The value and the cost of drugs used in the treatment of cancer are back in the news again this week … and not just here in the USA, either.

In the most recent issue of the Mayo Clinic Proceedings, Drs. Hagop Kantarjian and Vincent Rajkumar published an article entitled, “Why are cancer drugs so expensive in the United States, and what are the solutions?

The idea that drugs for the treatment of cancer are significantly more expensive here in the US than they are in other countries is hardly a new one, and Dr. Kantarjian has been a prime mover behind US-based physician initiatives to find ways to curb these costs in the interests of patients. The complexities of this issue are many, and they involve such nebulous concepts as hope; care; the importance of individual life; the right to seek and obtain treatment for deadly disorders (however effective and safe such treatments may be); and quality of life … as well as such fine American concepts as profitability; ROI; the free market; and other business-related values. Your current author holds little hope that we will find simple and satisfactory solutions to the complexities of the costs of cancer care in the next 12 months!

However, at the same time, a furore has also broken out in Australia, where a government agency that normally operates quietly behind closed doors has made some fairly aggressive public statements related to the prices and value of oncology drugs. The Pharmaceutical Benefits Advisory Committee (PBAC) has apparently complained publicly — as part of a government inquiry — that “some companies push costly cancer drugs which add little to a patient’s life expectancy.” The PBAC also went on to suggest that some biopharmaceutical companies use

the timing of their submissions to the PBAC as a wedge to maximise their chances of approval by, for example, submitting an application for a government subsidy before the regulator has approved it for use.

In other words, some pretty senior people in the PBAC, down under in Oz, seem to have come to the conclusion that many drugs used in the management of cancer aren’t actually worth what they cost, and that the marketing tactics used by some manufacturers in seeking to get the Australian government to cover the costs of these agents are rather less than 100% kosher!

The basic business model used by the global biopharmaceutical industry worked extremely well for many years — even well into the 1990s. However, in recent years we have seen this business model being questioned to a much greater degree and on a much more regular basis. We have noted this before, but it is becoming very clear, very fast that some serious re-thinking of the business model is needed.

Kantarjian and Rajkumar quote a well-known statement by George W. Merck, once the president of Merck & Co., who said that “Medicine is for the people. It is not for the profits.” That statement may seem idealistic today, and it may have contained just a touch of hyperbole even when he said it. After all, it’s not as though Merck wasn’t a highly profitable company for many, many years.

What does seem very clear to this author is that we have all lost our way to a greater of lesser extent. Profit is a reasonable expectation for a for-profit entity. How much profit and on what grounds is a much harder question to address. Access to treatment that extends life is a reasonable expectation for any sick person — and the younger the person the more reasonable that expectation may be thought to be. But just how valuable is a treatment that extends life by a month (or even 3 months) for 90% of the patients so treated? Especially if one compares the cost of that treatment to the costs associated with educating the next generation of children.

Making, selling, and using healthcare is not the same as making, selling, and using toys, or chocolate, or pearl earrings. The laws of supply and demand that we apply to decisions about the use of “consumer goods” do not operate in the same way when applied to health care. When drugs like penicillins and tetracyclines and vaccines for polio and chickenpox were developed and sold for relatively small amounts of money, they were able to give people back years and even decades of life. Today, a new cancer drug may give an elderly patient another 2 or 3 months of life (on average) and a shingles vaccine may prevent significant pain for a while — but it doesn’t extend life at all. How should we be valuing such relatively small benefits compared to the benefits of the agents on which the modern biopharmaceutical industry was founded?


About Mike Scott

Mike Scott is a highly experienced health care communications strategist with Calcium. He is also a board member of three different patient advocacy organizations. To get more detail, see his profile on LinkedIn.

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