to the price of existing therapy. ences in capturing the trade-off between
attempt to expose flawed premises underlying Fojo and Grady4 favor more systematic adop- quality and length of life12.
claims made by Fojo and Grady4. We look at tion of the fourth hurdle in the United States,
the merits and drawbacks of methods for valu- specifically for cancer therapeutics, following • An assumption that policymakers should
ing cancer drugs and the degree to which such the international trend. Moreover, they assign maximize QALYs subject to a budget con-
© 2010 Nature America, Inc. All rights reserved.

methods constitute a barrier to patient access. a responsibility to oncologists as “agents of straint, irrespective of the parties to which
We start by outlining the emergence of health change” to internalize HTA appraisals, whether QALYs accrue. This contrasts with the views
technology appraisals, critically assess the cost- in the form of payer policies or clinical practice of the general public, which, when asked,
per-QALY approach and then go on to discuss guidelines and limit their prescribing of “mar- appears to want to prioritize resource alloca-
policy implications in the light of our critique. ginally effective medicines.” tion in such a way that we help those who
are worst off first, because they have the
Health technology assessment in cancer The cost-per-QALY approach greatest unmet needs13,14.
According to the World Health Organization The most prevalent approach to measure cost
(Geneva), cancer is poised to overtake heart effectiveness is the cost per QALY. It is the • An ageist tendency, as QALYs place greater
disease as the world’s top killer by 2010 (ref. approach explicitly advocated by HTA authori- value on years gained earlier in life. This
5). In the United States alone, 560,000 people ties and implicitly endorsed by Fojo and Grady4. imparts an inherent bias toward younger
died of cancer in 2008, making cancer the sec- In simple terms, a QALY incorporates both adults, with longer potential for additional
ond leading cause of death. As such, cancer is a the time by which a new treatment extends a years of good health15.
research and development priority, particularly person’s life and the quality of life the patient
in the United States. Indeed, the United States experiences during that added time. Here, each • And finally, a reliance on data from random-
funds over 60% of global cancer research6. In year of perfectly healthy life is assigned a value of ized clinical trials. Payers seek to carry out
2005, the average amount per capita spent on US 1.0, whereas death is fixed at zero. If each year is HTA studies before products are marketed.
cancer research was seven times greater than in accompanied by some form of burden that is less However, at pre-launch, as well as at the time
the European Union7. than full health, then an intermediate value—a when a first market license is granted, evi-
Although research spending on oncology quality-of-life adjustment factor—is assigned. dence on the full clinical potential is largely
therapeutics is relatively high, the success rate Thus, drug A, which promises an added 10 incomplete, and there will be no actual cost
(that is, the likelihood that a compound enter- years, but has a quality adjustment factor of data for the new product based on normal
ing clinical development will eventually reach 0.5, due to burdensome side effects, produces health system usage.
the marketplace) is comparatively low (8%)8,9. 5 QALYs (10 × 0.5). The cost per QALY indi-
Carefully targeted clinical trial design is par- cates the incremental cost-benefit ratio of drug Cost-per-QALY estimates pertaining to
ticularly vital in oncology research, as is finding A compared with, say, existing drug B. If, for recently approved oncology drugs have tended
the appropriate pool of patients. Both chal- example, drug A costs $50,000 more than drug to be relatively high16. As a result, many cancer
lenges contribute to high development costs. B, its cost-per-QALY equals $10,000. medicines have not met the HTA thresholds.
Moreover, trials often must enroll the sickest The rationale for any form of cost-effective- In fact, between 40% and 55% of oncology
patients, given the potential risks and ethical ness analysis is that it offers an explicit approach medicines approved after 2000 have either been
dilemmas of treating earlier stage, potentially to quantify the costs and benefits of a technology given outright denials or indication restrictions
curable, cancer patients with powerful com- using a common denominator (e.g., a QALY). by three major HTA agencies: UK National
pounds that may have significant or unknown The resulting cost-effectiveness ratios can be Institute for Health and Clinical Excellence
adverse side effects. Relatively high per-unit compared with each other or with a threshold (NICE; London), the Australian Pharmaceutical
prices of new oncology therapeutics are partly value across a wide range of interventions for Benefit Advisory Committee (Canberra, ACT,
a function of high development and produc- different diseases, with the goal of identifying Australia) and the Canadian Common Drug
tion costs. Given the high price per treatment the most efficient way of maximizing health at Review (Ottawa, ON, Canada)16. Moreover, evi-
cycle of most new anti-neoplastic agents, the the population level. In this respect, the QALY dence from a study of NICE recommendations
vast majority of patients must resort to third- represents an average. That is, it does not pre- indicates that of 55 cancer medications assessed
party payment. Public and private payers play dict what an individual might experience, but between May 2000 and May 2008, nearly half
the role of intermediary, evaluating newly describes what one might expect, on average, were rejected for routine use in the UK National
marketed therapeutics, from both a clinical from a whole population. Health Service (NHS) or restricted to a narrow

