Cost of Cancer Drugs Is Killing People

The cost of many drugs that treat cancer is so high that many patients simply can’t afford to save their own lives.

That’s the depressing conclusion of a story that aired earlier this month on “60 Minutes.” The report demonstrated not only the expense of treating cancer, but its pervasiveness – more than 1 in 3 U.S. residents, it said, will be diagnosed with some form of the disease.

With that many people and their families affected by cancer, how it is possible that the cost of so many drugs is so high-“astronomical,” as described by “60 Minutes,” – that people can’t even afford their insurance co-pay (their share of the cost), which usually is a much smaller amount than the insurer’s. A cancer diagnosis, in fact, is a leading cause of personal bankruptcy, according to Dr. Leonard Saltz, an oncologist (cancer specialist), at Memorial Sloan Kettering Cancer Center in New York.

The problem is so extreme, said “60 Minutes,” that it “has led to a revolt against the drug companies led by some of the most prominent cancer doctors in the country.” So for some people, what Saltz described as “financial toxicity” is a side effect of the disease.

Generally, the cost for a new cancer drug is more than $100,000 a year. As if that weren’t shocking enough, that drug often isn’t the only one a patient needs; it doesn’t replace other drugs someone is already paying for. “And if you figure one drug costs $120,000 and the next drug’s not going to cost less,” Saltz told “60 Minutes,” “you’re at a quarter-million dollars in drug costs just to get started.”

And consider that these patients and their loved ones are desperate, and often emotionally fragile. They’re extremely vulnerable to pharmaceutical company “authority.” Drug companies say it costs billions to develop new drugs, and that’s why they’re expensive. And they like to blame the high cost on insurance companies because they make patients cover so much of the cost.

The profit motive always rules. In 2012 when Zaltrap was approved for treating colon cancer, Saltz compared it to the older drug, Avastin. They showed identical results, extending survival by an average of about 42 days. Zaltrap cost $11,000 per month; Avastin was about $5,000 per month.

It didn’t have fewer side effects, it wasn’t less toxic … its higher cost did not reflect any sort of improvement or benefit to Avastin.

The course of treatment for patients on Zaltrap would cost nearly $60,000. That meant even Medicare patients would pay more than $2,000 per month as their co-pay. By law, the report noted, Medicare must pay whatever a drug company charges – no negotiation is allowed.

Sloan Kettering decided to pass on Zaltrap because of the financial hit patients would take.

And it got noisy about the situation, blasting what it called “runaway cancer drug prices” in the New York Times. “[I]t was a shot across the bow of the pharmaceutical industry and Congress for passing laws that … allow the drug companies to charge whatever they want for cancer medications,” according to “60 Minutes.” (See our blog, “Cancer Specialists Protest Drug Costs.”)

The cost of cancer drugs also is inflated because oncologists in private practice make tons of money through cancer drug commission. The doctors buy the drugs wholesale and sell them retail to their patients.

“What that does,” Saltz told “60 Minutes,” “is create a very substantial incentive to use a more expensive drug, because if you’re getting six percent of $10, that’s nothing. If you’re getting six percent of $10,000 that starts to add up. So now you have a real conflict of interest.”

“But it all starts with the drug companies setting the price.”

But media coverage “sunshine” seems to be helping: After the New York Times commentary ran, Zaltrap’s manufacturer, Sanofi, cut the price by more than half.

Another “60 Minutes” source from Sloan Kettering, Dr. Peter Bach, said “[I]t was irrefutable evidence that the price was a fiction. All of those arguments that we’ve heard for decades, ‘We have to charge the price we charge. We have to recoup our money. We’re good for society. Trust us. We’ll set the right price.'”

But the lower price, it turned out, was for doctors; patients still paid the high price. As Bach explained, Sanofi told doctors, “‘Buy Zaltrap from us for $11,000 and we’ll send you a check for $6,000.’ Then you give it to your patient and you get to bill the patient’s insurance company as if it cost $11,000. So it made it extremely profitable for the doctors. They could basically double their money if they use Zaltrap.”

And it’s standard industry practice. In the case of Zaltrap, after about six months, when Medicare and private insurers got hip to the doctor’s discount, the price was cut in half for everyone.

It’s not only new drugs that gouge patients. The leukemia drug Gleevec earns more than $4 billion a year for Novartis, $35 billion since it came onto the market. But its cost went from $28,000 a year in 2001 to $92,000 a year in 2012.

The stark conclusion to this tale was voiced by Dr. Hagop Kantarjian, who treats leukemia patients at MD Anderson Cancer Center in Houston: “High cancer drug prices are harming patients because either you come up with the money, or you die.”

Patrick Malone & Associates, P.C. listed in Best Lawyers Rated by Super Lawyers Patrick A. Malone
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