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The Rising Cost of Cancer Research: Is It Necessary?
By gdpawel at 2014-06-13 21:52
The Rising Cost of Cancer Research: Is It Necessary?

 

Robert A. Nagourney, M.D.

 

For anyone engaged in developmental therapeutics and for those patients who need new approaches to their cancers, an editorial in the Journal of Clinical Oncology casts a disturbing light on the field The authors examine the impact of the growing research bureaucracy upon the conduct of clinical trials. They use Thomas Edison, who filed 1,093 U.S. patents, to exemplify successful trial and error research. By inference, they suggest that if Mr. Edison were working today in the modern regulatory environment we would all be reading this blog by candlelight. While much of Edison’s work focused upon household conveniences like light bulbs and phonographs, the principals that underlie discovery work are every bit the same.

 

http://jco.ascopubs.org/content/32/5/376.full

 

Although regulations have been put in place to protect human subjects, the redundancies and rigorous re-reviews have outstripped their utility for the patients in need. The process has become so complex that it is now necessary for many institutions to use professional organizations to conduct trials that could easily have done in the past by an investigator with a small staff. These clinical research organizations (CRO’s) are under the gun to adhere to an ever growing collection of standards. Thus, every detail of every consent form is pored over sometimes for years. This has had the effect of driving up the cost of research such that the average Phase III clinical trial conducted in the 1990s that cost $3,000 to $5,000 per accrued patient, today costs between $75,000 and $125,000 per patient. Despite this, the safety of individuals is no better protected today than it was 30 years ago when all of this was done easily and cheaply.

 

While funding for cancer research has increased slowly, the cancer research bureaucracy has exploded. One need only visit any medium to large size hospital or university medical center to witness the expansion of these departments. Are we safer? Do our patients do better? The answer is a resounding “No.” In 2013, according to the authors, the average patient spent a mere 53 seconds reviewing their consent forms before signing them, while the average parent, signing on behalf of their child, spent only 13 seconds.

 

The take home messages are several. First, the regulatory process has become too cumbersome. Were this the cost of scientific advance we would accept it as a fact of life, but patients are not safer, trials are not faster and outcomes are not being enhanced. Second, the cancer research process has overwhelmed and undermined cancer researchers. In keeping with Pournelle’s Iron Law of Bureaucracy, “. . . in any bureaucratic organization there will be two kinds of people: those who work to further the actual goals of the organization, and those who work for the organization itself.”Is there anyone who donates to the American Cancer Society who wants their money to go toward more regulation?

 

http://www.jerrypournelle.com/reports/jerryp/iron.html

 

The problem is not with the academic physician. Medical scientists want to do studies. Marching alongside are the patients who are desperate to get new treatments. While many criticize the pharmaceutical industry, it is highly unlikely that these companies wouldn’t relish the opportunity to see their drugs enter the market expeditiously. Standing between patients and better clinical outcomes is the research bureaucracy. Should we fail to arrest the explosive growth in regulatory oversight we will approach a time in the near future when no clinical trials will be conducted whatsoever.



5 comments | 17145 reads

by gdpawel on Sat, 2014-06-14 03:13
Larry M. Weisenthal, M.D.

Health care rationing ... not by ObamaCare, but by private health insurance. The following is really under the radar; to my knowledge hasn't been picked up by any notable media as yet, but it has profound implications.

Basically, Wellpoint Blue Cross is going to pay doctors (in this case, oncologists) bonuses for prescribing what are typically the cheapest drugs. No, this isn't part of ObamaCare. This is purely private sector medicine. If the government ever tried to do this, with, for example, Medicare, there would be a huge uproar. It's actually a form of coerced rationing ... very devious, and, I'd argue, even evil. One would hope that one's cancer doctor would prescribe the cancer treatment which, in the judgement of the oncologist, had the best chance of working for the individual patient. But to give doctors financial incentives to use what are, in effect, the cheapest treatments really turns medical ethics on its head.

WellPoint Offers Oncologists Incentives to Follow Pathways

Will giving oncologists financial incentives to "stay on track" help reign in cancer costs?

At least one insurer, and maybe more in the future, are counting on it. WellPoint, one of the largest health benefits companies in the United States, will begin offering oncologists a monetary incentive for each patient who receives treatment for breast, colorectal, and lung cancer, as specified by one of the insurer's recommended regimens.

