How Much Is a Few Months of Extended Life Worth

How much is a few months of extended life worth?

If we had government-funded health care (and we do for Medicaid, Medicare, the VA, and members of Congress), should we pay for expensive drugs like this? If so, are you willing to pay your share through higher taxes or higher insurance premiums? If not, are you okay with not getting the drug to extend your own life should you ever need it?

What other ethical questions does this article raise? Is NICE (the British system described in another article) the answer?

New York Times

February 15, 2006

A Cancer Drug Shows Promise, at a Price That Many Can't Pay

ByALEX BERENSON

Doctors are excited about the prospect of Avastin, a drug already widely used for coloncancer, as a crucial new treatment for breast and lung cancer, too. But doctors are cringing at the price the maker,Genentech, plans to charge for it: about $100,000 a year.

That price, about double the current level as a colon cancer treatment, would raise Avastin to an annual cost typically found only for medicines used to treat rare diseases that affect small numbers of patients. But Avastin, already a billion-dollar drug, has a potential patient pool of hundreds of thousands of people — which is why analysts predict its United States sales could grow nearly sevenfold to $7 billion by 2009.

Doctors, though, warn that some cancer patients are already being priced out of the Avastin market. Even some patients with insurance are thinking hard before agreeing to treatment, doctors say, because out-of-pocket co-payments for the drug could easily run $10,000 to $20,000 a year.

Until now, drug makers have typically defended high prices by noting the cost of developing new medicines. But executives at Genentech and its majority owner, Roche, are now using a separate argument — citing the inherent value of life-sustaining therapies.

If society wants the benefits, they say, it must be ready to spend more for treatments like Avastin and another of the company's cancer drugs, Herceptin, which sells for $40,000 a year.

"As we look at Avastin and Herceptin pricing, right now the health economics hold up, and therefore I don't see any reason to be touching them," said William M. Burns, the chief executive of Roche's pharmaceutical division and a member of Genentech's board. "The pressure on society to use strong and good products is there."

Studies show that Avastin can prolong the lives of patients with late-stage breast and lung cancer by several months when the drug is combined with existing therapies. Genentech expects to seek federal approval later this year to sell it specifically for those diseases. But even now, doctors, who are free to prescribe the drug as they see fit, are using Avastin for some breast and lung cancer cases — and finding its cost beyond the means of some patients.

"Avastin is a superb drug, but its cost is already discouraging patients and doctors from using it," said Dr. David Johnson, who heads the cancer unit at VanderbiltUniversity and is a former president of the American Society of Clinical Oncology. "I wish it were one-tenth the cost, and if it were I would be giving it to almost everybody."

With colon cancer, a year of Avastin treatment costs about $50,000. But the drug will be used at higher doses for lung andbreast cancer, and Genentech does not plan to reduce the unit price, even though the additional cost of producing a higher dose is minimal. Roche executives described the pricing plans were described in a recent interview.

Because Genentech is a leading developer of cancer therapies, some doctors also fear that the company's pricing plans for Avastin — around $8,800 a month — may encourage other companies to charge more for their own oncology drugs. That could potentially drive up the overall cost of cancer treatment to unsustainable levels, they say.

Right now, one of the few cancer drugs with a higher monthly price than the level planned for Avastin is Erbitux. The drug, used for colon cancer, sells for $9,600 monthly, but is not as widely prescribed as Avastin and is typically used only as a last-resort treatment for a few months.

Dr. Susan Desmond-Hellmann, the president of product development of Genentech, which is based in South San Francisco, Calif., said that Genentech had set Avastin's price based on "the value of innovation, and the value of new therapies." Genentech, which had more than $6 billion in sales last year, has many programs to help patients afford its medicines, and last year contributed $21 million to charities that help patients with their insurance co-payments, she said.

Genentech intends to file an application later this year with the Food and Drug Administration to expand the drug's label to include treatment for breast and lung cancer. While nothing stops doctors now from prescribing Avastin for those diseases, F.D.A. approval would let the company promote and advertise it for such treatments and make insurers more likely to pay for the treatments.

For now, insurers are deciding case by case whether to cover Avastin for breast and lung cancer, and in many instances they are rejecting coverage or at least delaying decisions.

"Insurers may say, 'It's not approved for that indication, so we're not paying for it,' " said Dr. Paul A. Bunn Jr., the director of the University of Colorado cancer center.

In those cases, patients must sign a waiver agreeing to reimburse the hospital for the price of treatment if the insurer will not agree to do so. And some patients are afraid to sign the waivers, Dr. Bunn said. "A couple of patients have refused to sign or take treatment."

So far, insurers are generally covering Avastin's use in colon cancer, and they say they will probably cover its F.D.A.-approved use with other cancers.

