Assessing and Improving Value in Cancer Care Workshop Summary (2009) / Chapter Skim
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5 Value and the Oncology Market
5 Value and the Oncology Market
Pages 33-54
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From page 33... ...
To economists, maximizing value from the resources used on all goods and services in the economy, termed economic efficiency, requires that the value gained per dollar spent is equalized across all the ways in which those resources are used. If a bigger "bang for the buck" can be obtained from one use compared to another, there is benefit to be gained by simply transferring resources to the more efficient use, whether in health care versus other economic sectors, oncology versus other medical fields, or certain drugs versus other services within oncology.
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From page 34... ...
To prevent this, most insurance companies include rules and constraints that try to influence this price elasticity of demand -- the price sensitivity. From the standpoint of pharmaceutical manufacturers, determining the market price sensitivity can be difficult
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From page 35... ...
Pharmacy-dispensed drugs are generally handled through pharmacy benefit managers (PBMs) similar to the Medicare part D prescription drug plans or tiered formularies in private payor systems.
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From page 36... ...
Comparing prices for cancer drugs with those for other diseases requires a common, standardized health outcome measure and consistent
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From page 37... ...
Without this data on drugs in the TABLE 5-1 Canadian Coordinated Drug Review (CCDR) of Cancer Versus Noncancer Drugs Cancer Noncancer Treatments Treatments Number of drug indications reviewed 10 100 Number of drugs with cost/QALY reported 5 20 Maximum cost/QALY $126,500 $363,516 Mean cost/QALY $73,900 $78,099 Median cost/QALY $71,000 $61,000 Minimum cost/QALY $36,000 $9,225 CCDR recommendation Do not list for reimbursement 2 8 Number of drugs without cost/QALY reported 5 80 CCDR recommendation Do not list for reimbursement 3 39 SOURCES: Danzon presentation, February 9, 2009; Canadian Coordinated Drug Review Center; data from May 2004 through December 2008.
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From page 38... ...
Data from the Canadian Coordinated Drug Review Center provides some evidence, however weak, that cancer drugs are higher priced than others.
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From page 39... ...
, all biologics including cancer drugs. NOTE: Calculations based on IMS Health, Inc., MIDAS data, 2005.
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From page 40... ...
What Genentech does weight more heavily are various clinical and economic factors, such as the magnitude of the net health benefits in the initial launch indication, the level of unmet need, whether the drug will be introduced as second- or third-line therapy into patient populations that have limited treatment choices, and the potential value in future indications. In many cases, surrogate endpoint data (e.g., response rate)
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From page 41... ...
(effectiveness and safety) Patient OOP cost Practice economics Net price Relative perceived Adherence, dosing, Direct cost offsets value Adherence, dosing, tolerability,convenience determined through convenience Patient adherence reliable data Adherence, dosing, Mechanism of action Mechanism of action Mechanism of action convenience Cost/value (price, Net price Net price ICER -- indirect offsets Low ICER, patient OOP, or external data practice economics)
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From page 42... ...
For treatment benefits, standard, agreed-upon methods for adjustment of quantity of life are needed to account for quality of that extended life. Cancer trials have focused on the endpoint of quantity of life gained, but we are seeing that overall survival will be more and more challenging to routinely use as an endpoint in many large randomized phase III trials because of a number of factors, most importantly the complexity of follow-on treatments and crossover trial designs.
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From page 43... ...
–10 –10 –10 FIGURE 5-5 Relationship between differences in median progression-free survival and overall survival in treatment versus control arms from studies of breast, colorectal, and lung cancer treatments. NOTE: Each plot includes the 20 largest studies meeting inclusion and exclusion criteria for each tumor type between 1998 and 2008.
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From page 44... ...
Dynamic value is particularly important to consider in cancer therapy because cancer products are built with multiple indications -- front line, second line, breast cancer, lung cancer, adjuvant therapy, and so on -- each with different implications for a drug's value. In the case of Herceptin (trastuzumab)
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From page 45... ...
Rossi explained, bevacizumab had failed a phase III trial for treatment of breast cancer, shown significant impact in colorectal cancer, and further studies were underway for treatment of lung cancer. What should the price have been based on?
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From page 46... ...
Creating Value and Understanding Costs in Clinical Trials Individual physicians make hundreds of risk and benefit calculations for individual patients on a daily basis, taking into account their knowledge of the literature, their previous experience with other patients, their judgment about the individuals they treat, and the preferences they and their patients hold. With all of these factors to consider, how can medical oncologists systematically determine treatment value with respect to cost in the context of clinical trials?
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From page 47... ...
Given the complexity and intensive resources required to integrate cost-effectiveness analyses into phase III clinical trials, back-of-the-envelope calculations are often used to identify key cost drivers (see Box 5-1)
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From page 48... ...
from a cost-effectiveness analysis, the COST study (Nelson et al., 2004) , performed as part of a phase III cooperative group RCT in which the two study arms -- laparoscopic-assisted colectomy versus open colectomy to treat resectable colon cancer -- showed similar patient quality of life, cancer recurrence rate, survival, and complications (Clinical Outcomes of Surgical Therapy Study Group, 2004; Weeks et al., 2002)
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From page 49... ...
Open Colectomy Method LaparoscopicResource Category Assisted Open P-Value Mean length of stay, days 5.5 6.7 < .001 Mean operating room time, minutes 166 109 < .001 Equipment cartridges used per patient 3.4 2.5 < .001 SOURCES: Schrag presentation, February 9, 2009; Clinical Outcomes of Surgical Therapy Study Group, 2004. TABLE 5-3 Cost of Resources Used by Colectomy Method, at Academic and Community Hospitals Cost (2007 $US)
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From page 50... ...
Unit Costs from Unit Costs from Academic Center Community Hospital Hospital stay cost –1,665 –1,083 Operating room total cost 1,142 3,275 Anesthesia total cost 89 140 Recovery 10 –16 Intensive care unit days 659 333 Reoperation –2 –1 Rehospitalization –293 –189 TOTAL –62 2,454 SOURCES: Schrag presentation, February 9, 2009; data obtained courtesy of Dr. Jane Weeks; Clinical Outcomes of Surgical Therapy Study Group, 2004.
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From page 51... ...
Schrag listed barriers to integration of coste ffectiveness analyses in evaluation of cancer treatment. These barriers include • Substantial data-collection efforts are required to obtain reliable data, • Lack of data systems architecture in place to support cost-effectiveness analyses, • Reluctance of institutions to share cost data, • Investigator suspicion of the validity of cost-effectiveness analyses, • Underdeveloped cost-effectiveness analytic methods, • Competing study priorities and limited funding, • Occasional irrelevance of the cost-effectiveness analyses' results, • Political and regulatory hurdles mean the information cannot be used in regulatory decisions, and • Cultural preferences to avoid cost-effectiveness analyses for fear of "rationing."
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From page 52... ...
Schrag whether there were ways to anticipate at the outset the study population size needed to definitely achieve a cost-effectiveness trial result -- similar to power calculations for trials of clinical benefit. She said that techniques such as adaptive trial design, dynamic trial design, and value-of-information theory could be used to calculate such a threshold ahead of time, but the crucial component is also to understand key cost drivers, which can be difficult before the trial has begun.
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From page 53... ...
Just like the mortgage market was unsustainable, this avoidance of the cost issue is equally unsustainable. REFERENCES Clinical Outcomes of Surgical Therapy Study Group.
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