PerspectiveIn the Journals

Experts: Cancer drug waste costs $2.8 billion annually in the U.S.

Show Citation

March 4, 2016

The manufacture of cancer drugs in single-dose vials that exceed the amount of drug administered to the average patient led to leftover drugs discarded as waste that amounts to $2.8 billion annually in the U.S., according to researchers.

“This is all due to decisions about how much drug companies decide to put in each single-dose vial. They almost certainly realize how these decisions translate into revenue,” Peter B. Bach, MD, director of the center for health policy and outcomes at Memorial Sloan Kettering, told HemOnc Today. “Vial contents can be selected to minimize rather than maximize waste, saving the U.S. health care system and patients billions of dollars. This is a rare opportunity to lower costs for patients and our health care system in a manner that cannot adversely affect health outcomes.”

Steven Bach

Peter B. Bach, MD

Bach and colleagues examined the top 20 cancer drugs that are dosed based on body size and packaged in single-dose vials. They calculated the total amount of leftover drug and resulting 2016 revenues after adjusting for vial sharing, which they estimated based on how often claims filed with Medicare included drug amounts that did not total the full vial contents.

Overall, they found 18 of these drugs are sold in only one or two vial sizes. Total revenue from the 20 drugs is expected to yield approximately $18 billion in 2016, 10% of which —  or $1.8 billion — will be derived from waste from discarded drugs.

Additionally, the markup for drugs by doctors and hospitals when they bill for them varies considerably. The markup is currently 4% for Medicare — although it can go as high as 6%, as set by the U.S. Congress — but, for commercial insurance, approximate markup is 22% for doctors and 142% for hospitals. For hospitals who have a 340B designation, the markup is approximately 58%.

In total, Bach and colleagues estimated that profit to doctors and hospitals from billing for leftover cancer drugs based on these markups will exceed $1 billion in 2016.

“It may have been reasonable to waste a quarter of a vial of drug when the vial cost $20 or $30, but now we are talking about vials that cost up to $30,000 or more each,” Leonard Saltz, MD, chief of gastrointestinal oncology service at Memorial Sloan Kettering Cancer Center and a HemOnc Today Editorial Board member, told HemOnc Today. “Wasting any meaningful percentage of a such a vial is just not reasonable.”

Size matters

Because of safety concerns, extra drug left in the vial usually is discarded. Safety standards set by the U.S. Pharmacopeial Convention allow sharing if it occurs within 6 hours in specialized pharmacies.

The proportion of a drug that is left over varies depending on vial size, but ranges between 1% and 33% for the top 20 cancer drugs.

For example, researchers estimated 7% of each vial of rituximab (Rituxan; Genentech, Biogen Idec) — a drug indicated for the treatment of non-Hodgkin’s lymphoma, chronic myeloid leukemia and other conditions — will be discarded, leading to about $254 million in waste in 2016. Further, 33% of the multiple myeloma drug carfilzomib (Kyprolis, Onyx) will be discarded, wasting about $231 million.

Other drugs fall somewhere within this range. The leukemia drug bendamustine (Treanda, Cephalon) is sold in a variety of single-dose vials (25 mg, 45 mg, 100 mg and 180 mg) that can be combined for patients, resulting in approximately 1% of the drug wasted.

However, bortezomib, (Velcade, Takeda) is only available in the U.S. in one size — a 3.5-mg vial. The average required dose, according to the researchers, is 2.5 mg. That means that as much as 30% of bortezomib’s sales ($309 million) are from discarded drug.

Bach, Saltz and colleagues also noted that bortezomib is only sold in the larger-sized vials in the U.S. and is available in 1-mg vials in the U.K.

“This isn't an accident,” Saltz said. “No drug company is reacting to this story with ‘my goodness, we didn't realize; we'll fix it right away.’ The fact that several of these drugs are available in Europe in smaller vial sizes, and that these smaller vials are not available in the U.S., shows just how deliberate and calculated this is. It is a means of driving up revenue, pure and simple.”

Another example of this disparity is pembrolizumab (Keytruda, Merck), an immunotherapeutic agent that is approved for some patients with non–small cell lung cancer or advanced melanoma.

When initially approved by the FDA in September 2014, it was available in 50-mg vials in a powder that needed to be reconstituted as a liquid. That changed in February 2015, when it was only available in 100-mg vials of liquid in the U.S.

However, when pembrolizumab was approved in Europe in July 2015, it was sold there as a powder in 50-mg vials.

The average dose of pembrolizumab is 140 mg. When using the 50 mg vials, only 10 mg would go to waste. However, using the 100-mg vials, 60 mg is discarded with each use.

This change increased the revenues for Merck from $500 to $3,000 for a single dose of pembrolizumab.

“The fact that we have allowed ourselves to be comfortable with this practice of throwing billions of dollars of drug each year literally into the trash is indicative of how numb we have become to wasteful, low-value practices in oncology,” Saltz said. “This is the ultimate low-value, high-cost care: it is no-value, high-cost care.”

