The cancer research community and the patients it serves took heart a few weeks ago from the Food and Drug Administration's approval of two new drugs -- Avastin and Erbitux. These are antibodies, similar in structure to the infection-fighting proteins that circulate in our blood. Neither is very effective when used alone, but in combination with other chemotherapy drugs, they can shrink tumors, restrain tumor growth and, in the case of Avastin, extend life by a few months in some patients with colon cancer that has already spread to other parts of the body.
There is just one big problem: Both drugs have been marketed at such extraordinarily high prices that many people will simply not be able to afford them.
Although the new drugs help only a minority of patients, they represent significant successes in translating new molecular knowledge about cancer into more effective treatment. In this respect they join other recent entries in the oncologist's medicine cabinet and are a sign of things to come. Most of us anticipate that truly successful treatment for disseminated cancers will be not with single drugs but with combinations of them, aided by precise molecular testing to guide selection of the most effective drugs for a particular patient.
Now back to the economics. The average wholesale price (AWP, or the average price charged to hospitals and physician practices) of a month of treatment for a normal-size adult is roughly $4,800 for Avastin and $12,000 for Erbitux. Since most colorectal-cancer patients for whom these drugs are medically appropriate receive them not singly but in combination with other chemotherapeutics, the monthly AWP is more like $11,000 for combinations including Avastin and $16,000 for Erbitux. Providers pass these costs on to patients, along with charges that cover the costs of pharmacy and dispensing. Courses of treatment generally last several months, but they can be much longer for patients who respond favorably. In other words, the cumulative cost of treatment can be astronomical.
Access to affordable prescription drugs has been the focus of acrimonious national debate, controversial legislation and regulatory muscle-flexing by the FDA, which opposes, for safety reasons, the importation of prescription drugs from cheaper foreign markets. These new cancer drugs will add fuel to the fire. Although the uninsured and medically indigent may feel the effects of these pricing decisions most keenly, those with insurance will also face a nasty dilemma. The increasing co-pay percentages of most plans and the capping of benefits in others will compel a major financial outlay for those determined to have the treatments. And those who do not want their families to assume the financial burden will be left with bitter resentment.
Third-party payers will not react passively to pricing that increasingly threatens their balance sheets, especially as more drugs like these are commercialized over the next few years. They will carefully scrutinize all proposed uses of expensive new drugs. Historically, an FDA judgment of "safe and effective" -- the statutory criterion for drug approval -- has almost automatically triggered an agreement by payers to reimburse, which is the real gateway to widespread use and market success. We may now see payers deciding, for the first time, that certain novel "safe and effective" medicines are simply not worth paying for. In addition, payers will surely try to limit "off-label" uses of these drugs -- that is, uses other than the FDA-approved ones. Unlike other areas of medicine, physicians have commonly prescribed cancer drugs for a broader array of indications than specifically approved by the FDA, as clinical research routinely reveals additional uses after market introduction. A very high bar to new uses by payers is a virtual certainty.
As desperate cancer patients and their advocacy groups feel critical options narrowing, they will make their sentiments known. When they do, the same members of Congress who incomprehensibly prohibited Medicare from negotiating prices with drug companies will be predictably shocked to find that new drugs cost so much. Congressional committees will hold hearings. Tearful cancer patients and surviving family members will tell their stories to an attentive national audience. Lawmakers will also learn this lesson closer to home, where they will find their own sisters and cousins and aunts in the same boat as everyone else.
The pharmaceutical industry will intone its familiar mantra: The cost of drugs is a relatively small percentage of total health care costs; innovation requires investment; research-based companies need to realize an adequate return on investment; and companies often establish access programs for destitute patients. But these arguments are invalidated by the sheer magnitude of the pricing decisions, which constitute a formidable barrier to the flow of innovation from the research arena to public benefit.
Perhaps their legendary political clout in Washington has convinced drug companies that they can price their goods at arbitrarily high levels. In reaching the stratosphere, however, they are effectively daring the government to impose price controls. This the government must do if the drug industry fails to come to its senses quickly.
The writer is physician in chief at the Memorial Sloan-Kettering Cancer Center in New York.