The (High) Costs of Cancer Chemotherapy

There is an article in today’s Wall Street Journal that addresses a problem many cancer patients are going to face: How will we pay for these new, innovative, effective and very expensive medications that treat cancer and other chronic diseases?


This is not a new topic. The affordability of drugs have long been a problem for many patients.  Years ago, if you had hypertension, diabetes and heart failure and you had to take medications on a daily basis your drug bill could run to several hundred dollars a month. 


If you were insured, that wasn’t much of a problem.  The doctor prescribed the drug, the insurance company created a list of preferred drugs and adjusted the co-pay depending on whether you used a generic, a branded approved drug, or a drug that was not on the formulary, you went to the pharmacy and you got your medications..


There were howls from employers, insurers and others about the high and rapidly climbing costs of medications, and there were meetings held to discuss the topic and try to find a solution.  Discussions centered around the value of the drugs, and the impact they had on keeping people out of the hospital (a very expensive place to be) and remaining productive.  The argument was that drugs kept down other costs in the health care system, so to single out their costs as the problem wasn’t the key issue since increased costs in one part (medicines) kept down costs in the other part (the hospital).


If you were elderly, on Medicare and not eligible for Medicaid because your social security check was too large (and that wasn’t very much), you scrounged to find the money to pay for your drugs—while trying to keep a roof over your head and having left over to buy groceries.


The world of cancer chemotherapy wasn’t much better.  Chemotherapy drugs were expensive in comparison to other medications.  And with the introductions of new drugs and new drug combinations, the costs began to mount.  But they were still much less than is the case for many drug treatment protocols used for cancer treatment today.


But nothing—nothing—compares to what we have seen over the past couple of years.


I have written previously about the advances we have made in cancer treatment, especially in the area of targeted therapies which take advantage of changes in the cancer cell vulnerable to attack by specifically targeted drugs. 


Think of it as rational drug design: define the target and the effect that target has on a cancer cell (such as production of a protein that helps keep the cancer cell alive), and then either search for a compound or develop one that interferes with the target.  The result is that the cell has a serious interruption in its internal operating mechanisms, and if the target is an important part of the cell’s immortal life cycle, then when the target is blocked, and the protein is not produced, the cell dies.  The result is a shrinking tumor or a disappearing white blood cell, as is the case with chronic myelogenous leukemia when treated with Gleevec.


There are several of these targeted therapies that have come to market, and many more are in the pipeline.  In fact, probably the majority of cancer drugs currently under investigation or development are of this type.


But it became evident a couple of years ago that these drugs were not going to be inexpensive.  Research and development costs were substantial.  The risk of getting a drug through the various clinical and regulatory hurdles raised the barrier to actually getting a drug into standard clinical use.  And, it wasn’t clear how many patients would be able to use the drug.  (The recent example of Iressa takes the case one step further: a drug approved for clinical use is withdrawn after a follow-up study failed to show effectiveness.)


When Gleevec first became available, the manufacturer made a special effort to let the American Cancer Society know that patient support for affording the drug would be available.  They had programs in place, and our call center was provided with the phone number.  This was one of the first of the large scale targeted therapies to become generally available, and many of us were a bit taken with the price of the drug. 


Taken by mouth, Gleevec was probably covered in some fashion by insurance plans, but oral drugs were not covered by Medicare at the time.


From that moment going forward, I was interested in what would happen when people were not able to afford the drug or the co-payments for the drugs.  Certainly this would be a problem for folks on Medicare who had limited resources.  Personally, I anticipated we would be hearing from many people who couldn’t afford the drugs.  I also thought it would quickly become a question on the national agenda.  After all, this wasn’t a problem limited to cancer patients.  As documented in the newspaper article, there are many diseases other than various cancers where the huge costs of medications are a significant issue.


Now for the interesting part: despite keeping my ear to the ground through a variety of organizations and other connections and resources, I didn’t hear the expected outcry.  Reporters interviewed me regularly about the new approaches to the treatment of cancer, and the new drugs.  Together, we marveled at the science and its potential.  We discussed the many new drugs in the pipeline.  We shared our concerns about the cost and the affordability of the drugs.  And then the same question would be asked: have you heard about people not being able to afford the drugs, or insurers not paying for the drugs, and, by the way, are the states paying for these drugs through Medicaid? 


I would constantly ask people if they had heard from patients about the problem.   To my continuing surprise, the expected large volume of concern hasn’t occurred. (We have a call center that probably has had some calls on this topic, and we have a pilot program that helps people understand their insurance and can provide some guidance for resources they can pursue to help get payment.  But, as a general policy, the American Cancer Society can’t make grants of the thousands of dollars it would take to help all of the people who are in need.)


The article in the Wall Street Journal now offers an explanation as to what may have been the reason there hasn’t been more of a problem.  Although the report in the paper is not a thorough, scientific study of the issue, it does address in a very practical manner how patients and the pharmaceutical companies are working through their difficulties in getting coverage for the drugs.  (The article is well done, and if you are interested in this topic, it is worth reading. The Journal has done several excellent pieces on various aspects of this topic over the past couple of years, including one that reviewed the risks and expenses of developing these new drugs).


