Guessing the future price of the next major breakthrough in prostate cancer treatment

In an article published on Monday September 28, in Pharmaceutical Executive (a well-known biopharmaceutical industry trade journal) a senior health care public relations executive recently laid out a detailed rationale for why the industry needs to do a better job when it comes to justifying the continuing rise in prices for new (and old) drugs. The final paragraph of the article included the following statement:

The days of unchallenged pricing are clearly drawing to a close. The Turing event this week and the focus on drug prices in an election year will only increase the urgency to better explain value by an industry that is making remarkable scientific breakthroughs that change patients’ lives every day.

On Wednesday, September 30, the US Food & Drug Administration (FDA) announced its approval of a new drug combination for the treatment of selected patients with aggressive forms of skin cancer: nivolumab (Opdivo) in combination with ipilimumab (Yervoy) for the treatment of patients with BRAF V600 wild-type, unresectable or metastatic melanoma.

In the approval statement, the FDA made the following key points:

  • The objective response rate (ORR) to nivolumab + ipilimumab was 60 percent as compared to 11 percent for ipilimumab alone.
  • 9/43 patients who had an objective response to nivolumab + ipilimumab (21 percent) had progressed after a response lasting 3  to 7 months, died, or received subsequent therapy.
  • 34/43 patients who had an objective response to nivolumab + ipilimumab (79 percent) had ongoing responses at the time of final analysis.
  • 20/43 patients who had an objective response to nivolumab + ipilimumab (47 percent) had ongoing responses of at least 9 months.
  • The median progression-free survival rates were
    • 8.9 months for patients treated with nivolumab + ipilimumab
    • 4.7 months for patients treated with ipilimumab alone
  • Serious adverse reactions were seen in
    • 62 percent of patients treated with nivolumab + ipilimumab
    • 39 percent of patients treated with ipilimumab alone

In other words, the combination of nivolumab + ipilimumad definitely extended patients’ progression-free survival … at a significant cost in terms of an increase in risk for serious side effects. We don’t actually know yet whether treatment with this new drug combination will have any effect on the patients’ overall survival … but it is reasonable to think that it certainly might.

Today, according to Bloomberg, the manufacturer of nivolumab (and of ipilimumab too) announced the price for this new drug combination … $256,000 on average for a year on treatment. That is the price for any patient that takes four cycles of the combination therapy — a standard dose of ipilimubab (Yervoy) together with a lower dose of nivolumab (Opdivo) — every 3 weeks, followed by a higher dose of nivolumab alone every 2 weeks. The cost for a year’s treatment with ipilimumab alone had been about $120,000 already.

Does it seem as though we have a disconnect here within the biopharmaceutical industry — let alone between the biopharmaceutical industry and the rest of society?

On this basis, if we were to learn, at the end of this year or early next year, that Prostvac VF could extend the overall survival (not just the progression-free survival, the actual overall survival) of men with metastatic castration-resistant prostate cancer by 6 months compared to a placebo in this ongoing trial, what would you expect the price to be for treatment with such a new form of therapy? What happens if treatment with Prostvac VF + enzalutamide could extend overall survival by 12 months?

Now let me be very clear that the extension of survival to patients with advanced forms of melanoma is remarkable. Until recently the majority of patients diagnosed with metastatic melanoma had a very short life expectancy indeed. The new drugs that have come to market in the past 3 years have changed that life expectancy dramatically. However, patients are paying a very real cost for such survival in terms of the side effects of treatment … both the medical side effects associated with toxicities of the drugs themselves and the financial toxicities too.

In some parts of this country you can still acquire a really pleasant home for $250,000. It won’t be a palace, but it will be a home. And to do it you might take out a 20-year mortgage. Where does the biopharmaceutical industry think that we are all going to find the money to pay this sort of price for a few extra months of life … or even an extra year?

5 Responses

  1. This pricing is atrocious. Frankly, if I get to the point where I needed to spend this kind of money for a few months of additional survival I’d take a pass, particularly considering that the side effects of these drugs resulted in a very poor quality of life for those few extra months!

  2. The question “Where does the biopharmaceutical industry think that we are all going to to find the money …” deserves, in my opinion, not just to be asked, but to be answered. Leaving aside all flourishes related to the “morality” or “justification” for effective but very high-priced substances, the fact is that the industry does not know exactly where the money will come from but thinks that it will come (as it does now) from some combination of (among others):

    — Patient’s own savings
    — Insurance reimbursement (private, Medicare, etc.)
    — Welfare-type government subsidies and grants (i.e., from the taxpayer)
    — Relatives of patients
    — Donations to patients or to caregiving suppliers

    The degree to which some of these sources can be relied upon to cough up big bucks is in part a political conundrum driven by:

    — Strong — in fact inexorable — pressure from patients and families who will move mountains to avoid or postpone the death of themselves or a loved one.
    — Budgetary pressures from previously-established budgets of insurers or government entities whose limits are being breached by the monster bills.
    — Grandstanding by politicians who either want to socialize the whole caboodle or who imagine they can persuade the drug suppliers to hand the stuff out for free.

