Leonard B. Saltz, MD

Chief, Gastrointestinal Oncology

Department of Medicine,

Chair, Pharmacy and Therapeutics Committee

Memorial Sloan Kettering Cancer Center

New York, NY

PROGRESS IN COLORECTAL CANCER CARE:

The Hope, the Hype, and the Gap Between Reality and Perception

Disclosures

I have consulted for and/or received research support from:

• Roche/Genentech• Bristol Myers Squibb• Imclone• Bayer• Merck• Boston Biomedical• Abbott

• Biothera• Novartis• Sanofi

• Immunomedex

• Lorus

• Synta

Overall Thesis

We have made progress in the treatment of colorectal cancer

We’ve made far less progress than we like to believe.

The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty.

- Winston Churchill

Overview (Why are we having this talk?)

The more you understand about where we are in CRC treatment and research, the more you can do to help

Congress is in a position to help in a number of ways; funding research is just one of them

What Congress Could Do Better

Fund more research

Fund smarter research

Change laws that uncouple cost from value

Make the results of research more affordable and more universally available

Are we doing the best trials?

Current NCI Cooperative Group CRC trials:

Post Surgical Treatment of Colon Cancer Question:

• Is 3 months of chemo non-inferior to 6 months?

• 11,000 patients world wide

Pre Surgical Treatment of Rectal Cancer Question:

• Is chemo alone non-inferior to chemo + radiation?

• 1000 patients

COST of

CARE

COST of

CARE

The Elephant in the Room

Cancer Drug Prices:No longer just a small piece of a bigger problem

Medicare Part B drug spending (mostly cancer drugs)

– 1997: $3,000,000,000

– 2004: $11,000,000,000

Medicare spending over this period increased by 47%,

while Medicare Part B drug spending increased by 267%

-Bach P. NEJM 2009: 360;6

Robert Langreth Nov 25, 2014 1:05 PM Bloomberg News

Value = Benefit / Cost

Other Examples of Prices Unsupported by Value

Savings and Loan bubble

Dot com bubble

Subprime Mortgage/real estate bubble

Oxaliplatin-Based Chemo + AvastinOverall SurvivalSaltz et al: J Clin Oncol 2008

HR=0.89 (97.5% CI 0.76–1.03)

p=0.08

CapeOx / FOLFOX-4 + Avastin n=699 (420 events)

CapeOx/ FOLFOX-4 + placebo n=701 (455 events)

1.0

0.8

0.6

0.4

0.2

0

Months

Su

rviv

al e

stim

ate

0 6 12 18 24 30 36

19.9 21.3

NO16966

CapeOx /FOLFOX + Avastin Response Rate Saltz et al, J Clin Oncol 2008

Chemo+ Chemo Chemo+ Chemo placebo + Avastinplacebo + Avastin

Investigator-Investigator-

reportedreported49%49% 47%47%

p = 0.90p = 0.90

Independent Independent response response

committeecommittee

38%38% 38%38%

p = 0.99p = 0.99

Annual Revenue of Top-Selling Anti-Cancer Drugs

Some reasons our cancer drugs can lack value

“Health care above consideration of cost”

Someone else is paying

We’re scared

We don’t know what we’re buying (or selling?)

What we have here is a failure to communicate.

Misunderstanding of the terms:– “Significant”– “Highly” significant– “Progression-Free Survival”– “Survival”– “Decreased risk of death”– “New treatment option”– “Targeted therapy”– “Well-tolerated”

CRYSTAL Trial:Subgroup analysis of PFS time by on-study skin reactions: cetuximab + FOLFIRI

Van Cutsem et al: NEJM 2009

Skin reaction grade 0 or 1, n=244

*There were no grade 4 skin reactions

0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0

Progression-free survival time (months)

1.00

0.75

0.50

0.25

0.00PF

S es

tim

ate

Skin reaction grade 2, n=243

Skin reaction grade 3*, n=112

11.3 mo5.4 mo 9.4 mo

The Aflibercept Story

Aflibercept (Zaltrap)

• Fusion protein of key domains from human VEGF receptors 1 and 2 with human IgG Fc¹

• Blocks all human VEGF-A isoforms, VEGF-B, and placental growth factor (PlGF)²

• High affinity – binds VEGF-A and PlGF more tightly than native receptors

1. Holash J et al. Proc Natl Acad Sci USA. 2002;99:11393-11398.2. Tew WP et al. Clin Cancer Res. 2010;16:358-366.

VELOUR Study: Overall Survival

Van Cutsem E et al. ESMO/WCGC 2011, Barcelona, Abstract O-0024.

