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Cancer Patients Forgive ICER,  For They Know Not What They Do!

5/23/2016

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Let me call this PETERSEN's HYPOTHESIS!  Who  supports new drug development in the world?  I would argue it is the country that pays the most for all of the drugs!  What country might that be?  It is the USA!  The global pharmaceutical's market is worth US$937 billion a year. CLICK HERE for their report.  And without private insurance included the US Medicare part B and D drug spending is  $143 billion. Total US yearly drug sales are $374 billion.   We are 5% of the world's population, but with private insurance 40% of global drug spending.  So historically, we have been the new drug development engine for  the world.  What has been the benefit from this effort and use of our treasure?  We have had first access to most of the new drugs because we do not have limits by government on what we can or can not prescribe for use.   And insurance companies have always had the opportunity to raise rates to maintain their profit margins while still allowing the use of these drugs.  We insured patients, then had the benefits of the first use of these drugs.  Other major countries (with national heath care) usually would follow if the USA had shown adequate benefit from the use of these drugs over time.  What is the cost of this to the USA?  We spend 19% of GDP for health care while Europe spends less than 9%, and the rest of the world spends less than that.   What is the major difference in the two systems?  Europe has nationalized health care and no one has to pay out of pocket for premiums or copays, but it comes at a cost.  They  have much less to spend on health care so they must find a way to allocate the limited money they have.  They use allocation methods like the UK's NICE (National Institute for Health and Clinical Excellence),  this is a special mechanism the UK created in 1999 during a period of budget cuts to enforce the reduction in medical treatment provided to Britons through its National Health Service (NHS), which was established in 1948.

NICE developed a mechanism which valued a quality year of life(QALY) at about $50,000, and would approve drugs which met this threshold, and decline those that cost more than this.  So why does this have anything to do with the pay for service system we have in the USA?  Well, new and old drug prices have  had an explosion in prices, and this has put great pressure on insurance companies and the Medicare system.  They looked to find ways to limit their exposure to these price increases. Therefore  they looked to the European system as a way to do this.  An independently funded program(money from insurance companies) called ICER(Insitute for Clinical Economic Review) was developed in the US to provide similar computations for the US that NICE has provided for the UK.  A recent program has been completed for Relapsed Refractory Myeloma, and Blue Cross Blue Shield of California made the following statement about this preliminary report. BC BS of California plans to use the ICER research  to determine which drugs to pay for.

Another very important consideration of using a system like ICER in the USA to  limit  drug use is the mere fact  we pay twice as much for drugs in the USA than in Europe. This is because by law(via the drug lobby) Medicare cannot negotiate prices with drug companies like European countries can.  So we pay twice as much for our drugs as does the UK.  What this means if the (Quality Adjusted LIfe Year) QALY in Europe for Revlimid was $50,000 and approved for use, it would be $100,000 in the USA because drugs cost twice as much in the USA vs. in the UK.  This would mean that unlike today without ICER, Europe would have drug approvals well before we ever get them, If we ever get them.

If this becomes the norm, we will have the cost of a market driven health care system (19%) without the only benefit we get from our system, which is the first use of these new drugs.    We would lose the benefit without the advantages of the low cost health care system of the Europeans.  Given a system with no advantages over a nationalized health care system which costs twice as much, this would surely make a USA nationalized heath care system a rational outcome.  We could at least save the 9% of GDP.  However, without the US market to pay for the first use of new drugs, drug development would not only suffer, it may just disappear. Let me call this PETERSEN's PROPHECY!

Good luck and may God Bless your Cancer Journey.   For more information on multiple myeloma survival rates and treatments CLICK HERE and you can follow me on twitter at: https://twitter.com/grpetersen1



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Did You Know?? Major Changes Are Coming To Medicare For All Cancer Patients!

5/12/2016

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Most people are unaware of what is happening with the payment system for Medicare Part B, or the new ICER report which may limit your cancer treatment options, but they are just on the horizon.  These changes have been initiated to confront the out of control price increases for existing cancer drugs and the outrageous prices for the newly developed drugs. World renowned hematologist oncologist Dr. Vincent Rajkumar of Mayo Clinic will be featured on Cure Talks to help to explain these proposed changes, along with his ideas on how to help control the high cost of cancer care.  This is a can not miss opportunity to find out about these proposed changes.  This broadcast will be on May 19th, at 6:00PM EST, and you can learn more about it and sign up to listen if you CLICK HERE.

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Will The ICER Report Leave Cancer Patients Out In The COLD?