By establishing support programs, apparently the drug companies are routing money through charitable foundations to help patients.  This is legal, according to the article, and one quote is that this is a win-win for both the companies and the patients.


But it is still a critical question, and one that we must face.  I don’t know the right price for a particular drug.  In a sense, we have to rely on the companies to set the price at the appropriate level to provide them the incentives to do the basic and clinical research to develop these new drugs, few of which will get into actual clinical usage.  But we also have to rely on them to not be too extravagant in their pricing, such that no one can afford these medications.


Another concern is that as we go forward, we are going to become increasingly more knowledgeable and sophisticated in targeting our therapies to a particular cancer in a particular patient.  That in turn may mean customized treatment programs which may differ from patient to patient, even though they have the same type of cancer.  We are actually seeing the beginning of that today in the treatment of patients with Tarceva and lung cancer, where we have a test which may increase the predictability of response to the drug.


When our treatments become more narrow focused, will we still have an economic incentive to develop drugs, and not have each of them cost hundreds of thousands of dollars for a course of treatment each year?


What about health insurance maximums?  It used to be that a $1 million lifetime benefit limit was sufficient and almost no one reached it.  Now, it’s nowhere near adequate to see some of us through a serious, chronic illness.  Some companies and plans are even doing away with benefit maximums, although several experts say that such a plan is corporate suicide and is not justifiable from an insurance standpoint.  These experts say that the increase in the cost of insurance would skyrocket if such plans became widespread.


Then there is Medicare.  Drugs given in doctors’ offices, up until now, have been covered under Medicare Part B.  The costs of these drugs have had a real impact on the budget neutrality of Part B, and have in turn contributed to the increased premium seniors have to pay.  (Budget neutrality in Medicare Part B means that when costs go up in one part, reimbursements have to go down elsewhere since the amount of money in the program is fixed.  As I write this, reimbursements to doctors for their services are going to decrease 4.4% on January 1, 2006, in part as a result of the increased costs of drugs and technologies paid by the Medicare program.)


Finally, there is the 800 pound gorilla that starts on January 1st.  And that is Medicare Part D.  There are many, many seniors who are going to benefit from this program, if they can get the help they need to figure out which plan is best for them.  But, eventually through Plan B and Plan D, looking down the road to the future, the fruits of our research success are going to come knocking at the door of Medicare as more and more of the new drugs become more and more expensive.


I don’t have an answer to this dilemma.  As mentioned above, the hue and cry that I expected has never become a prominent issue on the national medical/political radar.  We haven’t started to talk about rationing—yet.  And we haven’t seen a drug insurance co-pay scheme that goes beyond the generic/brand name/formulary approach described at the beginning of this blog. 


On the horizon, however, are plans to link co-pays to effectiveness, and when that happens someone is going to be making decisions to have you pay more for very expensive drugs if the insurance company decides that the very expensive drug doesn’t really do much to improve the quality of your life or the length of your days.


These are all complicated issues.  We all need to be aware of this issue.  We need to find a way to resolve it, especially to see that those who need these medications are able to get them. 


The alternative is going to be a multi-tier health care system, where the wealthy get the medications, and those relying on social security go without.


I’m not certain that many of us are yet ready or prepared to allow that to happen.


5 thoughts on “The (High) Costs of Cancer Chemotherapy

  1. Wise words and great ideas, but the reality is simply that capability and availability of treatment is rapidly outstripping the funding to pay for it, in either an actuarial system or reasonable time frame for pay-as-you-go funding. A multi-tier system is unavoidable.

    Medicare should focus on what it was designed to do: help seniors on a limited income and poverty. The reimbursements should be designed to permit balance billing which is unrestricted so long as not agreed to under duress. Proper informed consent of costs (like I already get at the dentist) is a simple matter.

    We already have multiple tiers of housing, dentistry, education, transportation, and retirement. Why should health care be different? Of course richer people get better care, and would you want to have your care limited by the lowest common denominator of a federal reimbursement should you find yourself in the same type of need?

    Using market forces, the engine of innovation (capitalism, not socialism) will continue to generate new and better treatments, which in their own time often pay for themselves and their development costs.

    The shift to pay for prescription drugs without the same types of fascist price controls and regulation on doctors and hospitals means this unfunded benefit will suck all the healthcare dollars out of the system, including those intended to permit providers and facilities to improve their systems.

    If I want to serve clients who are mostly above poverty, I shouldn’t be restricted to payments which are appropriate for those in poverty. Obviously, I also do not desire to eat cat food when I am older.

    Artifically lowering the reimbursement to providers and facilities to make ends meet accomplishes only one thing: less available care for the neediest. Look at the Medicaid program, as this is the future of all publicly funded healthcare, Medicare included.