TML Trial: Overall Survival

OS

est

imat

e

Time (months)

1.0

0.8

0.6

0.4

0.2

00 6 12 18 24 30 36 42 48

No. at riskCT 410 293 162 51 24 7 3 2

0BEV + CT 409 328 188 64 29 13 4 1

0

Chemo (n=410)Chemo + Bev (n=409)

9.8 mo 11.2 mo

Unstratifieda HR: 0.81 (95% CI: 0.69–0.94)

p=0.0062 (log-rank test)

Stratifiedb HR: 0.83 (95% CI: 0.71–0.97)

p=0.0211 (log-rank test)

Median follow-up: Chemo, 9.6 months (range 0–45.5); BEV + CT, 11.1 months (range 0.3–44.0)

What do and don’t the TML and VELOUR trials say:

They don’t say that either drug “rescues” the other

Therefore medically defensible to do either, but not medically defensible to do both.

Thus, they provide no new line of therapy

More Terms to Define:

Targeted Therapy

New Treatment Option

Second line Avastin vs. Second line ZaltrapCost difference

Drug Dosage Schedule

12 week dose, mg

Payment Method Source 12 week price

Zaltrap4mg/kg q 2 weeks 1680 $1824/100mg 95% of AWP $30,643.20

Avastin5mg/kg q 2 weeks 2100 $66.062/10mg 106% of ASP Q2 2012 ASP $13,873.02

Impact of MSKCC Actions on Price of Zaltrap®

Impact on Cost of Care: back of the envelope

Bevacizumab

– $2864 per 400 mg vial*

– Average weekly dose = 175 mg

* Red Book 2012

Cost of Bev beyond progression(Cost of only the bev; no MD, nursing, or pharmacy fees, no other meds)

$2864 per 400 mg vial -> $7.16 per mg

– 175 mg/week x 4.33 weeks/month = 758 mg/month – If vials are shared:

758 mg/month x $7.16/mg = $5427.28 per month,

x 5.7 months = $30,935.50 per patient treated

for 1.4 months OS benefit ->

$30,935.50 x 8.57 = $265,117 per year of life saved

– If vials not shared, then $2864 every 2 weeks for 24.7 weeks (5.7 months) -> $35,370.40 per patient treated

$35,935.40 x 8.57 = $303,124 per year of life saved

– (note: these are not Quality-adjusted)

Thought Experiment: The Dollar Value of a Human Life (above baseline)

Assumptions:

– Let “value” = what society is willing to pay– Society is currently willing to pay $303,000 per year– Assume average U.S. Life expectancy of 78.7 years

Dollar value of a U.S. human life would equal:

303,000 dollars/year x 78.7 years = $23,846,100

Unsustainable

Unsustainable

Unsustainable (adj) : not able to be maintained or supported in the future, esp. without causing damage or depletion of a resource.

- Dictionary.com’s 21st Century Lexicon

Why it is unsustainable

At current rates, by late 2015, out of pocket health care costs plus health care premium for family insurance plan will require approximately half of average US household income.

By 2028, 100% of household income would be needed to cover insurance premium plus out of pocket costs.

– Lee Newcomer, Sr VP Oncology and Genetics, United Healthcare

(quoted from ASCO Post, vol 4 Dec 1, 2013)

Why it is unsustainable

“I don’t envision a future in which there will be more money in the health care system.”

– Lee Newcomer, Sr VP Oncology and Genetics, United Healthcare

(quoted from ASCO Post, vol 4 Dec 1, 2013)

Care is Shifting: Price impact on point of service

Moran report: US Oncology Network, Community Oncology Alliance and ION Solutions

Site of care: Why, and What now?

