Money and pills

How much is it reasonable to pay for a drug? If I have a headache, I would gladly pay a dollar for a dose of Motrin, but if it cost $500 I think I would rather endure the headache and save my hard-earned money for other things. If I had a history of life-threatening anaphylactic reactions to bee stings, I would gladly pay a lot for an Epi-Pen; but where would I draw the line? What if it cost so much I would have to skimp on food and forgo other budget items to pay for it? If insurance is paying, we may not worry about cost; but if insurance covers exorbitantly expensive drugs for some, that will raise premiums for all.

Some new drugs offer a small benefit at a high price

I subscribe to The Medical Letter and I am frequently shocked by the cost of some of the new drugs they review, especially the cancer drugs. We’re talking tens of thousands or even hundreds of thousands of dollars a year for drugs that may or may not help individual patients; and if they do help, they may only extend their lives by a few weeks and they may cause worrisome side effects. And drugs for other, non-cancer indications bring small benefits at a high price. Here are some examples from just one recent issue:

Evolocumab (Repatha) is given by injection every 2-4 weeks to reduce cardiovascular risk in patients whose LDL cholesterol levels have not dropped to acceptable levels with maximally-tolerated doses of statins. In a large double-blind placebo-controlled trial, it reduced the incidence of heart attacks from 4.6% to 3.4%, reduced the need for revascularization surgery from 7.0% to 5.5%, and reduced the incidence of ischemic strokes from 1.9% to 1.5%. These reductions were statistically significant, but it did not significantly reduce cardiovascular mortality or all-cause mortality. Treatment for one year costs $14,563. The authors of the study estimated that 74 patients would have to be treated for two years to prevent one cardiovascular event (death, heart attack, or stroke). It would cost $2,149,400 for one patient to benefit while treating 73 patients who would not benefit.

Dupilumab (Dupixent) is an injected human monoclonal antibody approved to treat adults with moderate to severe atopic dermatitis (eczema) that has not responded to topical therapies. Several placebo-controlled trials have shown it to be safe and effective. Around 40% of patients on dupilumab had complete or almost complete clearing of skin lesions compared to 7-12% of patients on placebo. One pre-filled syringe costs $1,423; a year’s supply costs around $37,000.

Plecanatide (Trulance) treats chronic idiopathic constipation. In the 20% of patients who responded, it increased the rate of complete spontaneous bowel movements by one a week, which was statistically significant. At a cost of $353.50 a month, or $4,242 a year. That’s $88 for one complete spontaneous bowel movement; if insurance didn’t cover it, how many patients would be willing to pay that much out of pocket for a single BM, even if they could afford it?

The challenges of the accelerated approval program

A recent article in The New England Journal of Medicine (NEJM) discussed the challenging combination of accelerated approval and expensive drugs. The FDA’s accelerated approval program was started in the early 1990s in response to the demand for faster drug development to meet the AIDS crisis. It allows the approval of drugs on the basis of surrogate end points that are “reasonably likely to predict clinical benefit.” Accelerated approval currently accounts for about 10% of new drug approvals. It requires manufacturers to conduct post-approval trials and to label the drugs with a statement that clinical benefits have not been established.

Eteplirsen (Exondys 51) was approved for muscular dystrophy on the basis of very small increases in the production of dystrophin protein. After approval, the manufacturer announced an estimated cost of $300,000 a year, a lot to pay for a drug when the clinical effectiveness is unknown. Private insurers have either declined to cover it or have imposed restrictions. Medicaid is required to cover nearly all FDA-approved drugs. Medicare is required to cover drugs that are “reasonable and necessary,” with protected classes for which all or nearly all FDA-approved drugs must be covered; one of those protected classes is cancer drugs, a class that qualifies for accelerated approval.

