Specialty Pharmacies Grapple with Assessing Costs and Value of Oncology Therapies


Drugs that provide only incremental benefit may not be included on clinical pathways.

There has been a rapid increase in the costs of oncology drugs, but often they are not priced based on the value they provide, according to Andrew Hertler, M.D., chief medical officer of New Century Health, a specialty care management company focused on oncology and cardiology in Brea, Calif.

The value of new oncology therapies comes from increasing survival and improving the quality of life for patients, but newer therapies only provide incremental benefit that comes with a high price tag. “In 2020 alone, the average prices of new drugs coming to market [were] between $100,000 and $200,000 a year, with some drugs costing as much as $400,000 for an individual dose,” he said in an interview with Formulary Watch®.

Competition from newly approved therapies in the same class hasn’t worked to lower the cost. “Prices go up about 10% a year at pricing that is determined by what the market will bear. Patients really don’t have an option, because they want to live. We don't really have a shock on the price,” Hertler said.

An example, he said, is the checkpoint inhibitor class. Merck’s Keytruda (pembrolizumab), the first checkpoint inhibitor that targets the PD-1/PD-L1 pathway, was seen as a breakthrough when it was approved in 2014 for advanced melanoma. Since that time, it has received additional approvals and is now approved for 30 indications, with the most recent being for the treatment of patients with high-risk early-stage triple-negative breast cancer (TNBC) in combination with chemotherapy before surgery and then continued as a single agent after surgery.

Today, Keytruda has a wholesale acquisition cost of $10,067 when given every three weeks, compared with a monthly cost of $8,725 when it was approved. Since then, several other PD-1 checkpoint inhibitors have become available, including Bristol Myers Squibb’s Opdivo (nivolumab), Genentech’s Tecentriq (atezolizumab), and Regeneron’s Libtayo (cemiplimab).

The newest innovations, the chimeric antigen receptor (CAR) T-cell therapies, have an even higher price tag, especially when the total cost of patient care is considered. In fact, the total cost of administering CAR T-cell therapies averaged more than $700,000, and in some cases exceeded $1 million, even though the wholesale acquisition cost of the treatment is $373,000, according to data from a recent real-world data study from Prime Therapeutics in Eagan, Minn.

Over two-and-a-half years, Prime investigators looked at 74 members of Blue Cross and Blue Shield plans who received Novartis’ Kymriah (tisagenlecleucel) or Kite Pharma’s Yescarta (axicabtagene ciloleucel for the treatment of B-cell lymphoma.

The cost for CAR-T medication alone was $527,000 on average, which was 74% of the total cost during the initial treatment period. However, 12% of patients with post–CAR-T events incurred more than $1 million for their total cost of care, including drug and other costs, such as infusion center visits or transplants.

A 2018 Institute for Clinical and Economic Review report estimated the cost-effectiveness of the two CAR-T therapies in B-cell cancers and suggested the therapies are priced in alignment with their clinical value, despite their high price. According to the report, the cost-effectiveness of both CAR-T therapies fell near or within commonly cited thresholds of $100,000 to $150,000 per quality-adjusted life years (QALY). Because ICER’s study only estimated total treatment cost, Prime’s real-world evidence is another barometer to consider when evaluating whether CAR-T’s pricing is in line with value.

“Realistically, there has to be a consensus solution for these high costs,” Hertler said. “What we can do as physicians is to follow the clinical pathways for any clinical situation for what is the highest value drug. To me, if a drug just isn't that good, we shouldn’t use it. We routinely see approved drugs with 1.4 months to 1.6 months improvement in progression free survival. For marginal drugs, we don’t have to put them on our pathways.”

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