[Ip-health] Wall Street Journal: High Prices for Drugs Attacked at Meeting

Thiru Balasubramaniam thiru at keionline.org
Sun May 31 23:50:31 PDT 2015



High Prices for Drugs Attacked at Meeting

Cancer specialist criticizes new-treatment costs in high-profile speech

Updated June 1, 2015 1:34 a.m. ET

CHICAGO—In a sign of growing frustration with rising drug prices, a
prominent cancer specialist on Sunday sharply criticized the costs of new
cancer treatments in a high-profile speech at one of the largest annual
medical meetings in the U.S.

“These drugs cost too much,” Leonard Saltz, chief of gastrointestinal
oncology at Memorial Sloan Kettering Cancer Center, said in a speech heard
by thousands of doctors here for the annual meeting of the American Society
of Clinical Oncology.

Dr. Saltz’s remarks focused mainly on an experimental melanoma treatment
made by Bristol-Myers Squibb Co., but he also criticized pricing more
widely. He cited statistics showing that the median monthly price for new
cancer drugs in the U.S. had more than doubled in inflation-adjusted
dollars from $4,716 in the period from 2000 through 2004 to roughly $9,900
from 2010 through 2014. Dr. Saltz cited studies showing that the price
increases haven’t corresponded to increases in the drugs’ effectiveness.

“Cancer-drug prices are not related to the value of the drug,” Dr. Saltz
said. “Prices are based on what has come before and what the seller
believes the market will bear.”

Bristol-Myers’s new drug regimen showed significant benefit for melanoma
patients in a study presented earlier on Sunday at ASCO’s plenary session.
The regimen, which combines the drugs Yervoy and Opdivo, helped patients
live for a median of 11.5 months without their disease getting worse.

Dr. Saltz said the combination regimen’s benefit was “truly, truly
remarkable for a disease that five years ago we thought was virtually
untreatable.” But he said that combining the drugs would cost around
$295,000 a patient over nearly one year, which he called unsustainable. If
all U.S. patients with metastatic cancer took drugs priced at $295,000 a
year, it would cost $174 billion to treat them all for just one year, Dr.
Saltz said.

“The unsustainably high prices of cancer drugs is a big problem, and it’s
our problem,” Dr. Saltz said, calling on industry, physicians and insurers
to work together with government to address the issue.

Dr. Saltz’s estimate of the combination’s cost was based on the average
wholesale price of each drug individually and the average weight of a U.S.
adult. Opdivo and Yervoy are already approved individually to treat
melanoma patients, but not in combination with each other.

A Bristol-Myers spokeswoman said in an email that the company couldn’t
comment on the drug combination’s potential price because it hadn’t yet
been approved for melanoma patients. As more expensive cancer drugs get
used in combination, some industry executives have raised the possibility
of charging a discount to what the drugs would cost individually.

AstraZeneca PLC Chief Executive Pascal Soriot said in an interview that the
company is exploring alternative pricing models for some of its drugs, such
as discounting the price of two-drug combinations if they come to market.

Based on the drugs’ current recommended dose, Yervoy has a per-patient cost
of $131,213 for a full course of treatment, the Bristol-Myers spokeswoman
said. Opdivo costs about $150,000 annually per patient, she said.

Dr. Saltz’s speech was unusual because it was made at the meeting’s plenary
session, where the field’s most significant scientific research is
presented and which all meeting participants are expected to attend. An
estimated 25,000 doctors and scientists attended this year’s meeting.

It is unprecedented for plenary speeches, which typically address
scientific and medical issues, to substantially take on the topic of drug
costs, said Alan Venook, a professor of medicine at the University of
California San Francisco who planned the meeting’s scientific session and
invited Dr. Saltz to speak.

The prominent venue for the speech was also unusual because, like many
medical meetings, ASCO is sponsored by pharmaceutical companies and often
focuses on highlighting advancements in drug development, said Dr. Venook.
He said discussing drug prices there is “uncomfortable” because it could be
seen as “biting the hand that feeds you.”

Doctors are also reluctant to antagonize the drug industry because they
need pharmaceutical firms to invest in developing new medicines for
patients, he said.

“It’s a tough balancing act for ASCO where the meeting is largely funded by
pharma,” Dr. Venook said in an interview. “You can’t have a [plenary] talk
trashing pharma, but you can have a talk by a respected person questioning

There have been major advances in treating certain types of cancer in
recent years, and pharmaceutical companies argue that their drugs’ prices
represent their value to patients. Companies also note that they spend
significant sums on research and development and on subsidizing patients’
out-of-pocket drug costs through so-called patient-assistance programs.

Robert Zirkelbach, a spokesman for the trade group Pharmaceutical Research
and Manufacturers of America, said in an emailed statement that generic
drugs and aggressive price negotiation by private insurers have kept
overall drug spending in check. “This has led to tremendous—and
sustainable—progress against cancer, including dramatic declines in cancer
death rates and improved quality of life for patients,” he said.

In an interview prior to his speech, Dr. Saltz said there has been a taboo
associated with doctors talking about drug prices, in part because doctors
are expected to focus on what’s best for patients regardless of costs. But
in recent years, drug prices have begun to more significantly impact
patient care, he said. Patients are often expected to pay a percentage of
the cost for high-priced therapies, forcing some patients to forgo
effective therapies because of the financial burden, he said.

“All of the stakeholders involved need to stop pretending that price is
something we don’t need to discuss, because it affects all of us, and it’s
affecting our ability to deliver quality care to everyone,” Dr. Saltz said
in the interview.

He said that one step toward controlling prices would be allowing Medicare
to negotiate prices directly with pharmaceutical companies, which it is
currently barred by law from doing. He also called for changing the way
Medicare pays for infused drugs. Doctors currently receive a percentage of
the drug’s total sales price. The payment method has created a conflict of
interest because cancer doctors can make more money by using the most
expensive drugs, he said.

“It’s hard to believe that any of us could not be influenced by that in
some subtle way,” Dr. Saltz said in an interview. “It’s not to the
patient’s advantage, and it’s not the way the system needs to work.”

—Peter Loftus
contributed to this article.

Write to Joseph Walker at joseph.walker at wsj.com

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