The quest for the in medio stat virtus price in the oncology sector

Introduction

As new products are launched in the oncology market, targeting different conditions with variable results, they share one common feature: their soaring prices that culminate in health agencies travailing to satisfy their needs¹. Indicatively, the prices of new oncology products in the US have demonstrated a 5–10-fold increase during the last 10 years, while in 2014 all new products consistently exceeded the 100,000 USD annual cost barrier². In the US, over a period of 8 years the prices of existing products increased by 18% (inflation adjusted), largely unscathed by the competition³. In the EU, a similar pattern was reported⁴, thus forcing the European Commission to launch its first investigation to scrutinize the excessive pricing of oncology products⁵.

Current pricing models seem to fall short of adequately coping with the pricing saga of oncology products, since it was proved that the clinical effect has little correlation with prices, which are usually set to reflect what the market can bear^1,2. Specifically, it was reported that there was no significant difference in the price of drugs pertinent to whether they were approved on the basis of overall survival (OS) or progression-free survival (PFS). More worryingly, the lack of a relationship between the percentage improvement in PFS or OS and drug price was underlined. In addition, there was no significant relationship between price and the percentage improvement in the reported end-points². Barnes et al.⁴ reported an increase of oncology medicines’ prices between 2000 and 2015, while no significant commensurate correlation between pricing and efficacy was demonstrated. This was aligned with recent findings from Davis et al.⁶, who argued that most of the oncology products approved by European Medicines Agency between 2009–2013 did not demonstrate a benefit on survival or quality-of-life. This lack of efficacy perpetuates and, after an average of 3.3 years following their launch, there were still insufficient data to suggest that these products extended or improved life^1,6,7.

Apart from the prices, the volume of oncology products raises, albeit with a lower rate. The life-expectancy increase, coupled with the introduction of newer products, leads to more therapeutic options to patients who couldn’t tolerate older agents, as in the case of prostate cancer with abiraterone and enzalutamide over docetaxel and cabazitaxel⁸, a feature that further contributes to the mounting financial pressures in the specific sector.

There is also a paradigm shift in the therapeutic regimens which foments financial troubles, due to the focus in multidrug combinations, as attested by the use of combination regimens to 25.6% of eligible oncology patients, in contrast to 6.9% corresponding use in other healthcare sectors⁹. Consequently, this, interweaved with the increased potency of the new agents (either as OS or PFS increase), underlines the cumulative impact on health expenditure.

The oncology sector exerts an emotional effect which accounts for some of the particularities that we frequently encounter when we scrutinize its pricing and reimbursement narrative. This is imputed to the disease’s very nature, based on the confluence of despair and fear of death, which has permeated the collective consciousness of all stakeholders involved. In certain cases, this may have overwhelmed a more rational decision-making approach, which escalates to the compassionate use of products, even in cases that, from a medical point of view, the product would be of no value to the patient¹⁰.

A virtual monopoly is ingrained in the oncology sector, nested to the strict sequential use of products, as dictated by the widely endorsed clinical guidelines. This monopoly refutes the common perception that the introduction of new agents—by 2020 more than 100 products are anticipated to enter the oncology market¹¹—would enhance competition in this market segment. While certain exceptions apply, such as testicular cancer and blood cancers, the majority of other cancers are incurable and disease progresses quite rapidly. These attributes aggravate the pressure towards the physicians to use all therapeutic options sequentially, thus fortifying the monopoly barriers. Several countries have also created the so-called “price-regulation eco-system”, using dedicated funds for oncology patients. In many cases, this may help overlook the value factor of the products, thus bolstering the fragmentation of oncology from other healthcare sectors, setting apart their reimbursement policies and crowding out their funding as well¹².

We should also underline a key attribute of oncology products, their lack of elasticity. Even in other conditions with significant debilitating effects, such as rheumatoid arthritis and multiple sclerosis, the overall spending would retreat by 21% if the co-payment doubles. Nevertheless, in the oncology sector, doubling of co-payment would escalate to a marginal 1% decrease of overall spending. Primary care would face the highest reduction between 30–50%¹³.

