A recent New York Magazine front page headline, “The Cancer Drug Racket,” highlighted an investigative report (1) about the increasing costs of cancer drugs in America. This article describes the anger felt by Leonard Saltz, director of G.I. Oncology at Memorial Sloan-Kettering Cancer Center when he was asked to approved an exorbitantly priced a new cancer drug, Zaltrap, very similar to several medications already on the Memorial formulary. This article highlights what I consider to be the tip of an iceberg, the dramatically escalating cost of new cancer drugs that are quickly outstripping the ability of the nation to pay. In this new era of personalized medicine, a few of these drugs may someday markedly improve the survival of some cancer patients. However, the majority of these “promising” drugs often gain approval after “eeking” out a small, though “statistically significant” increase in survival or response in clinical trials but at what cost? A huge price tag that is often associated with significant toxicity. As noted by Light and Kantarjian in a commentary in the journal Cancer this month (2), twelve of the 13 new cancer drugs approved in 2013 carry an average annual price of ~$100,000 while only one has demonstrated improved survival greater than 2 months. Because of the enormous financial benefit to the drug manufacturer, there’s a premium on developing such targeted drugs. Because of the significant shift in the financial incentives as well as the attraction of being at the frontline in cancer drug development, many of my colleagues have left the practice of medicine for more lucrative positions in the pharmaceutical world. Very few medical oncologists who continue to treat cancer patients on a daily basis can afford to practice in an outpatient private practice setting. Why? Because of the lack of affordability and the financial risk to provide these medicines. In my final year in private practice, my monthly pharmaceutical costs exceeded half a million dollars. With reimbursement by insurance companies close to or below cost, as well as delays and denial of payment, it simply became financially unsustainable.
As a result of this new reality, there is the increasing consolidation of cancer therapies into large institutional settings such as hospital-based clinics and specialized cancer centers. Many medical oncologists are leaving private practice for hospital-based positions or are choosing to retire early. In this setting cancer care is BIG BUSINESS. One disturbing trend is the recent announcement of the opening of outpatient cancer treatment centers by non-medical organizations, including a large grocery chain in the Midwest! (3). Yes it’s hard to believe and let me tell you about some of the ramifications. Continue reading