The program will begin on July 1, and initially be rolled out in Indiana, Kentucky, Missouri, Ohio, Wisconsin, and Georgia, but is expected to expand to other states throughout this year and into 2015. It will be applicable to fully insured and self-insured members, those with Medicare Advantage, and national account members who live in states in which the program has been initiated.

"This program — while sharing best practices and evidence-based medicine — also helps to support oncologists who require large staffs to treat these complex patients and provides the practice with enhanced reimbursement to offset the lower fees they receive when prescribing less expensive drugs," commented Jennifer Malin, MD, PhD, WellPoint oncology medical director, in a statement.

The WellPoint Cancer Care Quality Program was developed in collaboration with WellPoint subsidiary AIM Specialty Health, and identifies certain cancer treatment pathways that were selected based upon current medical evidence, peer-reviewed published literature, consensus guidelines, and WellPoint's clinical policies. The premise is to support oncologists in identifying cancer treatment therapies that are highly effective and provide greater value.

According to WellPoint spokesperson Lori McLaughlin, if a practice follows the pathways, it will receive a $350 one-time fee at the onset of treatment planning and care coordination.

"The practice will also receive $350 per month per patient while the patient is active in therapy and on pathway," she said. "This should offset on average the difference in what the practice makes from administering more costly drugs, they say. The goal is that the Cancer Care Quality Program is revenue neutral for the practices, but encourages them to follow the best evidence."

Pathways Already in Use

The idea of clinical pathways to guide care is certainly not new, and some data suggest that they can help reduce cost without compromising the quality of care. One study published last year found that an oncology pathways program could save about 15% on cancer-related costs and reduce hospital admissions by about 7%.

As previously reported by Medscape Medical News, this scheme was devised by Cardinal Health, a Fortune 500 healthcare services company that specializes in the distribution of pharmaceuticals and medical products. In partnership with payers, they established evidence-based oncology treatment pathways to eliminate unnecessary medical interventions and promote the most cost-effective treatments to enhance care and reduce costs. In August 2008, Cardinal Health Specialty Solutions partnered with CareFirst BlueCross BlueShield to launch the first cancer clinical pathway in the United States.

"Only recently have we had enough experience, analysis, and data to subject our work to validation and peer review," said Bruce Feinberg, MD, chief medical officer of oncology at Cardinal Health Specialty Solutions, at the time the study was reported.

The Centers for Medicare & Medicaid Services are currently reviewing a proposal from a major consulting company to use oncology clinical pathways in a pilot program designed to control costs and promote more uniform medical practice. The US Oncology Network, a nationwide network with approximately 1000 oncologists, has also developed its own clinical pathways. They have partnered with insurers to use preferred treatment pathways for adjuvant and metastatic regimens in breast, lung, and colorectal cancers.

Patient by Patient

The WellPoint guidelines currently cover breast, colorectal, and nonsmall-cell lung cancer, and WellPoint notes that the pathways are not available for every patient's medical condition but are intended to be applicable for 80% to 90% of patients. According to a document outlining the pathways, "given the complexity of cancer and all of the unique individual circumstances, it would not be possible to have a Pathway for every specific situation. The treating oncologist will determine if, in his/her medical opinion, a Pathway treatment is the best option for a patient or whether, given his or her unique circumstances, another treatment regimen will be a better treatment for him or her."

In an article published in the Wall Street Journal , Richard Schilsky, MD, chief medical officer of the American Society of Clinical Oncology, was quoted as saying that the WellPoint program contains "many of the important elements you'd like to see" in a pathways initiative. However, he also pointed out that this type of program can drive everyone toward getting the same treatment, while "precision medicine wants to drive toward everyone getting unique treatment."

Also reported in the same article, Brian J. Bolwell, MD, chairman of the Cleveland Clinic's Taussig Cancer Institute, said that his institution will participate in the WellPoint program "where it makes sense," and the extra $350 payment "is not something we'd ignore."

Dr. Bolwell said that WellPoint's clinical recommendations were reasonable, but that they were also developing their own treatment pathways, and according to the article, he was also "concerned about facing different recommendations from each insurer."

"We generally don't like to practice by insurance company. We practice by patient," he said.