Other medicines as expensive as Avastin are typically prescribed only for rare conditions affecting small numbers of patients, and their makers justify the costs as necessary for getting a return on their up-front investments in the drugs. A few medicines, like Ceredase, a treatment for Gaucher disease (pronounced go-SHAY) from the biotechnology company Genzyme, can cost as much as $500,000 a year for some patients. Gaucher disease is a rare metabolic disorder whose symptoms includeanemia.

Avastin is currently used mainly in cases of late-stage colon cancer, a disease that affects about 50,000 Americans annually. On average, those patients take the drug for 11 months and it extends their lives an average of 5 months, compared with other treatments.

Genentech and Roche are also testing Avastin for use in earlier stages of colon cancer, lung and breast and cancer, which collectively are diagnosed in almost 500,000 Americans a year. Genentech and doctors hope that if the drug is used earlier in treatment it can extend lives much longer — although that would require patients' finding the means to pay for it longer, too.

Earlier this week Roche stopped recruiting patients for one clinical trial that included Avastin, while researchers try to explain the deaths of several patients. But doctors generally view Avastin as one of the safest cancer treatments. About 200 clinical trials including Avastin are taking place worldwide.

With Avastin's expanded use, analysts expect the drug's sales to soar to $7 billion in the United States alone by 2009, compared with $1.1 billion last year. Over the same period, Genentech's overall profits are forecast to triple, to $4 billion in 2009, as sales — $6.6 billion last year — climb to $18 billion.

"They are certainly blazing new ground with the price of the drug," said Geoffrey C. Porges, an industry analyst at Sanford C. Bernstein & Company. "They're saying, we think this is fair value, at least on a relative basis."

Genentech has always been aggressive in pricing its therapies, Mr. Porges said. But insurers and government agencies have eventually accepted Genentech's terms, because its treatments, which include Herceptin, its current breast cancer treatment, have been shown to prolong life.

When they were originally discovered, drugs like Avastin, which aim at the blood vessels thattumorsuse to grow, were expected to replace traditionalchemotherapy, which directly fight tumor cells. Instead, the drugs have been found to work best when used in conjunction with chemotherapy. That has caused the overall cost of cancer treatment to soar, said Dr. Len Lichtenfeld, deputy chief medical officer of the American Cancer Society.

"The financial resources are not limitless," he said. "There are tremendous pressures on the cost of cancer therapies today."

The high prices are especially discouraging for patients who have been told that the new drugs may have only marginal benefits for them.

Ellis Minrath, who has pancreatic cancer, said he had chosen not to take Tarceva, a drug from Genentech that is approved for lung cancer and has shown promise in pancreatic cancer. He did so after learning that it would cost him about $1,000 a month in co-payments, even though he is covered by Medicare.

"If anybody came out and said, 'By God, this is the stuff. You want to get well, find a way to buy it,' that would be one thing," said Mr. Minrath, who is 87. "But that isn't the case. The forecast of how much it's going to do is not that wonderful."

But Dr. Desmond-Hellmann, the Genentech product development chief, said she would recommend that Mr. Minrath be treated with Tarceva. "I don't think any patient should go without a Genentech drug for an inability to pay," she said. "If this is about money, that would disturb me."

The higher cost of using Avastin in breast and lung cancer, compared with colon cancer, is a result of cancer drugs' being priced on the basis of weight. In colon cancer, Genentech tested Avastin at a dose of 5 milligrams of the drug per kilogram — or 2.2 pounds — of the patient's body weight. But in lung and breast cancer, the company tested the drug at a dose of 10 milligrams per kilogram of body weight.

Because the actual cost of producing Avastin is a fraction of what Genentech charges for it, some analysts and doctors had expected the company to lower Avastin's price per milligram for use in lung and breast cancer.

Dr. Leonard Saltz, an oncologist at MemorialSloan-KetteringCancerCenter in New York, noted that Genentech had not tested the Avastin at the dose level for colon cancer in large-scale trials of lung and breast cancer. As a result, no one really knows whether the lower dose might turn out to be equally effective in lung and breast cancer, he said. Besides costing less, he said, a lower dose might have fewer side effects.

"There are no meaningful data to allow us to address that question," he said.

Dr. Desmond-Hellmann said that Genentech was assuming that some cancer doctors might, in fact, use Avastin at the lower dosage to treat breast and lung cancer. That is a reason the company does not want to lower Avastin's per-milligram price, she said, because doing so would cut too deeply into revenues if doctors do not prescribe the higher doses that were used in the breast and lung cancer trials.

"We don't actually know whether physicians will actually use Avastin as was used in the clinical trials," she said.

But Dr. Saltz and other doctors said that they would almost certainly stick to the higher Avastin dose that was tested in the clinical trials, for fear that a lower dose might not be as effective.