In October 2012, Memorial Sloan-Kettering made national headlines when its decision not to include a newly approved cancer drug in the formulary was announced in a New York Times op-ed. The decision was considered unprecedented and bold, yet according to hospital officials, the reasoning behind it was based on a simple question: Is there a benefit to the patient?
The new colorectal cancer drug Zaltrap® proved to be no more effective in large clinical studies than a drug already in use, yet its cost was almost double. “Ignoring the cost of care,” the editorialists wrote, “is no longer tenable … when choosing treatments for a patient we have to consider the financial strains they may cause alongside the benefits they might deliver.”
One year later, the undoubtedly high and rising cost of cancer drugs continues to be top of mind as discussions regarding healthcare reform play on in the United States.
In the October 21 issue of New York Magazine, Leonard Saltz, Chief of the Gastrointestinal Service, and Peter B. Bach, an epidemiologist and Director of the Center for Health Policy and Outcomes at Memorial Sloan-Kettering, delve further into the issues in a feature cover story, “The Cost of Living,” written by Stephen S. Hall.
In addition to detailing Memorial Sloan-Kettering’s 2012 decision – a decision that helped to trigger a larger, national discussion – the article explores other examples of the drug-price debate.
Advocating for a Better System
When new drugs are introduced to the market, they are protected for a period of time by patents that give pharmaceutical companies the flexibility in setting a drug’s price. But as Dr. Bach published in 2009 and explained to New York Magazine, there is no such thing as fixed costs.
Drug companies, he noted, often give undisclosed discounts to healthcare providers and insurance companies, so prices can “vary widely.” The system is structured so that drug companies can and will dictate costs. They “‘are responding in a logical way’ to an illogical system that, in terms of prices, has no ‘upper limits,’” he said.
Physicians and other experts are beginning to question this and other practices more widely, raising much-needed awareness for the need to change a system that rewards minor advances rather than aiming for cures.
“Whereas we had hoped that small, incremental gains would be a springboard to something bigger and more productive, I fear those small, incremental gains have become a business model,” said Dr. Saltz. “Right now, it is safer for a pharmaceutical company to strategize for large-scale clinical trials that look for small, incremental gains that will get a drug to market, than to swing for the fences and try for the big advance.”
Read the New York Magazine article in its entirety and access some of Dr. Bach’s research on the cost cancer drugs.