Efficacy and cost-effectiveness

Efficacy and cost-effectiveness

Posted by Bill Wood, MD May 5, 2009 01:51 PM

Greetings again to all of my loyal readers. I thought that today I’d talk a little about the application of cost-effectiveness studies to modern cancer care.

I was stimulated to think about this by a recent brilliantly insightful editorial in the Journal of Clinical Oncology in which Dr. Bruce Hillner and Dr. Thomas Smith comment on a recent cost-effectiveness study to ask some important questions about what we are (or should) be willing to pay for and how we decide whether or not a treatment is worth it (Journal of Clinical Oncology. 2009;27:2111-2113). The editorial was written in response to a cost-effectiveness study of a metastatic cancer drug that showed the incremental cost-effectiveness ratio of the drug to be approximately $360,000 per quality adjusted life year.

I think that the editorial is worth a read for a few reasons. First, it provides a primer on basic principles of cost-effectiveness research — the use of cost-effectiveness “thresholds” (e.g., the traditional $50,000/year for dialysis, perhaps upwardly adjusted for inflation or indexed to GDP), the value of using quality of life adjustments in cost-effectiveness analyses, and other issues. Second, and as importantly, it talks a little about how to use these principles to analyze newer therapies on the market. And in the most “sound-byte”ish piece of the commentary, in reference to cancer drug pricing that is independent of cost-effectiveness analysis, the authors state: “The price … can be justified only by following a logic of pricing other new cancer approvals independent of the absolute or duration of benefit, clustering between $5,000 to $7,000 per month. Profiteering, the act of making a profit by methods considered unethical, such as raising prices after a natural disaster, is a pejorative term that we believe can be applied to this recent trend where a life-threatening disease is the natural disaster.”

Like it or not, discussions and commentaries like these will become more commonplace as health care reform, and the rising costs of cancer care, take center stage. It would behoove us all to become familiar with the rules of engagement. I sincerely hope that we will be able to find the right mix of thoughtful incentives and analyses so that truly effective new drugs are rapidly approved and made available, at fair prices and used in the right way, to patients who need them.

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