nature biotechnology volume 28 number 11 november 2010 1161


COMMEN TARY

set of indications17. The latter study classified


NICE decisions as “positive,” “restricted” or Table 1 NICE recommendations on cancer drugs
“negative” before and after a change in NICE Number (percent) of appraisals
appraisal methods in August 2006. The change May 2000 to May 2000 to July 2006 to
entailed an accelerated process for technology October 2008 June 2006 (period 1) October 2008 (period 2)
assessment (Table 1). Classification relates to Positive appraisals 18 (47) 11 (48) 7 (47)
the degree to which routine NHS use is recom- Negative appraisals 5 (13) 1 (4) 4 (27)
mended for all (positive), some (restricted) or Restricted appraisals 15 (39) 11 (48) 4 (27)
none (negative) of the patient groups included All appraisals 38 23 15
in a drug’s registration. The proportion of ‘nega- Adapted from ref. 17.
tive’ appraisals increased from 4% in period 1
to 27% in period 2, reflecting, in part, the fact
that cost effectiveness has become the criterion Furthermore, in terms of overall effectiveness from key stakeholders, NICE is considering
de rigueur. and outcomes of cancer care, the United States the size of the patient population, the degree to
appears to compare favorably to several coun- which end-of-life treatment is targeting patients
Thresholds, price controls and tries with healthcare systems that ration by way with short life expectancy (which implies attach-
restricting off label of cost-effectiveness thresholds. For example, the ing more value to survival gains when life expec-
Although there are opportunity costs associ- five-year, age-adjusted cancer survival rates for tancy is short) and the availability of alternative
ated with spending on, or choosing, marginally the United States and seven European countries treatments. To illustrate, in 2008, NICE declined
© 2010 Nature America, Inc. All rights reserved.

