Cancer Drugs Offer Hope, but at a Huge Expense - New York Times

Cancer drugs will be the fastest-growing part of the drug market for the next five years, with costs rising 20 percent a year, more than double overall drug spending...We also see incredibly high costs for drugs in ophthalmology, with minimal real benefits to patients...

Cancer Drugs Offer Hope, but at a Huge Expense - New York Times: "Ten thousand dollars once seemed a lot to pay for a few months' supply of a drug.

No more. Avastin. Erbitux. Gleevec. Herceptin. Rituxan. Tarceva. These are among the first in a wave of new drugs giving hope to millions of cancer patients by treating the disease in new ways, like blocking the blood vessels that feed tumors.

But they are all highly expensive, up to $100,000 for a course of treatment that lasts a few months. That is hundreds of times the cost of older, more toxic cancer drugs, and several times the annual cost of AIDS drugs, whose prices caused widespread anger during the 1990's."...

If history is any guide, health care professionals say, patients, doctors and lawmakers will not want to confront questions about how the medical system should deal with the cost of the new drugs.

"There's not really any incentive in the system to be more rational," said Dr. John Hornberger, an adjunct clinical professor of medicine at Stanford University and a practicing physician who studies drug costs.

Policy makers in the United States, unlike those in Britain and some other countries, do not measure the cost-effectiveness of new drugs, Dr. Hornberger said. The government does not control drug prices, and Medicare is prohibited from making coverage decisions based on cost; it must base its decisions solely on the drugs' performance. ...

While some of the new drugs are difficult to make, their prices are unrelated to their manufacturing costs, said Geoffrey Porges, a biotechnology analyst at Sanford C. Bernstein & Company. Drug makers charge what they think the market will accept, he said.

"It's sort of one of those things where everyone looks over their shoulder at everyone else, says, 'He started it, it wasn't me,' and it builds," Mr. Porges said.

Advocacy groups for cancer patients have been mostly silent on drug prices because pressing drug makers might discourage them from making the billion-dollar investments necessary to find new drugs.

Doctors also do not want to consider cost, said Dr. Eric Nadler, a researcher at Harvard Medical School who has studied the attitudes of oncologists on the issue. In his study, about 80 percent of cancer doctors said they would prescribe a drug costing up to $70,000 if it would extend a patient's life just two months longer than the standard treatment....

s a result of these forces, drug makers have faced only scattered opposition to the rising prices of new cancer treatments. The upward spiral started in 1992, when Bristol-Myers Squibb began charging $4,000 a year for Taxol, a breast cancer treatment that was among the first so-called targeted drugs, which are aimed at destroying tumors without the side effects of traditional chemotherapy.

At the time, some lawmakers and patient advocates complained, noting that Taxol had been invented at taxpayer expense at the National Cancer Institute. But Bristol held firm.

Then in 1998, Genentech began charging $20,000 a year for Herceptin, another targeted therapy for breast cancer. The price attracted notice, but little criticism.

Four years later, Bristol and ImClone Systems began charging as much as $100,000 a year for Erbitux, a drug for advanced colon cancer. (Because different patients have different treatment cycles, these prices are averages, as computed by the companies or financial analysts.)

For drug makers, the high prices have been a boon. Shares of Genentech have quadrupled in the last two years. Dr. Hellman of Genentech noted that the company began researching Avastin in 1989, at a time when many scientists doubted it could work. Genentech spent hundreds of millions of dollars researching the drug, and decided to build a plant to manufacture it years before receiving approval to sell Avastin in 2004...

Considering the expense and risk Genentech incurred - as well as the costs of similar treatment - Avastin is fairly priced, Dr. Hellman said.

"It's a giant breakthrough therapy," she said. "The value to patients is very high."

...the gap between performance and cost is especially pronounced for the cancer treatments. A Genentech study of colon cancer patients showed that a combination of Avastin and standard drug therapy extended the life of the average patient less than 5 months - to 20.3 months from 15.6 months - compared with the standard treatment...

Some oncologists are beginning to question cancer drug prices publicly. Dr. Saltz of Memorial Sloan-Kettering Cancer Center said doctors must consider drug cost when they discuss treatments with patients.

"We'd like to feel that it's wrong to put a value on human life and that we as a society won't do it," he said, "but we do it every day."