Primary healthcare can also benefit from generics, however this gain is virtually¹⁴ neutered in the case of cancer care. In the oncology sector, an old product may be combined with an older product as in the case of trastuzumab with etamsine. It may also be replaced by a new analog, which in certain cases can be a liposomal or protein bound of an existing substance, on the grounds of “superior quality of life”, “safety and tolerability”, even if a longer-overall survival, the gold standard end-point in oncology treatment, is not proved¹⁵. This is further compounded by the introduction of biosimilars, tantamount to generics, which are subject to a stricter regulatory framework. This effectively wanes any potential for significant savings.

What’s the way forward?

At the Delphi Oracle, the cradle of wisdom in Ancient Greece and the place where Pythia, Apollos’ priestess answered people’s questions, in a prophetic albeit sibylline way, an engraved phrase Μηδέν Άγαν —in medio stat virtus—[nothing in excess] stands out. Extrapolating this in the oncology sector, the goal would be to pursue an in medio stat virtus price, which could be defined as the one that sustains the dynamic efficiency of the industry without “profiteering”, that is capitalizing on life-threatening conditions with unethical methods¹⁶.

The oncology sector has some distinct characteristics that necessitate a tailor-made approach. Cost-containment approaches that have been widely implemented in primary care, such as the use of co-payments, didn’t demonstrate any efficacy. On the contrary, due to the high costs incurred, it may exacerbate inequalities in access to care and hinder access. In certain countries, this may as well spiral to financial toxicity, which affects people exposed to co-payments for costly novel treatments and for an extended treatment duration¹⁷.

Value-based pricing has been put forward as a tool to mitigate the risks and tag a price that is equivalent to the tangible and intangible values that a product renders to the system¹⁸. Nevertheless, it does not take into account need, prevalence, or affordability¹⁹. However, the need and prevalence can be addressed with the use of disease-related thresholds, in which rare and more debilitating diseases can be granted a higher willingness-to-pay threshold. For instance, by capitalizing on WHO recommendations, we could save the 5× GDP thresholds for the aforementioned health conditions²⁰.

Stakeholders should corroborate on the rhetoric that influences pharmaceutical pricing. Partially, this stems out of the Research & Development (R&D) costs, which are frequently utilized as the spearhead for high prices. It is imperative to sustain the dynamic efficiency of the pharmaceutical industry, since—despite the remarkable progress—we still witness failures of medicines in many health conditions. Nevertheless, the industry has a vested interest in inflating their R&D as a pretext for price premiums. Fifty per cent of estimated R&D costs are defined as of the cost of capital, which corresponds to an estimated 11% return on funds invested, an opportunity cost given the specific R&D projects not undertaken. However, R&D should not be concomitantly considered as long-term capital investment and ordinary business expenses, which can be fully deductible each year, thus almost half of R&D expenses burden taxpayers. In the same context, the risk of failure should be clearly scrutinized and elucidated. Although some products fail at the costlier phase III clinical trials, which unavoidably will shift the cost to the next product that will enter the market, in certain cases the “failure” of a drug is mistakenly used, instead of “withdrawn” of the product, which can be the aftermath of a business perspective and strategic prioritization of a company’s portfolio²¹.

DiMasi et al.²² underlined another major source of cost-reporting bias: the use of mean instead of median. The mean can be easily affected by outliers; therefore, it may broadcast an inflated and skewed snapshot of the cost. The use of median could lead to a more realistic result, further reducing the inflated R&D costs²³.

The duration of the trials was also debunked as a crucial factor in the price saga, especially in the oncology sector²⁴. Also, the costs of the initial phases of R&D are somehow over-estimated, since the initial screening is performed with simulation, which bears low costs²².

Several authors have put forward the notion of validated tools to assess the magnitude of clinical benefit for cancer medicines aiming to underpin the sustainability of health systems. These include the approach elaborated from the European Society of Medical Oncology²⁵, for which several variations have been advocated^26,27.

Therefore, all social stakeholders should collectively get a firm grasp of the bleak reality that the current relentless price increase will cascade to the financial strangulation of health systems. Therefore, they should precisely measure both actual costs incurred and the value that oncology products confer, in spite of the vagueness of its definition, and reward accordingly, thus instilling the in medio stat virtus notion.

Transparency

Declaration of funding

There is no funding to report.

Declaration of financial/other relationships

The author has disclosed that he has no significant relationships with, or financial interests in, any commercial companies related to this article.

Acknowledgements

None reported.