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March 30, 2009

Efficacy Does Not Necessarily Translate to Cost Effectiveness: A Case Study in the Challenges Associated With 21st-Century Cancer Drug Pricing

Publication: Journal of Clinical Oncology
All countries are struggling with the financial burden associated with cancer and its treatment. Worldwide, drugs associated with cancer care are estimated to cost approximately $40 billion per year. In the United States, cancer drugs represent the second biggest category of overall pharmaceutical sales, growing at double the overall market; in 2007 alone, sales increased by approximately 14%. Seventy percent of these sales come from products introduced in the last decade and 30% in the last 5 years.1 Currently, there are about 100 new molecules in phase III trials. Remember that figure—100 new molecules.
While Journal of Clinical Oncology (JCO) predominantly focuses on clinical advances, its readership and its editorial team are increasingly aware that economic evaluations have an important role in contributing to the overall evolution of cancer care. In this issue of JCO, Reed et al2 report a cost-effectiveness analysis based on a randomized trial previously reported in JCO that assessed ixabepilone plus capecitabine (I + C) compared with capecitabine alone for patients with metastatic breast cancer progressing after anthracycline and taxane treatment. Herein, we try to interpret this report in light of the recent JCO editorial guidance.3
The first question is whether a clinical question is important, relevant, and timely. We believe the answer for I + C is a resounding yes. This is another advance in treatment for patients with metastatic breast cancer, joining the taxanes, aromatase inhibitors, and targeted therapies. The rapid adoption of these therapies by cancer providers shows successful translation from effectiveness in the research setting to efficacy in the wider general population. Overall survival in patients with metastatic breast cancer is increasing. In British Columbia, overall survival improved from approximately 14.5 months for those diagnosed in 1991 to approximately 22 months for women diagnosed in 2001.4 Further increases are likely given the near-universal use of taxanes. While advanced breast cancer is not curable, many oncologists are suggesting that it should be considered a chronic disease, with patients potentially rotating thorough five or more types of treatment.5
Managing breast cancer as a chronic disease is both complex—especially when prior adjuvant therapies is considered—and expensive. For hormone receptor–negative or refractory human epidermal growth factor receptor 2–negative disease, the National Comprehensive Cancer Network preferred regimens include nine different single agents and nine different combination therapies.6 Despite these initial options, most patients and their oncologists have narrower choices if further therapy is considered after prior treatment with anthracyclines and taxanes. For this situation, if treatment is offered, practice guidelines in the United States, Canada, and Britain all agree that single-agent capecitabine is the preferred therapy.68 Therefore, adding a drug like ixabepilone might help.
Select clinical features and efficacy results from the reported randomized controlled trial of I + C are noteworthy: patients were young (median age, 53 years), had good performance status, and the treatment was second line in approximately 50% and third line in 40%. Eighty-five percent of patients had received taxanes for metastatic disease, and in approximately 40%, progressive disease was the best response to prior taxanes.9,10 The primary end point of progression-free survival improved by a median of 1.6 months (n = 752) in the registration trial9,10 and 1.5 months (n = 1,221) in the confirmatory trial.11 Overall survival increased by 1.8 and 0.8 months, respectively, but these were not statistically significant even in light of their sample sizes, and these data have only been only in abstract form.
There are numerous strengths to the design, technical components, and data quality in the economic assessment.2 The investigators were academics not involved in the conduct of the trial, had negotiated full control of the design and reporting of the analysis, and had developed their analysis plan before trial completion. The investigators had access to patient level information relevant to medical resource use while on trial and some data after active treatment. Lastly, the economic analysis includes information excluded from the randomized clinical trial report on patient quality of life. The Health Utility Index is a widely use quality-of-life instrument to estimate the value of life in various health states.12 Therefore, different rates of costs and utility values were assigned to patients based on four levels of response to therapy.
For the economic analysis, the investigators had to use a variety of survival projections since the data available was censored at the point of last follow-up (January 2007), and 36% of patients were alive. This common practice of a drug sponsor not sharing the most recent or complete data made modeling necessary and led to a less transparent report. In the model, Reed et al2 estimated an overall survival benefit of 2.0 months; this may be an overestimate by at least 10%. The authors did not account for the 17% of patients in the I + C arm who got filgrastim, which would add hundreds of dollars per treatment cycle, further increasing the cost-efficacy (CE) ratios.
In sum, the efficacy data show that I + C increased objective response rates, progression-free survival but not definitively overall survival. But the economic analysis led to incremental cost-effectiveness ratios of approximately $200,000 per life year and approximately $360,000 per quality adjusted life year (QALY). To many, these ratios of costs and benefits reflect minimal added value.
The dramatic increase of the CE ratio when quality-of-life scores (utilities) are added requires an explanation. Quality of life (utilities) should improve if the symptoms of cancer improve more than the added toxicity of the drugs. In this case, patients with a partial response to combination therapy had quality-of-life scores that were substantially lower (0.67) than those on capecitabine (0.77). This largely contributed to reducing the benefit from 2 months in overall survival to about 1 month in quality-adjusted survival. This is consistent with the extensive literature showing less toxicity and superior quality of life of sequential monotherapy compared with combination therapy for advanced breast cancer.13,14