5/1/2016

5 Comments

 
PictureDon't Be Left Out In The COLD!
I have never seen such a viral negative patient response like the one I see centered around the new ICER myeloma report.  ICER(Institute for Clinical and Economic Review) put out a 138 page report intended to place a value on various treatment regimens for relapsed, refractory multiple myeloma.  It was an attempt to compare different treatment options and find one which fits into their framework of a cost  preferably  less than $50,000 but no more than $150,000 per year of added life.    Sounds like a noble effort, but the devil is always in the details.  I have looked at the analysis and will provide you with my patient centered evaluation of this ICER report. 

The genesis of the ICER project or the elephant in the room is that some companies use patent protection to exercise monopoly pricing, and our government will not hold them to account.  Like utilities, drug prices should be reviewed by a pricing review board. Those companies which have not acted in the public interest should be broken up into smaller units, just like the oil and railroad monopolies were. This resulted in the anti trust laws which could be used to control drug company greed.  But I am so naive to really think our government would ever "Bite the Lobbyist that feeds them".
    
The ICER report looks like a lot of work and brainpower went into this effort, but unfortunately it is like reading a 5 year old newspaper.   A lot a great names in the stakeholder and list of sources pages, and I congratulate all who attempted to wrestle this elephant to the ground. The reason this is happening is because some drug companies have used their patent protection and monopolist position to exploit the current system.  Some companies are making 25 to 50% net income after taxes, which is monopolistic and criminal in my opinion, and increasing prices on existing drugs by 20 to 100 times inflation(700 to 5000% in 5years), or in other words with no justification at all other than they can.  Instead of taking on the core problem, the ICER report seems to focus on saving the insurance companies money at the expense of the patient population.  My evaluation of the report is as follows:

Major Flaws which skew the outcomes are as follow:


Probably the most outrageous assumption in the analysis is the concept of QALY(quality-adjusted life year), where  the value of a year of life is reduced to a fraction of a year the sicker the patient . For example in the extreme case of a person who is bedridden and unable to care for themselves, the value of a year of life is actually negative.  Does this then suggest euthanasia?  That is just plain SICK! For me and most cancer patients, each year of life becomes far more valued than when we were not sick.  If I just have 5 years to live, like most myeloma patients, and my life expectancy if well is 20 years, I can argue my year of life has 4 times more value than that of a person who is perfectly healthy.   

LD or Lenolidamide and high dose Dexamethasone would almost never be used as a 2nd or 3rd line of therapy.  In general a patient would be refractory to Lenolidamide during their first line treatment, so the use of this as a 2nd therapy seems outrageous.

I see the base treatment is LD for all  2nd and 3rd lines of therapy, but this is not even a first treatment for many. Mayo Clinic's mSmart treatment recommends VRd for first line treatment. If VRd replaces LD in the analysis the difference in cost between regimens would be much less.

Also VRd vs LD has in early treatment shown a 1 year better OS(overall survival), but only 4 months in the secondary setting.  If VRd was substituted for LD as the base case it would have a yearly cost in the $500,000 range with one year increase in OS, so there is nearly no major difference in the cost between all regimens and the study results would have no major differences in cost or outcomes. The logic collapses if we use real world recommended treatment regimens.  

My take on it is that given the current cost of drugs the incremental benefit in the 2nd and 3rd line of treatments is not really good, but not much different to the cost of VRd. This would tend to support the hit it hard up front strategy, and to find and treat myeloma early before it morphs into more aggressive clones.

During my first job I worked with product costing and cost analysis in a very competitive industry. You set your price based on the fixed and variable costs and the competitive environment, and not based on monopoly pricing of whatever the traffic will bear.  With higher volume the fixed and overhead costs per unit go down due  to the economies of scale.  This would result in the cost and therefore price of drugs for high volume diseases like breast, lung and colon cancer, to be far less expensive than drugs for orphan diseases.  Prices of 25 to 50% less should be possible.  If the pricing of a drug is totally inelastic, and usage is unaffected by the laws of supply and demand then it is monopolistic (made by the government patent protection) and there are laws for that.  If drug pricing was market driven, then the cost of drugs for the major cancers should be significantly lower. 

Also if a drug's price is set correctly the first time based on a good costing model, the price should change yearly by the inflation rate, or if indexed more than once the costing professional who set the price should be looking for another job.

My last point is that Medicare, and Private Insurance are there to spread the risk.   We pay in for years hoping we will not have to use the benefits, but when we do have a heart attack or cancer we know that we should have this protection, and should never think we are just not worth the cost of saving our life. We paid for this protection and we deserve to get what we have paid for.  As the insured we all pay in so that some of us who are less fortunate who become really ill, can obtain the expensive life saving heath care we insured have paid for in full. 


Good luck and may God Bless your Cancer Journey.   For more information on multiple myeloma survival rates and treatments CLICK HERE and you can follow me on twitter at: https://twitter.com/grpetersen1

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    Gary R. Petersen
    [email protected]
    CLICK HERE for my myeloma journey

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