According to a recent report, prescription drug costs rose by more than 12% in 2014 and are expected to continue to rise by more than 7% through 2018.1 In addition, a study of the out-of-pocket costs associated with oncology drugs found that they typically range between $20,000 and $30,000, almost half the average annual income in the United States.2 As such, between 10% and 20% of patients with cancer choose to forgo treatment or compromise treatment plans in an effort to alleviate cost burdens.2
These figures have led to investigation and criticism from government officials, patients, and health care professionals. In July 2015, more than 100 oncologists from the Mayo Clinic (Rochester, MN) released an editorial piece decrying high drug costs and called for immediate action to manage this issue.3 However, many pharmaceutical companies are quick to point out the exceedingly high costs they must absorb just to bring a drug to market, which the Tufts Center for the Study of Drug Development estimated to be $2.6 billion in 2014,4 although this figure has been disputed.5 Likewise, while the oncology drug market may be worth more than $100 billion altogether, these high costs have led to considerable improvement in patient outcomes and quality of life.6 Still, many organizations have launched a number of research initiatives in an effort to make costs more manageable.
The results of these research endeavors have been widely variable, with some suggesting the complete abolishment of the US Food and Drug Administration,7 while others have called for greater regulation more in line with what is seen among European nations.8 Recently, the Centers for Medicare and Medicaid Services announced its own plan for managing costs in the form of revisions to Medicare Part B, which will lower reimbursement on higher-priced drugs to try and encourage more value-based care.9 Yet, one area that is not often discussed, but may be a significant drain on health care expenditures, is the issue of medication waste.
In a study authored by researchers at Memorial-Sloan Kettering (New York City, NY), it was found that the United States is wasting nearly $3 billion a year due to drug waste attributable mainly to oversized vials.10 To dive deeper into this study and to discern why this issue continues to occur, Journal of Clinical Pathways spoke with two of the study’s lead authors, Leonard Saltz, MD, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center, and Peter B Bach, MD, director at the Center for Health Policy and Outcomes at Memorial Sloan Kettering Cancer Center. Both Dr Saltz and Dr Bach have been outspoken about the unsustainable growth of costs associated with cancer treatment.
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Alongside some of your colleagues at Memorial Sloan Kettering Cancer Center, you have looked heavily at overspending in health care due to oversized, single-dose vials of cancer drugs. How did you come to identify this as a significant problem in the industry? Is this a problem unique to infusion drugs, or does this occur with oral therapies and other treatment formulations?
LS: We came across this problem when we looked at the size of the vials that were being used with high-dollar drugs. This was particularly brought to my attention by pembrolizumab (Keytruda), which at first was available only in large 50 mg vials and then was replaced by only larger 100 mg vials. The problem is not unique to infused drugs. Many high-dollar oral medications, which are sold through specialty pharmacies, come only in bulk packaging, with bottles containing a month’s supply and often costing well in excess of $10,000. It is usually not possible to buy a smaller amount; so, especially if doses are reduced, large numbers of pills are often wasted. They are, however, bought and paid for as if they were all used.
In your study, you estimated that avoidable waste from these oversized containers could equate to $1–2 billion. What steps do you think need to be made on the parts of manufacturers and providers to mitigate this problem? What regulatory measures could be taken?
LS: The manufacturers have no incentive to fix this problem, because to do so could reduce their sales. Right now, making the public aware of the massive amount of waste is an important first step. Ultimately, I think the most effective means of solving the problem is to change reimbursement such that payment is given only for that amount of drug that is actually used.
Clinical pathways have been introduced at a number of different health care institutions—including Memorial Sloan Kettering. Do you see them as a possible avenue for helping to solve the issue of rising cancer costs?
LS: I think pathways will offer some benefit; however, they will only be meaningfully helpful if they are adhered to. Much of the cost in cancer care occurs in the care that is given beyond the end of the pathway, when standard, approved agents and maneuvers have been exhausted.
Memorial Sloan Kettering recently received a grant to further investigate evidence-based drug pricing. What, in your mind, does a pricing model based on evidence look like, and how could it benefit patients?
PB: By funding multiple research groups working in overlapping areas of policy and drug economics, the Laura and John Arnold Foundation is creating the infrastructure to test new approaches to pricing and payment that can increase patient access and rationalize the approach to pricing from an industry and policy perspective.
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References
1. Rockoff JA. How do we deal with rising drug costs? The Wall Street Journal. April 10, 2016. https://on.wsj.com/24Gq4E7. Accessed May 9, 2016.
2. Kantarjian H, Steensma D, Sanjuan JR, Eishaug A, Light D. High cancer drug prices in the United States: reasons and proposed solutions. J Oncol Pract. 2014;10(4):e208-211.
3. Tefferi A, Kantarjian H, Rajkumar SV, et al. In support of a patient-driven initiative and petition to lower the high price of cancer drugs. Mayo Clin
Proc. 2015;90(8):996–1000.
4. Cost to develop and win marketing approval for a new drug is $2.6 billion [news release]. Tufts Center for the Study of Drug Development Web site. https://bit.ly/1ZwUYbh. Published November 18, 2014. Accessed May 9, 2016.
5. Avorn J. The $2.6 billion pill--methodologic and policy considerations. N Engl J Med. 2015;372(20):1877-1879.
6. Herper M. The Cancer Drug Market Just Hit $100 Billion And Could Jump 50% In Four Years. Forbes. May 5, 2015. https://onforb.es/1T6It7J. Accessed May 9, 2016.
7. Henderson DR, Hooper CL. To Increase Innovation and Make Drugs More Affordable, Deregulate. Journal of Clinical Pathways. 2015;1(1):25-27.
8. Daniel H, Health and Public Policy Committee of the American College of physicians. Stemming the escalating cost of prescription drugs: a position paper of the American College of Physicians [published online ahead of print March 29, 2016]. Ann Intern Med. doi: 10.7326/M15-2768.
9. CMS proposes to test new Medicare Part B prescription drug models to improve quality of care and deliver better value for Medicare beneficiaries. Centers for Medicare & Medicaid Services Web site. https://go.cms.gov/1T72qrM. Published March 8, 2016. Accessed May 9, 2016.
10. Bach PB, Conti RM, Muller RJ, Schnorr GC, Saltz LB. Overspending driven by oversized single dose vials of cancer drugs. BMJ. 2016;352:i788.
