Is Treating Cancer Worth It?

July 24th, 2008 by DrRich

Yesterday, Jacob Goldstein of the Wall Street Journal Health Blog pointed out the financial dilemma that has been created by evidence that a new cancer drug, Nexavar, is effective in treating liver cancer.

Most liver cancers are particularly impervious to chemotherapy, and until Nexavar came along no chemotherapy had ever been shown to significantly prolong survival. So when Nexavar improved the overall survival of a subset of patients with liver cancer in a well-designed randomized clinical trial (RCT) last year, the FDA (recognizing a true breakthrough when it sees one) quickly approved the drug.

The problem? Nexavar costs over $5000 per month. That, DrRich points out, is even higher than your average monthly health insurance premium. This means that any insurance company (or government) that agrees to pay for Nexavar is going to be out some big bucks.

(The good news for the payers, if there is any good news, is that Nexavar only prolongs survival by an average of three months, and the one-year survival of a population of patients with liver cancer on Nexavar is still less than 50%. Just think of the damage if Nexavar prolonged survival by several years!)

The economic question created by drugs like Nexavar - which result from extremely sophisticated and costly research and development processes, and whose benefits are undeniable but perhaps marginal - is likely to be asked several times over the next few years. We are also hearing those questions expressed, for instance, regarding the drug Avastin, which is used for lung, colon and breast cancer. Like Nexavar, Avastin has clear-cut and undeniable benefits that have been proven in RCTs. Like Nexavar it is very expensive. And also like Nexavar the duration of its benefits are measured in months, not years.

The form this economic question usually takes is: Should we really pay for extremely expensive cancer drugs like this when the expected benefit is so transient? While DrRich does not pretend to have the best answer for this question,* he will make two observations.

First, the reason it is so difficult to answer questions like this is that we in America (citizens, the government, and the insurers) refuse to acknowledge that there are limits to what we should expect from our healthcare system. We expect to receive any bit of healthcare that offers even a possibility of benefit, even if that benefit is likely to be marginal or transient. We expect our researchers to work day and night to cure every disease, no matter how rare, and we become indignant when progress does not seem rapid enough for our particular disease; indeed, death itself is merely a manifestation of insufficient research. In other words, where healthcare is concerned, there are and can be no limits.

Given this “no limits” paradigm, when our society is faced with the inescapable need to ration healthcare, that rationing can only be done covertly. There’s no other way to do it.

And under covert rationing (whose very purpose, again, is to preserve the illusion of “no limits”), there’s simply no mechanism, or even justification, for addressing questions like the one raised by Nexavar and Avastin. Our procedure is: we do the RCT, and if the RCT shows any measurable benefit, we pay for it. End of story.

So the insurers and the feds won’t be able to base their payment decision on some objective and transparent cost-benefit analysis for Nexavar, evaluating where this analysis falls in relation to all the other cost-benefit analyses they perform for all the other forms of therapy. Rather, they’re simply going to have to announce they’re paying for it. They have no other choice, because to do otherwise would question the “no limits” paradigm.

And then they’ll perform the unavoidable rationing by some covert means probably having nothing whatever to do with this particular therapy, or of any particular therapy, but rather, according to whatever means they can get away with, wherever in the healthcare system and with whichever patient that might be. That’s the job we’ve assigned to them. And they’re very good at it.

Second, the financial questions raised by Nexavar, Avastin, and similar therapies point out yet again that the Axiom of Industry often invoked by healthcare policy experts - that is, that improving quality will always reduce cost - simply does not work in healthcare. There are many, many times when achieving the best possible clinical outcomes (i.e., optimizing quality) greatly magnifies the cost of medical care.

The real problem with Nexavar and Avastin is not that their beneficial effect is just transient. That fact, to be sure, gives insurers and commentators a convenient handle, some basis for whining about these drugs that will engender sympathetic murmurs from certain quarters (though, as we have seen, it will ultimately not get them out of paying for them). But it’s not the problem. Indeed, the fiscal challenge for the payers would be much worse if these expensive drugs resulted in very prolonged survival. The real problem is that some of the stuff that works really well in healthcare is just really expensive, you see, because a lot of expensive research and technology went into developing and producing it. It just costs a lot.

So when some expert comes along and tells us that achieving a cost savings resulting from some brilliant new initiative - such as pay for performance, disease management, medical home, etc., etc. - will necessarily and directly yield an improved quality of care from that same initiative, we can immediately dismiss him or her as being either disgracefully ignorant of his or her chosen field of study, or disgustingly deceitful. In DrRich’s experience, the odds of any particular policy expert being disgraceful vs. disgusting is roughly 50-50.

* He does, however, pretend to have a transparent and equitable process for getting to a reasonable answer, which can be found in his book.

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