Newest Cancer Drugs Unaffordable

"Tarceva was a more powerful and more active agent than what we understood at the time of launch, and so more valuable," Dr. Susan Desmond-Hellmann, the president of product development for Genentech.

Because the newest cutting edge Molecular Targeted Drugs such as Avastin and Tarceva are so effective, their manufacturer is increasing their price in instances where the cost of manufacturing remains practically the same. Ironically, both Avastin and Tarceva were in their final approval stages during Cecily's illness. We fought tooth and nail to get them for her under the "Expanded Access Law," in which the FDA will allow patients to have drugs still formally unapproved after all testing has been completed. The drug companies, however, exercised a loophole in the law --- a loophole saying that co-operation by the Drug Companies is VOLUNTARY. Not much of a law, is it? All efforts to obtain the drugs on a "Compassionate Basis" were declined. These two drugs now show enormous potential in the treatment of Lung Cancer, as part of a hoped-for larger cocktail yet to be officially formulated. Avastin appeared in pharmacy shelves within 2 weeks of our loss of Cecily, and Tarceva some months later.

A Cancer Drug Shows Promise, at a Price That Many Can't Pay

NEW YORK TIMES (edited by this site)

Published: February 15, 2006

That price is about double the current cost of Avastin as a colon cancer treatment. Analysts predict that Avastin, already a billion-dollar drug, has a potential for its United States sales to grow nearly sevenfold to $7 billion by 2009.

Doctors, though, warn that some cancer patients are already being priced out of the Avastin market. Even some patients with insurance are thinking hard before agreeing to treatment, doctors say.

Until now, drug makers have typically defended high prices by noting the cost of developing new medicines. But executives at Genentech and its majority owner, Roche, are now using a separate argument — citing the inherent value of life-sustaining therapies.

If society wants the benefits, they say, it must be ready to spend more for treatments like Avastin.

Studies show that Avastin can also prolong the lives of patients with late-stage breast and lung cancer, and Genentech expects to seek federal approval later this year to sell it specifically for those diseases. Avastin will be used at higher doses for lung and breast cancer, and Genentech does not plan to reduce the unit price, even though the additional cost of producing a higher dose is minimal.

"Avastin is a superb drug, but its cost is already discouraging patients and doctors from using it," said Dr. David Johnson, who heads the cancer unit at Vanderbilt University and is a former president of the American Society of Clinical Oncology. "I wish it were one-tenth the cost, and if it were I would be giving it to almost everybody."

On Feb. 17, Ms. Elkins, a 64-year-old retiree who lives in Georgetown, Tex., returned to her pharmacy for a refill. This time, following a huge increase in the wholesale price of the drug, the cost was $548.01.

Ms. Elkins's insurance does not cover nitrogen mustard, which she must take for at least the next six months at a cost that will now total nearly $7,000. She and her husband, who works for the Texas Department of Transportation, are paying for the medicine by spending less on utilities and food, she said.

The medicine, also known as Mustargen, was developed more than 60 years ago and is among the oldest chemotherapy drugs. For decades, it has been blended into an ointment by pharmacists and used as a topical treatment for a cancer called cutaneous T-cell lymphoma, a form of cancer that mainly affects the skin.

Last August, Merck, which makes Mustargen, sold the rights to manufacture and market it and Cosmegen, another cancer drug, to Ovation Pharmaceuticals, a six-year-old company in Deerfield, Ill., that buys slow-selling medicines from big pharmaceutical companies.

The two drugs are used by fewer than 5,000 patients a year and had combined sales of about $1 million in 2004.

Now Ovation has raised the wholesale price of Mustargen roughly tenfold and that of Cosmegen even more, according to several pharmacists and patients.

Sean Nolan, vice president of commercial development for Ovation, said that the price increases were needed to invest in manufacturing facilities for the drugs. He said the company was petitioning insurers to obtain coverage for patients.

The increase has stunned doctors, who say it starkly illustrates two trends in the pharmaceutical industry: the soaring price of cancer medicines and the tendency for those prices to have little relation to the cost of developing or making the drugs.

Genentech, for example, has indicated it will effectively double the price of its colon cancer drug Avastin, to about $100,000, when Avastin's use is expanded to breast and lung cancer patients. As with Avastin, nothing about nitrogen mustard is changing but the price.

The increases have caused doctors to question Ovation's motive — and left lymphoma patients wondering how they will afford Mustargen, which is sometimes not covered by insurance, because the drug's label does not indicate that it can be used as an ointment. When given intravenously to treat Hodgkin's disease, its other primary use, the drug is generally covered by insurance.

"Nitrogen mustard has been around forever," said Dr. Len Lichtenfeld, the deputy chief medical officer of the American Cancer Society. "There's nothing that I am aware of in the treatment environment that would explain an increase in the cost of the drug."

Dr. David H. Johnson, a Vanderbilt University oncologist who is a former president of the American Society of Clinical Oncology, said he had contacted Ovation to ask its reasons for raising Mustargen's price.

But people who analyze drug pricing say they see the Mustargen situation as emblematic of an industry trend of basing drug prices on something other than the underlying costs. After years of defending high prices as necessary to cover the cost of research or production, industry executives increasingly point to the intrinsic value of their medicines as justification for prices.

In some drug categories, such as cholesterol-lowering treatments, many drugs compete, keeping prices relatively low. But when a medicine does not have a good substitute, its maker can charge almost any price. In 2003, Abbott Laboratories raised the price of Norvir, an AIDS drug introduced in 1996, from $54 to $265 a month. AIDS groups protested, but Abbott refused to rescind the increase.

And once a company sets a price, government agencies, private insurers and patients have little choice but to pay it. The Food & Drug Administration does not regulate prices, and Medicare is banned from considering price in deciding whether to cover treatments.

The result has been soaring prices for some drug classes, notably cancer treatments. In 1992, Bristol-Myers Squibb faced protests for its plans to charge $4,000 a year for Taxol, a breast cancer treatment.

Now, most new cancer treatments are priced at $25,000 to $50,000 annually. In some cases, companies are pushing through substantial price increases on already-expensive drugs.

Last year, Genentech raised the price of Tarceva, a lung-cancer drug, by about 30 percent, to $32,000 for a year's treatment.

In an interview last month, Dr. Susan Desmond-Hellmann, the president of product development for Genentech, said that the company had raised Tarceva's price because the drug works better than Genentech had anticipated.

"Tarceva was a more powerful and more active agent than what we understood at the time of launch, and so more valuable," she said.

Newest Cancer Drugs Unaffordable

A Cancer Drug Shows Promise, at a Price That Many Can't Pay

A Cancer Drug's Big Price Rise Is Cause for Concern