  2. Your comments are thoughtful and thought provoking. I have been involved in similar discussions for many years, as well as in physician payment issues in general, and there are no simple answers.

    I agree with you that we need to do a much better job of informing patients about their costs of treatment. A number of years ago I had the experience of having a procedure done where I was not advised of the costs in advance, and where the doctor didn’t accept my insurance. So, I paid “retail” for my care because I hadn’t asked about the fees. It was a real eye opener, and quite frankly I may have made a decision to have my procedure done elsewhere if I had known the information. First time, shame on me…

    When I have pointed out to my colleagues that they should make this information freely available to their patients (as is being done by some insurers currently), I was met with howls of protest from some very knowledgeable people.

    My response was simple: what less right do I have to know the cost of my care than I do for a meal in a restaurant? Not that the two are comparable–my health care is much more important. But now that we are shifting so much more responsibility for payment on to the shoulders of the insured, we need to make certain that everyone in this system provides information as transparently as possible.

  3. Dear Dr. Lichtenfeld, What ever happended to the Dr. “Oath”? To make possible all options to save another. Money, Money Money… Who’s making the buck.. Who’s going to save lives anymore? Does the Insurance companies really have that much to say to where people die everyday, committ suicide, kill, because they have been turned down for treatment due to insurance, or not having paid their co-pays?

    It’s very rare that it’s the Dr’s decision, yet, I have experienced that because bookeeping needs numbers, numbers, numbers…. I have been turned down for treatment, due to a balance owed… I’m not alone…

    Now, it’s if you don’t have insurance, Sorry. If you do, please pre approve and see what the deductible if your’ not in the network, send them somewhere else.. yatta yatta yatta. well that’s fine w/standard appointments, but what about, Lupus, Cancer, diabeties, and all the other long term treatment? Once diagnosed, should that be a death sentance?

    I applaud you!! Let’s make a difference.

    I am a cancer patient and have been since 2005, I have insurance, but yes, that is not enough. With all the treatments, MRI’s, Chemo, and now, Steroid injections due to cancer in my spine, I am in a great prayer to help those w/out insurance, those that have to deal with co-pays, and those that can’t get on studies due to no insurance. Statistically, it shows that African Americans are diagonised with advance cancer due to invironment and no insurance. I believe this is incorrect. I am a white female, that has advanced cancer stage 3. After my mascotomy, I had residual cancer, with 7 major surgeries after the fact. At present, It has spread to my spine/neck and the co-payments are astrominacal. Why is it so bad, because I did not have insurance, my employment didn’t pay for mamagrams, the awareness wasn’t there, and, I didn’t think it could happen to me.

    Nonetheless, God, has put me into a position that I can perhaps, help those that will follow, and those that are me, and those that I follow. I work for the Senate, and I’m trying to get a bill into committee to review co-payments, not only for cancer, but for any long term illnesses. Co-payments and treatment along w/prescriptions, to be completely paid with the insurance payments, without co-pays. Regardsless of gender, age, race, this is something that needs to be set with the Government. I have been to eviction twice, lived w/out electricity, gas, phone, and gas in February, this past year, the coldest year in Indianapolis in 50plus years. While, on treatment, I continue to battle w/food, utilites, and how to pay the rent. I am now getting RED statements from the Hospital because I’m over due w/payment and they are threating not to treat me until payment is made.

    So much for the compassion of life and the wellness of giving. If you don’t have insurance, why bother, make your arrangements and peace, if you have insurance, pray that it’s going to be preapproved and that you can do the best you can until the Reapers come after you, and that’s after the Dr’s can’t treat you anymore.

    The most hurtful is, the elder that have paved our path, made and sacrificed so that we can have the world as we know it. Then, there are the children, who haven’t even lived, don’t know anything else but pain, Dr.s, and then sent home because, mom and dad can’t pay anymore, medicare won’t pay. After mortaging thier home, and going belly up. That’s still not enough to pay for treatment, preapproval’s, medications, and more importantly, co-payments.

    Together, we can make a difference for everyone. Please contact me at 317 358 5812 so that we can get a group from all over to speak at the Health Committee at the Senate, and one State at a time, together, we can do this.

    Thank you for your attention to my e-mail.


    Joanna L. King

  4. hi my name is jennifer and im doing a project on cervical camcer and i want to know and ask some questions. how exspensive is the treatment to cure cervical cancer? do you know any celebrities who have been diagnosed with cervical cancer? what should people living with the disease do to improve thier quality of life? if you have any answer’s to any of my questions please email me them… i need answer’s by thursday thanks, jennifer

  5. i was diagnosised with endometrial cancer had surgery now i can’t get chemotheropy because i have no insurance and am on disability(not a lot of money)so what am i to do? it hurts when cancer groups say we don’t do that any more or don’t that any more because they don’t have the money. i’ve never abused the system but the system seems to be abusing me,i’m at my wits end.thanks for listening.bonnie

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