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The Cost of Living


Saltz acknowledges that cancer research is incredibly difficult and that progress is neither easy nor cheap, but he once believed that the drugs developed over the last twenty years, based on elegant new molecular biology, would revolutionize treatment and make the use of 5-FU and other chemotherapies seem like an archaic practice by medical Druids. “These were going to make us look back and say, ‘Can you believe we used to give drugs to people that made their blood counts drop and made them vomit and made their hair fall out? Now we block the blood supply to the tumor! We turn off the growth-factor receptor! It’s so much better! It’s so much less toxic! It’s so much more effective!’ ” Saltz says. “That’s what we all envisioned. That’s not what happened.”

The only part of the vision that came true was that the drugs were so much more expensive. “When these drugs failed—and they did fail—to replace the drugs before them,” Saltz says, “the fallback position was: Let’s see if the [old] drugs plus the new drug are better than the [old] drugs alone. And that’s how these drugs come to market … We start out with a new drug and get excited about it. We do big expensive studies with high hopes for it. And the drug winds up doing less than we hoped it would, but it gets on the market, and then it is both hyped and billed as if it did what we hoped it would do in the first place.” (Pharmaceutical companies, not surprisingly, disagree with Saltz. “A person diagnosed with advanced colorectal cancer can now be expected to live for two years, and each of these medicines have contributed to that,” says Charlotte Arnold, a spokesperson for Genentech, which manufactures Avastin. “I think that when we talk about what we gain as a society, we should be looking at the big picture. As a society, our investment in new drugs and new medicines has been paying off.”)

In the battle against terminal illness, of course, a patient’s calculus of cost effectiveness often has more to do with living to see a child’s graduation or a spouse’s birthday than with the median survival benefit, and reaching those milestones is worth every penny. But as Saltz and other doctors are increasingly pointing out, the cost is steep both to society (in terms of those third-party pennies) and to patients (in terms of quality of life). “You might live 60 days longer,” says Bruce Hillner of Virginia Commonwealth University, “but the evidence suggests that each of those 60 days was diminished in some meaningful way” by the side effects of the drugs. Just last week, a New England Journal of Medicine editorial characterized high drug prices as a form of “financial toxicity.”

Saltz takes these failures a little personally, because he played a major role in bringing some of these medicines to market. He led key clinical trials resulting in FDA approval for two of them (Camptosar and Erbitux) and has conducted clinical trials with Avastin, too. And, like many oncologists, he keenly feels the emotional cost of resorting to treatments he wishes were more effective. Hence, these words—mind you, from the chairman of the Pharmacy and Therapeutics Committee at a hospital that likes to think of itself as the premier cancer center in the world: “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. 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.”

It’s not just that the skewed market for cancer drugs rewards mediocre products, he says. “Mediocrity is so well rewarded that it’s a better risk than aiming higher.”

A lot of what determines the price of cancer drugs can be attributed to the byzantine economics of health care: markets that don’t behave the way “real world” markets do; artificial price supports that are called something else; government regulations that remove any downward pressures on pricing; and, until Medicare reforms kicked in, in 2005, arcane reimbursement policies that actually rewarded oncologists who used higher-priced drugs, because it would increase the profit margins of their practices. You practically have to become a health-care economist to understand how it works, which is exactly how Bach, who trained as a pulmonary physician, became Sloan-­Kettering’s in-house expert on cancer-drug pricing.

In 2009, Bach published an article on cancer-drug prices in the New England Journal of Medicine that documented their dramatic rise and tried to explain the reason for it. The article laid out the tangled, almost Rube Goldberg regulatory strictures that shape—or, more accurately, distort—the cancer-drug market. The foundation for that market is the patent system, which rewards innovation by granting monopoly status to a new drug and essentially allows drug companies to name their price during the period of market exclusivity, generally seven to twelve years. It continues with federal limitations on Medicare that prevent the government’s largest purchaser of cancer drugs from negotiating with drug-makers on price.


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