November 07, 2014
5 min read

Drug costs, poverty, inequity and loss

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The magnitude of the current human catastrophe in Africa is almost beyond description.

A couple of years ago, my team at Levine Cancer Institute hosted a small delegation from Liberia — one of the poorest nations in the world — to train them in cancer screening and treatment practices, and to help them design a cost-effective and practical approach to chemotherapy for cancer in their nation.

Each member of their team was superb — well trained, pragmatic and dedicated to their patients — and we felt very positive about making a small impact on the health of their nation.

Derek Raghavan, MD, PhD

The extraordinary lack of resources for health care in Liberia 2 years ago was astonishing, and it was so sad to listen to the practicalities of practicing medicine there. The exercise of trying to design truly cost-effective approaches for the care of advanced disease — given the great problems of working through screening and prevention strategies without resources — was challenging and turned out to be self-revelatory.

In a nation that cannot routinely afford simple biopsies and histological assessment for tumor masses, the luxury of “routine” chemotherapy seems to have no place. Thus, as our tumor-specific teams developed treatment plans that were beyond their nation’s scale and scope, we developed a greater discipline for thinking creatively about this problem.

I recently received an email from their team leader, who has been back in Liberia since early 2012, working as an internist with an interest in oncology. He described unbelievable chaos wrought by ebola. The international TV and newspaper coverage hasn’t fully captured how dreadful it really is. It is tough to realize that thousands are afflicted and dying, with 25% of those affected being health workers. At the time of writing, three of this internists’ colleagues in a small, rural hospital had died of ebola, and all of the local schools had been closed to try to contain the disease.

Fortunately teams around the world are starting to focus their efforts on the treatment of ebola, improved prevention of transmission, and the provision of more resources to a region that has experienced so much misery. Hopefully we will do a better job of integrating these efforts than in the disappointing past non-collaborative efforts of the privileged Western world.

Cost controls needed

This issue has also led me to think again, more broadly, about expenditures in our own nation. My recent editorials have addressed some of my perceptions about areas in which we could do a better job of identifying parameters of real progress, setting a higher bar to define success, and also avoiding the exigencies of inconsistent pharmaceutical supply.

If one thinks of the situation with respect to oncology practice in Liberia, notwithstanding much more immediate health issues, it does lead to considering the analogies with the situation in the United States. As far as I understand, nobody questions the fact that the costs of treating advanced cancer cannot be supported in the current fashion. The United States has been involved in a series of wars for years, and the battle against cancer has been just one of them, perhaps with more perceivable victories than in some others. That said, the costs associated with these victories eventually could bankrupt the nation, and it is timely to think about creative solutions.

Our sophisticated audience doesn’t need a primer on the obvious: There clearly are problems in the medical–industrial complex, with excessive profit-taking in some domains, lack of willingness of government to create effective strategies, lobbying, pork-barreling and the usual litany of blood sports. Recently, some of our colleagues in the ethical pharmaceutical world have come up with restricting their distribution points for those medications without competitors as a means of maintaining inflated price structures. It seems that our cost-conscious regulators have somehow managed to miss that travesty! That said, what can we do as a nation that might actually have a beneficial impact on cost?


Our colleagues in the United Kingdom continue to explore and implement NICE, their national approach to structuring a value proposition for health care. This has many levels, but at the simplest, it reflects an attempt to use an evidence-based approach to regulating supply and demand for expensive medications. The benefits are obvious, and the drawbacks generally reflect government bureaucracy and inefficiency, questionable interpretations of data, and the potential for bias in those interpretations. Thus, desperate patients would argue that they are deprived of potentially life-saving agents, whereas regulators would counter that the odds of “benefit” simply don’t offset the risks of profligate expenditure of limited health dollars. At the end of the argument, there are clear advantages in exploring this approach further, and refining it to the point where errors in refusal become less and less commonplace.

Potential compromises

In the United States, with all the lobby groups and political pressures — and the expectations of the populace at large — the NICE approach may be a political pill too large to swallow and digest. However, the voting public is increasingly aware that their tax dollars, retirement plans and the overall economy are increasingly being affected by health costs, and they probably are ready to consider some compromises.

For example, the concept of a differential approach to pricing might be interesting. Consider the following idea: If we accept that the game-changer in the care of germ cell cancer is cisplatin, then it might be reasonable for a pharmaceutical company to charge “X” plus (say) 20% for “cisplatin for germ cell cancer,” and this would be because the drug reliably cures patients with that disease. In that system, it would be illegal to dispense that particular product for any other indication.

At the same time, cisplatin could be used for (say) lung cancer, where it clearly does have a palliative impact, but probably no greater than a dozen other cytotoxic agents. For lung cancer, a pharmaceutical company would charge “X” minus (say) 20%. In this model, it would be illegal to prescribe the cheap version for germ cell cancer. Thus, that algorithm would get us closer to a value-based strategy.

Another approach might be to focus on a set price for a particular agent, but then to require the pharmaceutical company to reimburse the payer a set percentage if the agent were not effective in achieving a useful result. In fairness, that would need to be restricted to first-line therapies in order to keep the playing field level, but it still would save our nation a huge amount of money. An ancillary benefit might be that it also would discourage some parts of the pharmaceutical community from advertising excessive claims of effectiveness.

Whatever approach we end up taking, it will require responsible input from government, support from a thoughtful public with realistic expectations, and a funding rationale predicated on level 1 or strong level 2 evidence. This will require all of us to reappraise the relationship between value, price and cost.

In addition, government will need to reconsider its stance on regulatory oversight in one key domain. At present, the bar is very high for the release of novel agents intended to try to prolong life in patients at the end of their cancer battle.

Wouldn’t it make more sense to lower the bar, require less-extensive testing of late effects and minor toxicities, and thus bring down the developmental costs, in exchange for a reduction in price by the pharmaceutical industry? In that setting, the bar could be raised again for successful drugs that would be extended to a broader patient population with longer life expectancy.

Whatever we do, the need is urgent, and it is time for common sense to prevail.

For more information:

Derek Raghavan, MD, PhD, FACP, FRACP, FASCO, is HemOnc Today’s Chief Medical Editor, Oncology. He can be reached at

Disclosure: Raghavan reports no relevant financial disclosures.