More Cost Pressures for Pricey Drugs

In an op-ed in the New York Times, a trio of physicians from the Memorial Sloan Kettering Cancer Center in New York announced their decision to remove an expensive new cancer treatment from the hospital formulary, citing cost-benefit as their reason. The physicians said that because Zaltrap (ziv-aflibercept) made by Sanofi/Regeneron was no better at extending median survival in advanced metastatic bowel cancer patients than Avastin (bevacizumab) from Roche/Genentech but costs more than twice as much, it would no longer be given to patients at the hospital.

While Avastin is expensive in its own right, costing around $5000 per month, the hospital decided that the $11,063 per month Zaltrap did not provide any additional benefit, and so they could not justify passing the additional cost along to their patients. According to the op-ed’s authors, Peter B. Bach, the director of the Center for Health Policy and Outcomes, Leonard B. Saltz, chief of the gastrointestinal oncology service and chairman of the pharmacy and therapeutics committee, and Robert E. Wittes the physician in chief, “Ignoring the cost of care, though, is no longer tenable. Soaring spending has presented the medical community with a new obligation. When choosing treatments for a patient, we have to consider the financial strains they may cause alongside the benefits they might deliver.”

The authors admit that a single exclusion by a single hospital for a single drug is not likely to produce a major savings in the nation’s healthcare costs. However, the decision by the Sloan Kettering physicians to publicize and explain their decision in a Times op-ed is interesting because it reads a warning to drug companies. FDA does not factor cost into its approval decisions, nor can Medicare exclude cancer medications based on cost. If the government is prevented from directly controlling drug prices, it may be that greater price pressures will come from hospitals and individual prescribers.