In cancer treatment, is precision medicine more expensive than it’s worth?

Dec 5, 2016 9:30 AM

Cancer is expensive. And precisely targeted cancer is even more costly. 

With specialized oncology drugs now the driving force behind spiking pharmaceutical prices across U.S. health care, cancer treatment highlights the Catch-22 of precision medicine — its life-changing genetic discoveries paired with (at-times) astronomical costs. 

Oncology drugs now range from $90,000 a year to treat prostate cancer to the $120,000 annual price tag for the latest melanoma drug. By 2018, half the money spent on prescription drugs will pay for so-called “specialty pharmacy” — most of that bill will be oncology treatments. Cancer patients increasingly make up a new cohort of 1 percent of the population. And the disparity is forcing geneticists, pharmacists and doctors to evaluate the best ways to apply precision medicine. 

“The majority of [insurance company members are] subsidizing prescriptions written for the 1 percent,” says Diana Brixner, Ph.D., executive director of the Pharmacotherapy Outcomes Research Center. 

The shift in spending is being driven by advances in precision medicine — therapies developed based on complex genetic slicing and dicing to identify gene markers and proteins that make individual tumors vulnerable. But with oncology drug prices growing exponentially each year, doctors, pharmacists and laboratory managers are starting to question whether precisely formulated drug therapies can be cost effective while also providing patients with more quality adjusted life years (QALYs). A panel at the second Frontiers in Precision Medicine Conference Friday explored the growing problem. 

Brixner says the choice may mean picking between equally costly options: one, the proven prescriptions that help cure the scores of Americans treated for Hepatitis C each year, versus the generic drugs developed to treat rare cancer outliers in small numbers of patients. “Precision medicine can help us identify where investment makes sense,” she says. 

Meanwhile, insurance companies also are pushing back on pricey genetic testing—the foundation of precision medicine. For example, lung cancer once was considered a discrete disease treated by a few FDA-approved drugs, says Christopher Corless, M.D., medical director of Knight Diagnostic Laboratories at Oregon Health & Science University. Genetic sequencing of lung cancer tumors has since identified more than a dozen strains, each potentially treatable by unique combinations of drugs. While most insurance companies will pay to screen for three common molecular identifiers, few will pay for the broader genetic screening that might help tailor treatment for many others, Corless says. Screening for the three molecules costs $755 at his lab. Screening for a broader panel is just $60 more. And Medicare will reimburse just $602 for the workup—setting a low bar for what private insurers also will pay. As a result, labs are struggling to cover the cost of potentially lifesaving genetic screening panels. 

“We’re being asked to do this at a loss,” Corless says. “This model of reimbursement isn’t working.” 

Still, those working in pharmacotherapy and oncology believe there is reason for optimism — perhaps with the buy-in of pharmaceutical companies. 

“Pharma is very well aware this can’t continue,” said Craig Nichols, M.D., director of Intermountain Health Care’s precision genomics cancer research clinic. “They are going to have to address drug costs, health economics and value. I’m modestly optimistic that they will not continue to price things at whatever the traffic will bear. 

“It will become more rational soon. Drug companies realize they have to be responsive.”

By: Rebecca Walsh

Rebecca Walsh is a Senior Writer for University of Utah Health Sciences.