beneficial treatments, we believe that policy show that the United States has superior five- to recommend Sutent (sunitinib) to any patients
recommendations, such as those put forward year survival rates for six different common can- with advanced kidney cancer27. If followed uni-
by Fojo and Grady4, are both problematic and cers20,21. Compared with the United Kingdom, formly by NHS acute and primacy care trusts,
unconstructive for several reasons. for instance, the US five-year survival rate is as is the intended policy, its decision would have
between 25% and 60% higher for breast, thyroid, resulted in blanket denial of care. However, in
The QALY threshold. The majority of newly prostate, lung, colon and cervical cancers. In cer- 2009, after changes in its stated policy on end-
approved cancer drugs would not pass the tain instances, such as non-small cell lung can- of-life treatments, NICE reversed its decision,
arbitrarily chosen renal dialysis QALY thresh- cer and breast cancer, where certain drugs have stating that sunitinib should be a first-line treat-
old, let alone the NICE threshold of ~$50,000 a proven effect on survival, lack of access in the ment option for some patients with advanced or
per QALY. Certainly, some cancer drugs United Kingdom is likely a contributing factor metastatic renal cell carcinoma28.
with cost-per-QALY ratios above $129,000 to lower survival rates. At the same time, access
are worth prescribing, among which may be restrictions may be compounded by prevailing De facto price controls. Some experts also sug-
those that cure a previously incurable condi- nihilism and delayed diagnoses, as patients with gest that drug sponsors impose on themselves
tion, or those that produce prolonged remis- lung cancer, for example, frequently receive no pre-launch price controls. But determining a
sions with minimal toxicity or those that treatment at all in the United Kingdom22,23. drug’s clinical value is something that cannot and
reduce the amount of time a patient spends in In this context, it is important to note that the should not be decided before a drug’s approval.
the hospital. With respect to the latter, costly incremental cost-effectiveness ratios of Tarceva This is what markets do after approval; what’s
medicines could displace in-patient spend- (erlotinib), Avastin (bevacizumab) and Erbitux more, considerable uncertainty is associated
ing, as appears to be the trend in cancer care, (cetuximab) for individuals with advanced with a drug’s real-world effectiveness. Often, a
according to a recent comprehensive study non-small cell lung cancer exceed $129,090 per therapy’s effectiveness becomes apparent only
on cancer spending18. Escalating costs of new QALY. Yet, Medicare and some private US pay- after it has been used in thousands of patients,
cancer drugs are receiving a lot of attention. ers cover these drugs, and they are correspond- rather than the tens or hundreds participat-
However, as a proportion of overall cancer ingly used more in the United States than in the ing in trials. Thus, by introducing a maximum
expenditures, drug spending is only 6% (ref. United Kingdom24–26. price per treatment cycle for a particular can-
18). But more importantly, Fojo and Grady’s In practice, the cost per QALY threshold cer pre-launch, drug developers may consider
policy prescription begs the question, Is limit- delineates a cut-off between technologies pay- the cost-benefit ratio (that is, cost of investing
ing spending to less than $129,090 per QALY ers can afford for all, as opposed to those they in further drug development versus return on
necessarily sufficient to purchase excellent will fund for no one. Indeed, it is the premise of that investment) unattractive. This could result
care? In many instances it is. However, set- the English and Welsh healthcare systems that if in a reduction of innovative drugs entering the
ting thresholds is not a driver of excellent or they cannot afford a new anti-cancer drug for all clinic for that cancer.
even efficient care per se. who might benefit, the drug will not be paid for.
Apart from the theoretical shortcomings of More equity is desirable, particularly a reduc- Off-label practices. Severely restricting off-label
the cost-per-QALY approach listed above, there tion in geographic outcome variation. However, use stands in stark contrast with clinical prac-
are also practical considerations. Studies of pan- is such a radically egalitarian, one-size-fits-all tice. Depending on the drug in question, stud-
European access to, and uptake of, anti-cancer approach warranted? ies have shown anywhere between 4% and 75%
therapies suggest that countries that rely on the Ironically, at a time when some medical off-label use of anticancer agents29. Important
cost-per-QALY approach to inform resource allo- experts are recommending the imposition of benefits are often discovered after a drug is ini-
cation decisions tend to implement more restric- explicit thresholds in the United States, NICE tially approved (that is, the period during which
tions and delays in access19. Owing to the length is moving away from strict reliance on cost many cancer drugs are prescribed off-label). For
of time of appraisals, the HTA process may cause effectiveness and thresholds, allowing for other example, Herceptin (trastuzumab) was initially
delays between the point at which a product is factors to enter the equation, in particular, for approved for end-stage breast cancer; only later
launched and the decision to reimburse. cancer therapeutics. In response to pressure was it discovered to have benefits when used at