Citation: WellPoint Offers Oncologists Incentives to Follow Pathways. Medscape. Jun 12, 2014.

[url]http://www.medscape.com/viewarticle/826681

by gdpawel on Thu, 2014-06-19 09:03
How Big Pharma Deals Benefit Oncology

Oncology has big reason to celebrate the unprecedented $20 billion “super-swap” between Novartis and GlaxoSmithKline (GSK), which was announced by the two pharmaceutical giants last month (1).

The term “super-swap” refers to the fact that the Novartis/GSK deal is not, in reality, a merger or acquisition. It is what Novartis called a “portfolio transformation”—a common sense trade of business units between two companies acutely aware of their strengths and weaknesses. A major part of the deal delivers the entire GSK oncology unit—a business that brings GSK an estimated $54 billion in annual revenue from cancer drugs—to Novartis (2).

This means Novartis, the second most profitable pharmaceutical company in the world behind Pfizer, will add GSK's development pipeline of oncology drugs to the nearly 18 oncology drugs in Novartis' current oncology pipeline (3), with the option to rights for future cancer treatments in development at GSK (4). This is a huge leap ahead for Novartis in terms of new drug delivery, and also gives the company a chance to accelerate drug development with one less competitor to have to worry about. In addition, it strengthens Novartis in terms of cancer drugs used in combination treatments because cancer drugs from a single manufacturer can more efficiently be used in combination, a Novartis spokesperson told ChemotherapyAdvisor.com.

What Is the Benefit to the Oncology World?

The Novartis/GSK deal means that the delivery of new and better oncology drugs may be expedited. It is a minimally disruptive agreement in a world where, typically, big money mergers and acquisitions (M&A) between leading competitors typically trigger warnings of disrupted sales channels and a slowed research and development (R&D)(5).

The deal with GSK now means that Novartis has the sizeable resources needed to drive oncology drug R&D, thus keeping pace with accelerating cancer genetics research while avoiding traditional M&A log jams, said Jason Kapnick, MD, assistant consulting professor at Duke University and a practicing oncologist in Florida.

Top 7 Pharmaceutical Companies by Revenue (3)

1. Pfizer
2. Novartis
3. Roche
4. Merck & Co
5. Sanofi
6. GlaxoSmithKline
7. Johnson & Johnson

“This deal is unique. You can't look at it and expect or fear the known results of corporate mergers in other industries,” said Dr. Kapnick. “There won't be an antitrust issue; it won't limit the consumer or the provider. So, in fact, this is the opposite of antitrust, particularly in personalized medicine. Competition does not drive big pharma to innovation anymore. That model is obsolete. Big is better.”

Big has better marketing too. Novartis, whose best-selling medicine is the cancer drug Gleevec, will add GSK's recently approved Tafinlar, a B-RAF inhibitor, and Mekinist, a MEK inhibitor, according to Novartis. These newly approved drugs will likely make their way to patients with cancer sooner given the marketing influence and leadership position of Novartis versus GSK. The end result? Novartis becomes the leader in treating melanoma, said Melissa Elder, an analyst for Kalorama Information, a market analyst group based in New York.

All this begs the inevitable question: In the dispassionate world of big business, why would GSK relinquish such a mature and profitable position in the oncology drug market?

During a conference call on April 22, 2014, GSK CEO Andrew Witty explained, “We're about number 14 in the world oncology market. Novartis is number two. So I believe that Novartis will do better with these (cancer) medicines. I think more patients who need them have the chance to get them with a stronger company.”

The Novartis/GSK deal gives future M&A deals a more benevolent model to work from compared with traditional M&A deals, said Elder. For example, where traditional M&A deals introduce added risk from the adoption of newly acquired product lines, the new oncology R&D projects Novartis brings into its pipeline from GSK actually reduce risk to Novartis because the bigger the pipeline, the more breadth Novartis has to “balance stages of drug development and high- and low-risk projects, including innovative drugs and follow-on products” (3).

Build the Pipeline

In addition to the near-term R&D advantages Novartis receives from GSK, along with opt-in rights to the current and future GSK oncology R&D pipeline, the deal also sets the stage for long-term advantages for Novartis in accelerating the development of new cancer drugs (1). A bigger in-house R&D arsenal “could potentially make it easier for Novartis to create more advanced therapies. It could also mean that Novartis has to do less legwork to create combination therapies or new entities thanks to the large cache of R&D resources it gets from GSK,” Elder told ChemotherapyAdvisor.com.