    The eventual outcome will be, in my judgment, that society will find itself spending more each year on health care so that in the U.S. the total bill will rise from about 16% of GDP to about 25% over the next 10 or 15 years. Huge expenses for life-saving or life-extending pharmaceuticals will become even more common than at present. “Rationing” of health-care will be resisted.

    Or, to put it simply, society will spend relatively less on automobiles, clothes, and restaurants and relatively more on pharmaceuticals. There will dislocations, and gnashing of teeth, but this is what will happen.

  3. I’ve been struck in recent years by the growing concern over pricing in the cancer patient, physician, researcher and pharma communities. That concern is far from dominant, but in the 2000s my sense was that there was almost no concern: anything that benefited the patient, even a little, was OK. I sense, and I hope, that concern with pricing will become a major consideration for pharma (as evidenced in the article, which I read), the public, and patients. I see a role for us in channeling that concern so that it is handled in a more rational fashion.

    On the one hand you have Martin Shkreli, the despicable excuse for a human being who used his talent to siphon money from the pockets of patients into his own pockets. (The recent Turing Pharmaceuticals incident.) On the other hand you have Dendreon, which invested a billion dollars in bringing Provenge to market, then a half billion more to get it into production, having to file for Chapter 11 bankruptcy protection in the process. Somewhere in between you have Thalomid (thalidomide), an “ancient” drug from the 1950s that likely costs pennies to produce a dose (my guess) but that was priced at several thousand dollars for a 28-day supply when I was taking it recently.

    I’ve posted about the Dendreon/Provenge case before. It illustrates the huge gambles sometimes taken by pharmaceutical companies, and it strikes me that a substantial reward is appropriate, which means the drug is likely to be pricey. We also need to bear in mind that the market niche may greatly shrink or evaporate: all it takes is a seriously adverse follow-up study or a new competitor with something at least incrementally better, and these are realistic scenarios for developers of many drugs. Of course, many investigational drugs never make it through Phase III trials, and the investment is lost.

    On the other hand, I would also like to see a substantial role in drug pricing for the costs of development and production/marketing — not just whatever the market will bear. Most of my career involved analysis of R&D development costs for the defense industry, and it is clear that pharma costs can also be well analyzed and defined. It’s not rocket science.

    So here we have a number of factors that should play a role in drug pricing, including at least the following:

    — Net benefit to the patient, including the challenging issue of potential benefit discerned years later (e.g., metformin for prostate and other cancers; statins for prostate cancer patients; thalidomide for cancer patients)
    — Cost to develop and produce/market the drug
    — Income for the developer to finance other R&D (as with Dendreon and Provenge); as noted above, most investigational drugs never make it through Phase III trials and FDA approval
    — Opportunity to recoup costs and to profit prior to expiration of patent protection
    — Financial risk to the investors from emerging competitors, etc., and
    — An appropriate reward for the investors

    It would be interesting to run the pricing of the nivolumab + ipilimumab combo through these lenses as a test case.

    The roles of the market and of government in pricing in the US are likely to be in flux in the near future, but I hope that transparency will play a big role and that rationality and good judgement will win out. I’m not betting the mortgage on that outcome.

    PS: Let’s add the significance of government and non-manufacturer investment (e.g., the Prostate Cancer Foundation) to the factors that should be considered in pricing. Of course we already know that it is us patients who play key roles as participants in clinical trials, so maybe drug developers owe us something?!

    I just checked a 90-pill supply of Zytiga (abiraterone), a drug that benefited substantially from government and non-manufacturer funding. The price in my area for 90 pills ranges from about $6,000 to about $6,500, or from about $67 to about $72 per pill. It could be a lot worse, but I’m wondering how the seller factored in the fact that a lot of key development was funded by the public (government) and from contributions. With some drugs running over $100,000 for a year’s supply, I’m thinking some credit may have been given for the public’s instrumental role in funding development of Zytiga. I hope so.

  4. Or “they” could approve HIFU, it works on many, maybe not all, but all the men that I know who have done it. HIFU doesn’t require less of a life style, nor does it require any drugs, it’s pain free and no down time. Then the cost would be around 20,000. Oh … and with HIFU ~ if it doesn’t work you can always do radiation or surgery later.

  5. HIFU isn’t going to help anyone with advanced prostate cancer. They are the people who most need systemic biopharmaceutical treatments that can extend and improve their lives at a cost that they can afford.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: