The world is changing and with it health care policy. The role of cost effectiveness analysis is being hotly debated in public policy quarters. Many economists, health care policy experts, third party payers, governments, etc. have written on the issue and have openly questioned our society's) ability to continue to pay for expensive me-too drugs or drugs, particularly in the oncology area, that are very expensive and providing what could be viewed as minimal survival impact.
There is an increasing view that future drugs will have a much higher burden in showing that they offer value over competitive drugs on the market -- in many cases this will boil down to showing that they are more cost-effective to use and/or offer true patient benefit. As the concept of measuring a drug's cost-effectiveness or comparative effectiveness has evolved - so too has the term "quality-adjusted life year" or QALY emerged as a tool to standardize the measure of benefit provided by a particular therapy.
The QALY measure is controversial in and of itself. QALY (as explained by Peter Neumann, Director of Tufts Center for Evaluation of Value and Risk in Health in HealthBlawg) is an attempt to combine morbidity and mortality into a single number and to assign a cost for achieving that number. To illustrate, a particular cancer drug may extend a patient's life by 1 year, but the patient lives that year in poor health. We might estimate that the impaired extra year really represents only a 1/2 a year or 1/3 year - quality-adjusted life year gained. The idea is then to compare QALY for different drugs as a tool to help understand which may be more cost effective. A drug that costs $10,000 per QALY is more cost efficient that a drug that costs say $200,000 per QALY. Some health care system's are now saying they won't pay for the expensive, the $200,000 example, but would pay for $10,000.
The UK's National Institute of Health and Clinical Excellence (NICE) may be a particularly villified (in some quarters) institute that has used QALY as a means for helping it to decide which treatments it would recommend for funding and which would be rejected. NICE certainly has rejected paying for some expensive new approved drugs such as Avastin for bowel and kidney cancer, Tarceva for lung cancer, Menatime for Alzheimer's (Germany's IQWiG also turned down), Nexavar and Torisel for kidney cancer, Sutent (as second line treatment), and Velcade for multiple myeloma. Sutent was later approved as a first line treatment after Pfizer agreed to drop its price. The National Health Service (NHS), in a novel deal, agreed to pay for Velcade for patients that responded to therapy while those that did not would be removed and the manufacturer would refund treatment costs. See here and here for recent articles covering the Rare Cancers Forum report on NICE performance with cancer drug approvals. NICE consistently resists approving a drug with a QALY in excess of $50,000.
This concept of cost-effectiveness based rationing is somewhat further along (and more accepted) in Europe. It is more anathema to a US audience. Americans are used to getting what they want and perhaps feel entitled to access to these new treatments, if available, regardless of cost. There is apparently a term for this in health care policy fields, American Exceptionalism. News Blaze reported on a new poll from an organization known as 60 Plus, 63% of Americans oppose a pending FDA decision that bases cancer treatment options on cost, 71% are more apt to vote against candidates who support such FDA decisions - this stems from the FDA's recent decision to "de-label" Avastin for the treatment of breast cancer - which could remove it from Medicare, Medicaid and private insurance coverage for this indication. Americans remain united in their opposition to prospect of health care rationing that "puts a price on a human life." The Senate recently got involved as well when Medicare decided to evaluate Dendreon's Provenge post-approval. Presumably Medicare is taking a look at its cost with an eye toward limiting its reimbursement. Up till now Medicare has not done this with a recently approved drug and is not supposed to take cost into account when reviewing.
But can we afford to do otherwise going forward? Rationing will face tough opposition. More results form the 60 Plus poll:
- 56% of registered voters believe rationing is coming after Healthcare's passage
- 82% believe that cost-effectiveness is NOT a justifiable criterion for rationing
- 71% believe "the government is likely to limit treatment options through Medicare and Medicaid based on cost..."
- 85% say they will be truly "angry" if in fact Medicare and Medicaid coverage is rationed
- 72% believe the FDA shoudl have nothing to do with cost-effectiveness decisions
Doesn't sound like too many will be helping NICE relocate to the US anytme soon -- at least not voluntarily.
Contrast the above sentiments with an Forbes article by Robert Langreth where he interviewed Memorial Sloan Kettering oncologist Leonard Saltz. Saltz says that as cancer drug prices continue to soar that doctors, patients and society will need to decide what they are willing to pay for -- otherwise we crash and burn as a healthcare system. Saltz says our current practice of paying for very expensive treatments with minimal benefits is "encouraging mediocrity". We've trained our pharma companies to aim low and deliver to the minimum standard with too many "me-too" drugs (more on that topic in the next post). Saltz says nobody has been willing to draw the line on what a month of life is worth -- and as a result cancer treatment costs have soared well out of proportion with their meager benefits. Saltz says we need a kinder, gentler version of NICE - one with doctor and patient representatives and less top down bureacracy - to keep drug costs from soaring out of control.
Finally, from Peter Neumann, "I think there will continue to be a lot of concern and sensitivity around doing cost-effectiveness analysis openly. I think it's still fraught with a lot of political problems and mistrust and so forth. However, I think that we will slowly but steadily begin to use more of this information and we are beginning to see it -- even in Medicare we are beginning to see it on the prevention side."
Posted by Bruce Lehr September 16th 2010.