Some other drug costs are listed in a table in the NEJM article:

  • Crizotinib for certain cancers: $14,353 a month
  • Bedaquiline for drug-resistant tuberculosis: $6,000 a month
  • Pomalidomide for refractory multiple myeloma: $14,165 a month
  • Blinatumomab for refractory lymphoblastic leukemia: $56,262 a month
  • Pembrolizumab for unresectable melanoma: $9,252 a month
  • Ceritinib for advanced non-small-cell lung cancer: $14,628 a month
  • Panobinostat for resistant multiple myeloma: $10,625 a month
  • Palbociclib for certain advanced breast cancers: $11,224 a month
  • Eteplirsen for Duchenne’s muscular dystrophy: $7,600 a month

The authors propose several policy options to address this challenge.

The challenge of hepatitis C

Around 3.5 million people in the US are infected with hepatitis C virus. It is more common in people who have had blood transfusions, have injected drugs, have HIV, have been on long-term kidney dialysis, or were born between 1945 and 1965. 75-85% of infected patients develop chronic hepatitis C, which can lead to liver cancer and cirrhosis; it is one of the top reasons people get liver transplants. Highly effective drug treatments have recently become available, but they are expensive, as much as $84,000 to $94,500 for a course of treatment. If everyone in the US with hepatitis C virus were treated, it would cost $331 billion, more than the total drug spending in 2013. For Medicare, treating one patient with Harvoni costs as much as the total annual health care costs for 29 enrollees.

State Medicaid programs have been sued for limiting access to hepatitis C treatments. The suits claim the restrictions are illegal and violate standard medical care. In Washington State, a federal court judge ordered the state Medicaid program to lift coverage restrictions.

The lessons of kidney dialysis

When kidney dialysis was first introduced in the early 1960s, funds were not available to treat everyone who needed it. So-called “God panels” were established to allocate treatment based on perceived social worth. The ethics of that practice were questionable. In 1972 the federal government stepped in to provide lifelong subsidies for eligible patients with end-stage renal disease. At the time, there were 10,000 patients on dialysis with an annual cost of $280 million, but by 2008 there were 382,000 patients on dialysis for a total cost of $39.5 billion, 8% of total Medicare costs. The God panels gave priority to the patients they thought would benefit society by returning to work, but 71% of dialysis patients are unemployed.

Dialysis is not a panacea. It only performs about 10 percent of the work of a healthy kidney, and can cause problems like anemia, bone disease, and high blood pressure. Patients who have a kidney transplant live longer than patients on dialysis, but kidney transplants are expensive, involve risks, and require lifelong immunosuppressant medications at an annual cost of $10-14,000. For the sickest patients, the average cost of one additional quality-adjusted year of life (QALY) was $488,000. For many patients, dialysis has an adverse effect on quality of life. In patients older than 75 with comorbidities, dialysis does not improve survival compared to nonaggressive, conservative renal care. And technological advances in dialysis over the last two decades have not resulted in any improvement in mortality.

Conclusion: Drug prices are a dilemma for society

Our ability to develop new medical treatments is fast outstripping our ability to pay for them. An article in the AMA Journal of Ethics argues that we are already in the era of health care rationing. Funds are not unlimited. As the present trend of ever-more-expensive medical treatments continues, something will have to give. As a society, we will have some difficult decisions to make. How much are we willing to spend? Can we put a price on a human life or on quality of life? What can be done to cut costs? These issues deserve serious discussion, especially now with President Trump’s proposed budget cuts and the pending revision of the American Health Care Act.

Posted by Harriet Hall

Harriet Hall, MD also known as The SkepDoc, is a retired family physician who writes about pseudoscience and questionable medical practices. She received her BA and MD from the University of Washington, did her internship in the Air Force (the second female ever to do so),  and was the first female graduate of the Air Force family practice residency at Eglin Air Force Base. During a long career as an Air Force physician, she held various positions from flight surgeon to DBMS (Director of Base Medical Services) and did everything from delivering babies to taking the controls of a B-52. She retired with the rank of Colonel.  In 2008 she published her memoirs, Women Aren't Supposed to Fly.