Should society (or insurers) pay for this drug at the current price? That depends. First, it is common knowledge that in the United States, Medicare does not explicitly use CE data, nor by inference a threshold, in its approval process.15 Commercial and state Medicaid plans are reluctant to use formal cost-effectiveness analyses even though almost all use costs in some form when evaluating new interventions.16 However, by ignoring costs, we are not only spending money on actions that may not help much, we are also reducing care quality because we may inevitably deny someone else another type of care. Second, if a threshold (a line in the sand) is used what number should it be? The $50,000 per QALY line, while widely used based on the decision to use public funds to pay for dialysis, needs to be inflation adjusted to current dollars. The 1982 valuation is equivalent to $197,000 per QALY in 2007 dollars after adjusting for the 5.5% average 1982 to 2007 healthcare inflation, or $126,000 if the overall inflation rate is used.17 An alternate threshold is WHOs guidance that a multiple of a country's per capita gross domestic product be used18,19: ≤ one times per GDP as very cost effective, one to three times as cost effective, and more than three times as cost ineffective. The United States three-times threshold is $140,100 (2008).20 A recent intriguing report made estimates by aggregating data of modern (2003) compared with premodern era (1950) medical care in the United States.21 Braithwaite et al21 estimated that modern health care is responsible for 53% of decline in mortality between 1950 and 2003, has added 4.7 years to life expectancy, has increased lifetime care costs by approximately $452,000, and has derived a incremental CE ratio of $183,700 per life year ($109,000 to $204,000 per QALY). Each of these approaches leave us with a firmer, if higher, foundation under a cost-effectiveness acceptability threshold line between $140,000 and $200,000 per QALY.
Regardless of methodology, ixabepilone only becomes cost effective if its current price is reduced by half (if we accept $200,000/QALY as acceptable). Even if the price is reduced by half, total treatment costs would still increase by more than 100% because the treatment is added to the current armamentarium. The easiest way to improve cost effectiveness is to cut the price. The CE ratios will also change by restricting ixabepilone use to patients with the best chance of response, such as those without any prior metastatic chemotherapy (hazard ratio = 0.5) or patients previously responding to taxanes. The CE ratios would be even higher if growth factors are used as they were in 17% of patients receiving I + C.
The price of ixabepilone represents a 250% increase over capecitabine alone and, to our minds, can be justified only by following a logic of pricing other new cancer approvals independent of the absolute or duration of benefit, clustering between $5,000 to $7,000 per month (Table 1). Profiteering, the act of making a profit by methods considered unethical, such as raising prices after a natural disaster, is a pejorative term that we believe can be applied to this recent trend where a life-threatening disease is the natural disaster. Inequalities of cancer care can only be expected to widen as the US health care system further evolves into three groups: the uninsured, the underinsured, and the well off.
Table 1. Current US Prices for Select Cancer Drugs Approved Since 2004 (except where noted)
Cancer Type2008 Wholesale Price per 28- or 30-Day Course
> $10,000$5000 to $10,000$3000 to $5000$1000 to $3000
  (Docetaxel* monotherapy)Capecitabine monotherapy(Paclitaxel weekly monotherapy)
  Protein-bound paclitaxelTrastuzumab monotherapy 
Chronic leukemias Bendamustine  
Renal SorafenibTemsirolimus 
Other cancersLenalidomideNelarabineErlotinib 
Docetaxel was approved in 1996, and US patent expires in 2010.
Generic paclitaxel has been available since 2000.
No one really objects to a home-run drug like imatinib for chronic myelogenous leukemia; the only question becomes how to pay for it.22 The much stickier issue will be drugs that add a small benefit at a high cost, such as ixabepilone. We think advocacy groups should be rallying for reductions in price when drugs do not work that well. Even if we cannot influence the price, as oncologists we have to discuss these issues with our patients.23
To date, it appears that oncologists are unconvinced about the benefits of ixabepilone. Quarterly sales have not increased at all through the first three quarters of 2008 (approximately $25 million worldwide per quarter).24
Ixabepilone offers women with anthracycline and taxanes—resistant breast cancer a new option. However, its pricing combined with its modest benefit in improving progression-free survival with a possible, yet uncertain, survival benefit and a diminished quality of life on therapy led to incremental CE ratios that are above most commonly used reference thresholds. Economic analyses such as Reed et al's2 contribute one piece to the complex decisions faced by public payers and women confronting new developments in breast cancer care. Remember those 100 molecules in phase III trials—we will have to make some hard choices about alternative uses of public funds if we accept paying $31,000 for 1 month of QALY.


Supported in part by a Research Scholar Grant No. for Health Services, Health Policy, and Outcomes Research (RSGHP-04-003-01-CPHPS) from the American Cancer Society (BEH) and GO8 LM0095259 from the National Library of Medicine (TJS) and R01CA116227-01 (TJS), from the National Cancer Institute.

Authors' Disclosures of Potential Conflicts of Interest

The author(s) indicated no potential conflicts of interest.


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Published In

Journal of Clinical Oncology
Pages: 2111 - 2113
PubMed: 19332715


Published online: March 30, 2009
Published in print: May 01, 2009


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Bruce E. Hillner
Department of Internal Medicine and the Massey Cancer Center, Virginia Commonwealth University, Richmond, VA
Thomas J. Smith
Department of Internal Medicine and the Massey Cancer Center, Virginia Commonwealth University, Richmond, VA

Author Contributions

Conception and design: Bruce E. Hillner
Collection and assembly of data: Bruce E. Hillner
Data analysis and interpretation: Bruce E. Hillner
Manuscript writing: Bruce E. Hillner, Thomas Smith
Final approval of manuscript: Bruce E. Hillner, Thomas Smith

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