Biotechnology Healthcare - September/October 2008 - (Page 47)

HEALTH PLAN CONFIDENTIAL Is It Time To Take a Harder Look at the QALY? Amanda Brower, Senior Contributing Editor H ow much should maintaining a person’s health actually cost? How do you determine that number? Should high-priced biologics be covered under public and private health plans if they are not cost-effective treatment options? These questions often are posed when analyzing the cost-effectiveness of high-priced drugs — investigations that show the relationship between the total cost of treatment and the health benefit achieved compared with not using the treatment. With cancer drugs in particular, the argument can be made that costs are very high compared with the health benefit achieved, which usually amounts to a few extra months of life. In the United States, these questions might be asked behind closed doors, but in the nationalized health systems of the United Kingdom and Canada, they result in the formation of public policy. If drugs are not deemed to be costeffective, patients are denied access to them through their government-sponsored health coverage. With no federal policy in the United States requiring manufacturers to demonstrate that a drug is cost-effective, payers are left to rely on economic analyses — none of which are perfect and few of which are easy to interpret. With biologics triggering calls from payers for robust cost-effectiveness evaluations, existing metrics — such as the unpopular quality-adjusted life year (QALY) — may be worth a second look. NICE says “no” Since 2007, these agents have failed to receive U.K. approval for the following conditions: Advanced and/or metastatic kidney cancer sunitinib (Sutent) bevacizumab (Avastin) sorafenib (Nexavar) temsirolimus (Torisel) Advanced metastatic breast cancer lapatinib (Tykerb) Colorectal cancer cetuximab (Erbitux) bevacizumab (Avastin) Locally advanced or metastatic lung cancer erlotinib (Tarceva) Multiple myeloma bortezomib (Velcade)* Non-small cell lung cancer pemetrexed (Alimta) *The manufacturer rebates the full cost of bortezomib for people who, after a maximum of four cycles of treatment, have less than a partial response. Source: National Institute for Health and Clinical Excellence BREAKING NEWS The June 25, 2008 press release read, “Because insufficient evidence was provided by the manufacturers, NICE is unable to recommend the use of the following treatments in the NHS: bevacizumab….” (NICE 2008). With that, the United Kingdom’s drug watchdog agency, the National Institute for Clinical Health and Excellence (NICE), effectively denied patients in that country access to Avastin, a high-priced, but potentially lifesaving, cancer treatment. The rejection had nothing to do with the drug’s efficacy, but because NICE considered it not to be cost-effective for firstline treatment for non-small cell lung cancer or breast cancer. NICE requested more data from Roche, the drug’s European manufacturer, demonstrating cost-effectiveness, but the company determined that bevacizumab would not meet the agency’s criteria for cost-effectiveness. NICE’s decision was one more added to a long list of high-priced drugs that have been rejected solely because they were considered too expensive (box, left). Michael Rawlins, chairman of NICE, stated in a Financial Times article, “I think the drug companies are really going to have to take a hard look at the value of their products and price them accordingly. If there is a small benefit, they cannot charge premium prices. Traditionally they charged what they thought the market would bear. But we can only afford to pay when the price for innovation is in proportion to what it delivers” (Jack 2008). After NICE’s decision, Roche’s U.K. spokesperson, Greg Page, retorted that “Other healthcare systems seem to think it [bevacizumab] is fairly priced” (Jack 2008). But that may not be the case soon. Although the United Kingdom accounts for only about 3 and a half percent of worldwide pharmaceutical sales, NICE assessments often are used informally in drug price negotiations throughout the world (Office of Fair Trading 2007). With biotech drug prices escalating, a number of countries are looking at NICE’s recommendations closely and discussing the introduction of high technology assessments to judge not only clinical effectiveness, but also if a drug is cost-effective. SEPTEMBER/OCTOBER 2008 · BIOTECHNOLOGY HEALTHCARE 47

Table of Contents Feed for the Digital Edition of Biotechnology Healthcare - September/October 2008

Biotechnology Healthcare - September/October 2008 Openers Editorial/David B. Nash, MD, MBA Contents At a Glance: Multiple Sclerosis Drug Track Personalized Medicine Healthcare Reform’s Effects on Biologic Access Breast Cancer Status Testing: A Crapshoot With Deadly Odds Trends, Issues, and Perspectives In the Management of MS So High-Tech, Yet So Simple The Evolution of Ascertaining the Value Proposition Specialty Pharmacy Employer to Employer Health Plan Confidential Trends

Biotechnology Healthcare - September/October 2008

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