1162 volume 28 number 11 november 2010 nature biotechnology


COMMEN TARY

earlier stages of disease. Also, Taxol (paclitaxel) therapies32,33. Yet, the patient may not be able we know and what we do in the provision of
was initially labeled as a second-line agent for to afford treatment, with or without insurance. medicine, CED should rely on alternatives to
ovarian cancer. Now, it is also indicated for A second perspective is that of oncologists, who randomized clinical trials, such as observational
Kaposi’s sarcoma, non-small cell lung cancer may find themselves in the unenviable position studies. Furthermore, to adhere to the tenets of
and breast cancer. A similar story can be told for of having to serve as advocates for their patients’ patient-centric outcomes research, CED should
Gemzar (gemcitabine), Paraplatin (carboplatin) best health interests while being forced to help emphasize personalized (targeted) therapy. In
and numerous other cancer agents. them make decisions about whether the poten- this respect, we believe the recently proposed
Oncology is a clinical specialty where treat- tial clinical benefits warrant the financial burden. CED on pharmacogenomic testing for warfarin
ment urgency drives a high prevalence of exper- A third viewpoint is that of the drug industry, response is a step in the right direction.
imental (that is, off-label) use of drugs beyond which needs relatively unhindered access to
COMPETING FINANCIAL INTERESTS
their approved indications. This does not imply the market and a price that offers a reasonable
The authors declare no competing financial interests.
that evidence should not play a role in establish- return on investment. Capturing that return
ing the value of, or limits to, their uses. Payers provides the basis for future investment in inno- 1. Yabroff, K. & Schrag, D. J. Natl. Cancer Inst. 101,
1161–1163 (2009).
have shown reluctance to reimburse drugs that vation. Drug firms facing price controls may be 2. Institute of Medicine. Crossing the Quality Chasm: A New
are not approved by the FDA on the grounds that reluctant to invest in future innovations (that is, Health System for the Twenty-First Century (National
their use is experimental or investigational30. It they may anticipate effects of price controls and Academy of Sciences, Washington, DC, 2001).
3. Mulcahy, N. Time to consider cost in evaluating cancer
would seem they are justified in requiring that curtail research accordingly) as potential payoffs drugs in the United States? <http://www.medscape.com/
healthcare physicians provide evidential sup- are reduced. A final outlook is that of the payer, viewarticle/705689> (2009).
port, such as peer-reviewed studies, clinical whether public or private, who face a formi- 4. Fojo, T. & Grady, C. J. Natl. Cancer Inst. 101, 1044–
© 2010 Nature America, Inc. All rights reserved.