A Novartis spokesperson told ChemotherapyAdvisor.com that “GSK Oncology strengthens our early- and late-stage pipeline, including a wider range of targeted agents well-suited for combinations. Its deep and broad pipeline of over 30 new molecular entities in development, targeting key molecular pathways in cancer biology, will position Novartis Oncology as a preferred partner for combination agents. It enables us to create a leading oncology pipeline, with a significant amount of planned filings through 2018.”

Consolidation is a key issue right now as a rise in M&A activity in pharmaceutical companies has been taking place. This includes Pfizer's' acquisition of Wyeth in 2009 and its retracted bid for AstraZeneca this month, and Merck's purchase of Schering-Plough in 2009. More consolidation—known as rationalization to economists—is expected as big company resources trump small company agility in the quest for cancer cures, according to Alastair Flanagan, a senior health care partner at the financial analyst firm Boston Consulting Group, New York, NY.

"Oncology is one of the places where there is clearly huge unmet medical need but also a large number of companies active in the field. I would absolutely expect there to be more rationalization," Flanagan wrote (2).

Consolidation between the makers of cancer drugs will result in more consistent pricing and discounting from a single supplier, which will in turn help keep the costs of the drugs low enough for insurers to bear. Here, the oncology drug industry is also beginning to see the value of scale—large companies over smaller start-ups—when it comes to drug pricing, said Seamus Fernandez, an analyst at the brokerage firm Leerink, based in Boston, MA.

"I think scale is starting to be viewed as a critical point in oncology because you need the combinations of drugs from a pricing perspective,” Fernandez wrote (2).

Bigger Is Better

Upon completion of the deal in early 2015, GSK will supply their currently marketed oncology products to Novartis for an initial supply term of 5 years, according to Novartis. This will allow sufficient time to transition product and sales teams and prevent any sudden shock to the drug distribution channel.

Bruce Feinberg, DO, chief medical officer at Cardinal Health Specialty Solutions, in Dublin, OH, told ChemotherapyAdvisor.com that he is not concerned with the supply of—or problems in—delivering current cancer medications. “I haven't historically seen acquisitions create concern for practices before, and I don't believe this case is likely to be different,” said Dr. Feinberg.

Both Novartis and GSK are looking “to try to focus their respective strengths in areas the companies feel will bring them better margins in a demanding pharmaceutical environment,” Elder told ChemotherapyAdvisor.com. “These are two of the largest multinational companies that generally only see limited supply disruptions for cancer products.”

“The economy of scale required to keep up with advances in DNA research and move those discoveries into R&D has enormous requirements. So while it is common to think smaller is better, we should not be afraid of size in the world of big pharma,” said Dr. Kapnick.

References:

1. Novartis AG. Novartis announces portfolio transformation, focusing company on leading businesses with innovation power and global scale: pharmaceuticals, eye care and generics [press release]. April 22, 2014. [url]http://www.novartis.com/newsroom/media-releases/en/2014/1778515.shtml

2. Falconi M, Plumridge H. Novartis overhauls portfolio with deals worth $25 billion—3rd update. Wall Street Journal Online. April 22, 2014. [url]http://online.wsj.com/article/BT-CO-20140422-704792.html

3. Elder M. Top 25 pharmaceutical company pipeline analysis and sales projections to 2023. Kalorama Information. May 2014. [url]http://www.kaloramainformation.com/Pharmaceutical-Company-Pipeline-8102423/

4. Staley O. Novartis to buy Glaxo cancer drugs, sell animal health. Bloomberg News. April 22, 2014. [url]http://www.bloomberg.com/news/print/2014-04-22/novartis-to-buy-glaxo-cancer-drugs-sell-animal-health.html

5. Henske P, van Biesen T. Mega mergers can't cure the pharmaceutical industry. Bloomberg Businessweek Technology. July 26, 2014. [url]http://www.businessweek.com/technology/content/jul2009/tc20090724_243995.htm.

Citation: How Big Pharma Deals Benefit Oncology. Chemotherapy Advisor. June 18, 2014.

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