"It is extremely chilling if, after spending a huge sum of money, time and effort to get a drug through FDA approval, you'll then have to go through it all again to see if CMS will pay for it," said Allen S. Lichter, head of the American Society of Clinical Oncology. "Firing a shot across the bow like this is not the way to have an intelligent and meaningful discussion about how we start to address the complex issue of drug costs."The specific reference is to Medicare's re-evaluation whether or not the new prostate cancer vaccine, Provenge, should be reimbursed at the rates set by the company. The story elucidates that in the trials the vaccine increased median survival with advanced prostate CA by an average of 4 months at a cost of $93,000. Now, compared to Tarceva for advanced pancreatic CA, this is a bargain! But can we afford such a bargain? Furthermore, can we afford such highly placed leaders as Allen Lichter to be so deluded about the value of a therapy that he does not want the Centers for Medicare and Medicaid Services even to have an open discussion about this cost-benefit balance? Really?
Well, let's do the accounting. The WaPo article cites the incidence for prostate CA at 192,000 annually in the US. Let us say that 1/3 of them qualify for Provenge, or 64,000. Treating all of them with Provenge will incur a $5.9 billion aggregate bill. Now, the company did allegedly spend approximately $1 billion on development of the drug. But what does that matter to all of us, free market believers? It is not the company expenditures that should drive the price we are willing to pay, but the value of the medication.
Now, value is a tricky thing. Value is extremely sensitive to perspective. If I am the patient with advanced prostate CA, the price tag may appear reasonable to me. However, if I am an administrator charged with equitable distribution of a limited resource, particularly in the setting of very few workers maintaining the cash flow for each senior in the Medicare program, I am acutely sensitive to the inflated cost-benefit ratio for this drug. So, how do we resolve this tension without resorting to name calling and shouting and accusations of death panels? Should we encourage our citizens to start thinking not only of their individual risks, but also of the real risks to their communities posed by such indiscriminate use of a therapy that is only marginally useful to them personally?
Another way for companies themselves to trouble shoot these situations is to gain a better understanding of what a patient who is likely to have a good response looks like. In fact, we should demand such risk (well, in this case benefit) stratification, so that a clinician can make rational choices with the patient and avoid false hopes or equally false nihilism. Granted, the pool of eligible patients may shrink, but what a way to insure appropriate and responsible use of a resource.
I realize that my suggestions may fall on deaf ears. And although, whenever I give talks on this stuff, the medical people representing the Industry nod wildly, marketers who tend to run pharma are not thrilled. Instead of understanding that limiting use of their technologies to appropriate patients is a sound long-term strategy to preserve the value of their assets, they prefer to put the drug into any person remotely resembling those that qualify, in their race to maximize short-term profit. And this is why lobbyists and famous men with loud reputations are hired as surrogates to promote the message of indignation. And the public, sold on the entitlement idea, simply applauds like a well-trained seal and parrots the absurd logic.
So, under these assumptions, it of course becomes "chilling" for the biggest healthcare payer in the land, the payer that is responsible for paying nearly 1/2 of all the healthcare costs, to be critical of the value proposition of a new therapy. Perish the thought that CMS should be making these decisions for our limited tax dollars. Perish the thought that we should engage in a discussion about these issues based on something other than politics.
Given the erroneous idea that the Republicans' House victories say anything about us other than our wildly absurd expectations, I predict that death panels and mammography "debate" were only the beginning. Expect even more politics, rancor and pandering in the current political climate, and expect that the culture of "me, me, me" will be reaching fevered pitch. It is too bad that this conversation will continue to obfuscate the real issues and much needed solutions to a real crisis of not only our healthcare, but indeed our citizenship.