1048 (2009).
practice guidelines and officially recognized dable challenge in allocating limited resources 5. Anonymous. CDC Faststats (Centers for Disease Control
compendia, for the purpose of off-label use. across many diverse disease areas of acute and and Prevention, Washington, DC, USA) <http://www.cdc.
gov/nchs/FASTATS/cancer.htm> (Accessed, November 1,
chronic medical need. Many seek to evaluate the 2009).
The need to address diverse perspectives broader, population-wide, added value (that is, 6. Eckhouse, S., Lewison, G. & Sullivan, R. Mol. Oncol. 2,
In a recently published polemic in favor of cost-effectiveness) of cancer drugs. Rationally, 20–32 (2008).
7. Eckhouse, S. & Sullivan, R. PLoS Med. 3, e267
explicit rationing, the controversial utilitar- they have to determine what can be paid for. In (2006).
ian philosopher Peter Singer posits, “You have this respect, they must be mindful of interven- 8. DiMasi, J. & Grabowski, H. J. Clin. Oncol. 25, 209–216
advanced kidney cancer. It will kill you, prob- tions that may have to be forgone—opportunity (2007).
9. Reichert, J. & Wenger, J. Drug Discov. Today 13, 30–37
ably in the next year or two. [Sunitinib] slows costs—in other disease areas if rising numbers (2008).
the spread of the cancer and may give you an of expensive cancer drugs are to be provided to 10. Teutsch, S., Berger, M. & Weinstein, M. Health Aff. 24,
128–132 (2005).
extra six months, but at a cost of $54,000. Are a growing patient population. 11. Gafni, A. & Birch, S. Soc. Sci. Med. 62, 2091–2100
a few more months worth that much?... Is there (2006).
any limit to how much you would want your A more balanced solution? 12. Raftery, J. J. Eval. Clin. Pract. 5, 361–366 (2001).
13. Nord, E. Med. Decis. Making 15, 201–208 (1995).
insurer to pay for a drug that adds six months We do not hold a binary view on resource 14. Cohen, J. J. Med. Ethics 22, 267–272 (1996).
to someone’s life?”31 The answer is probably allocation—the choice is not to ration in accor- 15. Tsuchiya, A. Health Econ. 9, 57–68 (2000).
yes. Surely, limited resources require that soci- dance with CER-constructed cost-effectiveness 16. Clement, F., Harris, A. & Jing Li, J. J. Am. Med. Assoc.
302, 1437–1443 (2009).
ety address what counts as a benefit, the extent thresholds or allow unfettered access. Rather, 17. Mason, A. & Drummond, M. Eur. J. Cancer 45, 1188–
to which cost should factor in deliberations and we maintain that there are more constructive 1192 (2009).
18. Tangka, F.K. et al. Cancer 116, 3477–3484 (2010).
who should be involved in those decisions. But, CER-based approaches to priority setting for 19. Jonsson, B. & Wilking, N. Ann. Oncol. 18 Suppl 3, iii2–
the key questions then are, Who decides on such oncology therapeutics, such as CED, in which iii7 (2007).
limits and how are limits determined? reimbursement is linked to requirements for 20. Verdecchia, A. et al. Eur. J. Public Health 18, 527–532
(2008).
There is room for building a more system- further clinical research34. Here, CED generates 21. Gatta, G. et al. Cancer 89, 893–900 (2000).
atic and better coordinated evidence base in data to be used as the basis for future coverage 22. Verdecchia, A. et al. Lancet Oncol. 8, 784–796
the United States for both labeled and off-label decisions, which implies the possibility of dis- (2007).
23. Schiller, J. Clin. Cancer Res. 11, 5030s–5032s
use. Accordingly, CER could help close the gap continued reimbursement if findings indicate (2005).
between what we know and what we do in phar- lack of comparative (cost) effectiveness. CED is 24. <http://info.cancerresearchuk.org/news/archive/
cancernews/2009-11-03-Lung-cancer-experts-call-for-
maceutical care. Here, CER should involve gen- often considered in cases where a medicine is improvements-in-NHS-care>
uinely participatory decision-making among all initially evaluated as not cost effective, whereas 25. Cohen, J., Cairnes, C., Paquette, C. & Faden, L. J. App.
relevant stakeholders, which entails a complex- medical (unmet) need is high. Health Econ. Health Pol. 5, 177–187 (2006).
26. Cohen, J. & Wilson, A. mAbs 1, 56–66 (2009).
ity perhaps overlooked by Fojo, Grady, Singer Where appropriate, CED could be combined 27. Anonymous. NICE Guidance (National Health Service,
and other advocates of a hard-nosed, utilitarian with risk-sharing arrangements, in which drug London) <http://guidance.nice.org.uk/TA169> (Accessed
approach to CER implementation using cost- makers and payers agree to relate a product’s November 1, 2009).
28. Anonymous. Pfizer’s sutent is recommended as first-
effectiveness thresholds. CER must take into future performance to its price, revenue stream line treatment for kidney cancer patients by British
account the different (sometimes conflicting) or reimbursement. As such, CED may serve to health agency. <http://www.medicalnewstoday.com/
articles/138010.php> (2009).
perspectives among the primary stakeholders reconcile the tension between developing evi- 29. Leveque, D. Lancet Oncol. 9, 1102–1107 (2008).
in cancer care: patients, oncologists, the phar- dence-based policies and being responsive to 30. Cohen, J., Wilson, A. & Faden, L. Food Drug Law J. 64,
maceutical industry and payers. product developers, physicians and patients. 391–403 (2009).
31. Singer, P. Why we must ration health care. New York
The first perspective is that of a terminally Using the time-honored randomized clinical Times Magazine (July 19, 2009).
ill cancer patient, who often places a very high trial methodology, Medicare has already imple- 32. Leighl, N., Tsao, W., Zawisza, D., Nematollahi, M. &
value upon extending the years, months or even mented at least ten CED programs, including Shepherd, F. Lung Cancer 51, 115–121 (2006).
33. Markman, M. J. Oncol. Pract. 4, 262 (2008).
days of good quality life he or she has remaining, the off-label use of colorectal cancer drugs. 34. Mohr, P. & Tunis, S. Pharmacoeconomics 28, 153–162
with a high willingness to pay for new cancer However, to truly close the gap between what (2010).

nature biotechnology volume 28 number 11 november 2010 1163

You might also like