Bending the cost curve of cancer care

May 25, 2011- Since the approval of Genentech’s costly Avastin in 2004, prominent oncologists have warned that the total cost of all of the new “targeted” therapies would break the bank at some point. That day has arrived.

Total spending on cancer care has almost doubled in less than a decade due mostly to the exorbitant prices of new cancer drugs set by the pharmaceutical companies. Provenege (sipuleucel-T) for prostate cancer costs more than $93,000 for a series of injections. Yervoy (ipilimumab) for advanced melanoma costs more than $120,000 for one series and prolongs survival by four months.

By 2020, the total spending will be close to $200 Billion. To put that in perspective, the entire amount of the federal budget in 2011 spent on Medicare, Medicaid, CHIP, The NIH, The FDA, and other programs will be $900 Billion. Cancer care costs comprise more than 10% of all federal healthcare expenditures in the year 2011 and are growing far faster than the overall cost of healthcare.

Oncologists have begun to discuss specific proposals to limit the cost of cancer care. A “Sounding board” paper in the current NEJM lays out five specific proposals that oncologists and medical centers can adopt now to reduce spending on costly chemotherapy drugs with no survival benefit. The upcoming ASCO meeting will feature a panel to discuss the same topic. Some insurance plans have begun pilot projects to bundle cancer reimbursement rather than have the oncology practices profit from drug markups (a unique reimbursement method allowed for chemotherapy drugs). The new AHA healthcare reform law will require ACO’s to be established that will transition away from fee-for-service and toward bundled payments (see interview with the Deans from Johns Hopkins and Miami). Even the oncology lobbying group, ASCO, recognizes that efforts must me made to curtail unnecessary spending.

The NEJM paper, authored by Smith and Hillner, proposes that oncologists change practice behavior in five major ways:

  • Curtail self-referred, profit-making, medical imaging tumor follow up (e.g. PET scans, CT scans, etc) since no survival benefit has been shown
  • Use sequential monotherapy in solid tumors rather than combination therapy
  • Limiting chemotherapy from the very frail and terminal where no effectiveness has been shown
  • Reducing the dose of hematopoietic colony-stimulating factors (CSFs), such as Amgen’s Neulasta and Neupogen
  • Focus on palliative care in terminal patients rather than futile expensive third, fourth, or fifth-line chenotherapy

We interviewed the author, Tom Smith, MD to go over these recommendations.

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