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The Cost of Living

None of the sixteen colon-cancer physicians at Sloan-Kettering who replied to Saltz’s query said they could see a reason for using the drug.

The hospital’s Pharmacy and Therapeutics Committee met in September 2012 to decide whether to include Zaltrap in their list of medications, and Saltz, who chairs the committee, informed his colleagues of the price and recommended not carrying the drug. The committee agreed. Sloan-Kettering, one of the country’s preeminent cancer hospitals, would not be offering Zaltrap to its patients.

When Saltz called upstairs to inform Peter B. Bach, director of the Center for Health Policy and Outcomes at Sloan-Kettering, of the decision, Bach wanted to know the reason.

“Because of the price,” Saltz told him.

As soon as he heard that, Bach, who has been documenting the dizzying rise of cancer-drug prices since 2009, immediately jumped into an elevator to go to Saltz’s office to learn more about the unprecedented decision. Why the rush? “C’mon!” Bach explained to me recently. “It’s never happened before! Sloan-Kettering isn’t including a drug because of its price?”

Thus began the first physician-initiated revolt in anyone’s memory against the skyrocketing cost of cancer drugs.

“Everybody agrees: The prices are unsustainable,” Saltz said. “And I often try to invite myself or people having these discussions to complete the thought: If it’s unsustainable, what happens when it’s unsustained? Do we have an adjusted, steady correction? Or do we have an implosion and a crash?”

Every time there is a public debate about drug prices, the pharmaceutical industry replies, as it did to the Zaltrap episode, with several fundamental arguments: The cost of bringing a new drug to market is enormous—$1.3 billion per drug, according to one often-cited (but often-contested) academic study; the drugs provide value and address unmet patient needs; and, perhaps most important, high prices—and profits—are necessary to subsidize the innovation that allows the industry to bring newer, better medicines to market. After Sloan-Kettering’s decision, Sanofi also pointed out in a statement that Zaltrap demonstrated “important survival benefits” for patients with metastatic colon cancer and provided an important treatment option (a company spokesperson declined to answer any further questions about the pricing of Zaltrap for this story). Usually, after these arguments are made, the debate dies down and prices continue to go up.

Cancer drugs have become a very big business, even though they serve what one expert has described as a “boutique” market. An estimated 1.7 million Americans will be diagnosed with cancer this year, according to the National Cancer Institute, and more than 580,000 people will die from some form of malignancy. In 2012, the overall market for “oncologics” reached nearly $26 billion a year in the U.S. alone, and annual global sales are projected to total $85 billion by 2016, according to the IMS Institute for Health Informatics.

What is sobering about this booming business is that, as a group of oncologists wrote earlier this year, “most anti-cancer drugs provide minor survival benefits, if at all.” They often (but not always) reduce the size of inoperable tumors, but they rarely eradicate the disease. For relatively uncommon malignancies like testicular cancer, some forms of leukemia, and lymphoma, drugs effectively cure the disease; for the common “solid tumor” cancers (lung, breast, colon, prostate, and so on), which account for the vast majority of annual cases, drugs buy some time—precious time, to be sure, but time usually measured in weeks and months rather than years. And even though many of the newer drugs are less toxic, they often still have to be given with older drugs whose side effects include nausea, hair loss, fatigue, and decreasing blood counts. One anti-cancer drug produces a skin rash so severe and disturbing, according to Saltz, that some patients have been asked by employers not to come to work.

In 1965, at the dawn of Medicare, the chemotherapy drug Vinblastine cost $78 a month, according to a widely cited Sloan-Kettering price compendium. In 2011, Bristol-Myers Squibb introduced a new melanoma drug called Yervoy at a cost of about $38,000 a month for a three-month treatment.* Yervoy followed, by about a year, a new prostate-cancer therapy called Provenge that cost $93,000 per course of treatment. Even an ancient chemotherapy like nitrogen mustards, cousins to World War I’s mustard gas and in use since 1949, have gotten caught in the cost updraft; in 2006, a course of treatment experienced a thirteen­fold price increase, from $33 a month to $420 a month.

And it’s not just that the price of cancer drugs has doubled in the last decade—it’s that the rise in prices, according to cancer doctors, has far exceeded the drugs’ effectiveness. In 1994, the median survival rate for someone with advanced colon cancer was eleven months, according to Saltz, and the lifetime costs of the drugs used to treat the average patient would be about $500 at today’s prices. By 2004, the median survival rate had increased twofold, to 22 months, but Saltz says the drug costs had increased hundreds of times for that extra eleven months.

*This article has been clarified to show that the $38,000 per-month cost for Yervoy is for a three-month course of treatment.