The case for rationing: Why we should limit public spending on cancer drugs
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Saying he would “not want to be a cancer patient in England,” Pfizer executive Erik Nordkamp unleashed a scathing criticism of the country’s ability to get new cancer drugs to the people who need them. He called the United Kingdom “one of the worst countries in the world, if not the worst, for getting breakthrough drugs to those who need them.”

People living in sub-Saharan Africa or India, where even basic cancer drugs are often out of reach, might not agree. Yet the comment draws attention to a problem all nations face: Deciding which medicines are worth paying for and which to ration.

There is only so much money available for medical care, and whether we want to admit it or not, there will always be limits to what we can afford. The UK generally favors funding interventions with the greatest health payoff. Better to feed three people hamburgers than one person steak, the logic goes. The metric used to compare different treatments is the number of dollars (or rather, pounds) needed to add a year of quality life.

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My first response to Nordkamp’s comment was to tweet

But it’s about much more than profits.

While it is fair and logical to compare treatments based on the cost per year of life added, that method poses a challenge for many new cancer drugs. My colleague Dr. Sham Mailankody and I recently analyzed five years of cancer drug approvals. We found that these newer cancer drugs routinely cost up to $100,000 for a year of treatment, and the price is not tied to a drug’s novelty or benefit.

Looking broadly at the impact of cancer drugs paints an even more sobering picture. Among 71 new drugs approved for solid tumors between 2002 and 2014, the median improvement in survival is just 2.1 months. Given that the costs are often large and the benefits small, nations like the UK believe they can do more for the health of their citizens by spending that money on antibiotics, surgeries, heart medication, and other treatments with broad and proven effectiveness.

This isn’t to say that the UK doesn’t pay for any cancer drugs. It pays for many of them — but these often aren’t the newest and most costly ones, which tend to be those with the most uncertain benefit. It will pay for new drugs that make big differences because these are more cost-effective.

The United States also rations medical care, but in a way that is decentralized, irrational, capricious, and unfair. The major barrier to getting care in the US is your insurance (or lack of it) and your ability to pay ever-growing out-of-pocket fees. We also spend a large portion of our annual gross domestic product on health care. That inevitably reduces investments in other areas, such as infrastructure and education.

In a perfect world, any drug that improves survival (with bearable side effects) should be broadly available. But we don’t live in a perfect world. While Nordkamp faults the UK’s unwillingness to pay for some new cancer drugs, the real problem is that drug companies are unwilling to charge less. For example, it costs just a few hundred dollars to make a year’s supply of imatinib — a truly transformational drug for treating certain types of leukemia — but Novartis Pharmaceuticals, which markets the drug as Gleevec in the US, charges more than $100,000 a year for it. Of course, all drug companies have substantial research and development costs, but still, after gains and losses are balanced, the pharmaceutical industry is one of the most profitable sectors of the economy. Pfizer, for example, reported a 42 percent profit margin just a few years ago.

In the US, Medicare cannot negotiate the price of cancer drugs. The UK’s health agencies are allowed to do this. The fact that the British government still declines to cover certain drugs after such negotiations tells us that even after price cuts, the drugs’ costs don’t justify their uncertain or slim benefits to society.

Writing in the journal JAMA Oncology, medical student Matthew Abola and I make the case that the terms frequently used to describe cancer drugs in the media, like “breakthrough,” “innovative,” and “game changer,” often exaggerate the true benefits. The use of such terms can create fear that individuals who don’t get these drugs are being denied the latest and greatest cancer therapies. The reality is that few of these drugs are miracles.

Instead of spending money on pricey cancer drugs that offer little benefit, the US should pay for more cost-effective health care that helps more people. Not only would that give us the greatest bang for the buck, but it might help life expectancy here (78.7 years) catch up to life expectancy in the UK (81.5 years).

Vinay Prasad, MD, is assistant professor of medicine and senior scholar in the Center for Health Care Ethics at Oregon Health & Science University, and coauthor (with Dr. Adam Cifu) of Ending Medical Reversal: Improving Outcomes, Saving Lives.

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