Reducing the waste

Bach, Saltz and colleagues offered ways to reduce or eliminate paying for leftover drugs. They suggested requiring manufacturers to provide drugs in a reasonable set of vial size options to ensure the amount of waste is low, recommending that threshold be 3%.

Additionally, they offered additional vial sizes for each of the 20 drugs examined that would greatly reduce the waste and create significant savings.

“If all of our suggestions were adopted, it would lower revenue from leftover drug from $1.8 billion to $400 million and, including the reductions to doctor and hospital markups on leftover drug, would save around $2 billion in total,” they wrote.

An alternative option is to allow manufacturers to continue to determine the vial size, but to mandate that they refund the cost of leftover drug through certified dispersal and virtual return.

A problem that exists in clinical practice is the change of dosing from one based on body size to a fixed dose to use the entire vial. This results in some patients receiving too high a dose, whereas other patients do not receive enough. Bach, Saltz and colleagues noted this does not reduce wasteful spending on leftover drug, it “merely changes clinician behavior from discarding leftover drug to infusing leftover drug into patients.”

The researchers recommended policy makers revisit FDA guidance on packing on infused single-dose vial drugs, and suggest the FDA, CDC, CMS and U.S. Pharmacopeial Convention agree on new views of vial sharing.

“Such steps could lead to savings for our health care system without sacrificing health outcomes,” they wrote. “Opportunities to eradicate waste of this kind are rare.”

Still, an underlying problem may exist even with these changes, Saltz said.

“Even if we somehow could compel the companies to provide less-wasteful vial sizes, there is nothing in the current system to keep them from raising the price as high as they like to ‘recoup’ the losses,” Saltz said. “Doesn't that say something about just how broken our system is?” – by Anthony SanFilippo

For more information:

Peter B. Bach, MD, can be reached at bachp@mskcc.org.

Leonard Saltz, MD, can be reached at saltzl@mskcc.org.

Disclosure: Bach reports personal fees from Defined Health, Genentech, Novartis and other companies. Saltz reports grants from Taiho Pharmaceuticals. Please see the full study for a list of all the researchers’ relevant financial disclosures.

itj+ Perspective

PERSPECTIVE
J. Leonard Lichtenfeld, MD, MACP

J. Leonard Lichtenfeld, MD, MACP

The recent paper from Bach and colleagues in British Medical Journal points out a surprising way pharmaceutical companies may be driving up the already substantial cost of newer cancer treatments.

The authors, through modeling of available vial sizes and typical treatment costs, show billions of dollars’ worth of medications are discarded because of leftover medications in single-dose vials, which they say contributes to the rapidly escalating costs of available targeted and immunotherapeutic agents. The implication is that by "right sizing" the available vials, we could save billions in cancer treatment expenditures.

That is an important point, to be certain, and we should be exploring opportunities to avoid waste and reduce costs. This approach also may partially address the fundamental question that is now haunting many oncologists, their patients, politicians and regulators: How do we deal with these costs today, given the coming tsunami as newer drugs come to market to treat some of the more common tumors, such as lung cancer, substantially increase demand?

Adjusting the vial size alone is not by itself likely to address the 800-pound gorilla in the room: Are high prices — now approaching $150,000 a year for the new immunotherapy drugs — justified in the first place?

We cannot forget that these drugs can bring enormous value to our patients by decreasing tumor burden, improving quality of life and increasing survival.

I listened to a highly regarded melanoma specialist who recently commented that because of the success of these drugs, he actually has to arrange to send patients with metastatic melanoma to survivorship clinics to make room for more patients. That may be anecdotal, but it illustrates the remarkable impact of some of these new treatments, going way beyond what we had seen for decades with this devastating cancer. Perhaps over time we will see a significant decrease in costs for associated medical care as these responders move to a chronic phase of illness and require fewer specialized services as a result of these new therapies.

Still we are left to ponder: Are pharmaceutical companies behaving responsibly? Or, are some succumbing to a "whatever the traffic will bear" mentality, as prices are increased substantially for some of the older effective targeted therapies, which should now be lower in price?

Frequently lost in the discussion are several relevant considerations.

Molecular diagnostics focus our treatment on small percentages of patients with relevant cancers. Targeted therapies still don't have a prolonged therapeutic benefit for many patients. So the “market” for drug companies remains disappointingly small. But the cost of getting drugs across the "valley of death" from the lab to the bedside is higher than ever. And remember: The vast majority of trials do not end with a marketable drug.

Society must accept drug prices that cover those costs and provide an incentive to innovate and take risk. That must be balanced with the desire to maximize profits to whatever extent possible, regardless of the impact it has on patients’ abilities to afford these drugs. It is no simple matter to achieve that balance. Getting the vial size "right" is a visible action and a modest step toward a larger goal.

If we don't get the overall pricing and incentives for new cancer drugs right, there is a risk that innovation will suffer since risk will not be rewarded. Less innovation means our current and future patients in the future will not have the best opportunity possible to achieve the benefits of what is truly game-changing oncology science and new drug development.

That would be an outcome that none of us should relish.


J. Leonard Lichtenfeld, MD, MACP
American Cancer Society

Disclosure: Lichtenfeld reports no relevant financial disclosures.