Tuesday, December 8, 2009

An executive articulates the value of his drug

Allos Therapeutics is a small biopharmaceutical company located in Westminster, Colorado, with a single agent on the market. Pralatrexate, brand name Folotyn, is a small molecule therapy for a rare and aggressive hematologic malignancy peripheral T-cell lymphoma. The recently FDA-approved drug is stirring controversy by, you guessed it, pricing itself out of the market. The pricing giants at the company decided that a fair price for the drug, achieving parity with other compounds in the space and helping them recoup their investment, would be $30,000 per month.

In the area of cancer, such a price tag is certainly nothing unusual. Here, fancy and expensive-to-produce biologic therapies can run as high as $100,000 annually to treat such common cancers as those of the lung, breast and colon, even while only prolonging the patient's life by an average of 2 months. But here is the kicker: pralatrexate is not a biologic, but a small molecule, and not even first in class! So, essentially, it is a me-too drug that is not particularly expensive to manufacture.

But let's give the company the benefit of the doubt -- after all, clinical development, especially in a rare cancer, is prolonged, costly and generally resource-intensive. A few more pieces of the puzzle are in order before we can make the final judgment. The drug was approved based on a trial of 115 patients with recurrent PTCL refractory to, on average, 3 prior therapies. The outcome evaluated was a combined endpoint of complete response or complete response unconfirmed or partial response (each indicating degrees of tumor shrinkage). Among the 111 evaluable patients the response rate was 27%, and the median duration of response was 9 months (meaning that one-half of the 29 responders progressed by 9 months). And the median duration of use of the product in the trial was 70 days.  

So, let's do the math here: if 100 patients are prescribed this drug for 70 days (this is being conservative, as the median is usually lower than the mean value in similar distributions) at a cost of $30K per month, we have spent $7,000,000 to get a response in 27 patients that lasts under 1 year, or about $333,000 per year of life saved. So, this may be less reasonable in some books than others. Hmmm...

Well, in case you you have any shred of doubt remaining, look at what James Caruso, the Chief Commercial Officer for the company, is quoted as saying:
Patients, moreover, are likely to use the drug for only a couple of months because the tumor worsens so quickly, he said. So the total cost of using Folotyn will be less than for many other drugs with lower monthly prices.
So, the message is that our expensive drug should be used not because it saves lives, not because it improves quality of life, but because the expense will be limited by the its uselessness? Isn't is a little bit like saying that a gas-guzzling HUM-V is worth the expense because it will break down in two months anyway? I have to admire the manufacturer in speaking the truth this way: if more manufacturers do this, comparative effectiveness concept will become obsolete before it is even legislatively approved.  

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