Collapsing margins on doctor’s office side – (ASP+6% to ASP + 4.2% to ASP +3%)

Projected consequences:– Fewer office practices able to give chemo– Margin squeeze further incentivizes higher cost

agents– Hospital-based care more expensive, so

– Added (non-drug) treatment costs for private insurance

Consolidation

Sustaining the unsustainable; the role of the US government FDA, the gatekeeper

– Approval; “efficacy” defined by the p value– Forbidden from considering price

CMS, the major purchaser

• Obligated to buy what FDA approves• Forbidden from negotiating price• Struggling to restrict use

Congress, the overseer

– Created COI in MDs selling chemo at mark up– Heavily influenced by lobbies

What could Congress do differently?

Empower FDA to set minimum efficacy standards

– Require “clinically significant” rather than “statistically significant” results

– Define “clinically significant” before the trial starts

Empower FDA to consider proposed price versus benefit and toxicity in approval process.

What could Congress do differently?

Empower CMS to negotiate prices

Permit Americans to purchase drugs from abroad

Remove financial incentives for doctors to use the most expensive drugs

What else might we do differently? (Speculative)

Limit direct-to-consumer advertising of prescription drugs

– No CMS reimbursement for drugs marketed directly to consumers?

Pay for Performance (for drugs?)

– Different plans cover different levels of efficacy? Safety?

N.I.C.E.

London Times February 19, 2015

You can always count on Americans to do the right thing - after they've tried everything else.

-Winston Churchill

Two parallel discussions and how they intersect

1. We, as a nation, spend too much on health care, and should spend less

2. We, as individuals, expect (demand?) that we have no out of pocket health care expenses

These concepts are antithetical.In the absence of individual moral hazard, there is no individual incentive to limit health care costs

What’s Happening Outside the U.S. ?Brand (Nexavar®) vs. Generic Sorafenib

Price Bayer charges: 280,000 rupees ($5600) per monthPrice of Natco Drug: 8,800 rupees ( $176) per month

Cost of Care: Anti EGFR vs Anti VEGFDrug UK £ UK £ UK £ % of US

cost

Per Mg Monthly 10.6 month course

(£ 1.0= $1.6)

Erbitux(250 mg/m2/wk)

£ 1.78 £ 3,858 £ 40,895 53%

Vectibix (6 mg/kg q.o.w.)

£ 3.79 £ 3,944 £ 41,806 55%

Avastin (5 mg/kg q.o.w.)

£ 2.31 £ 2,002 £ 21,221 55%

Cost based on a patient who is 80 kg, 180 cm, BMI 24.7, BSA=2.0 m2

UK prices are retrieved from the British National Formulary and correspond to the amounts paid by the NHS to the dispensing pharmacy, as per the NHS Prescription Services, before any discounts or additional fees are applied.

US prices are retrieved from the fourth quarter 2014 CMS ASP file and are represented as 106% of the ASP (i.e. the amount reimbursed by Medicare).

The Message to Pharma:Evolve or Die: What has to change

Establish true value in a treatment

Avoid incrementalism, because sooner, rather than later, the market will not support it

In order to avoid incrementalism, one has to be willing to let go of ideas that are not panning out

Drug Development Costs: Where is the Money spent?

What Can We Researchers Do Differently?

Define “clinical significance” up front– Set goals for each trial in terms of:

• Months improvement in survival or PFS• Absolute percentage improvement in 5yr DFS

– Use statistics to confirm positive results, not define them.

Project financial consequences of success up front with estimates of current costs.

Consider impact of anticipated incremental toxicity vis-à-vis benefit.

What Can We Researchers Do Differently?

Set maximum limits on size of trials

– If we need more than 1000 patients to show a difference, it is unlikely to be a clinically significant difference.

– Proposal: no phase III arm greater than 250 pts in metastatic setting; 500 pts in adjuvant

Coping with reality:High-cost cancer drugs policy at MSKCC

Since 2005, high dollar chemo has required pre-approval

Drugs are permitted to be dispensed if:

– It is for an FDA-approved indication– It is for an indication listed in the NCCN

compendium with a 1 or 2A indication

Also permitted if:

– 3rd party payer confirms willingness to pay

– Individual is willing and able to pay privately

Conclusions

Prices of cancer drugs are not related to value

Current prices are unsustainable.

High drug prices limit availability of care, and further increase economic health care disparities

High compensation for incremental benefit encourages just that….incremental benefit

Thus far, cancer drug prices have been largely protected from rational cost/benefit considerations, and from market forces. This is starting to change.

Unless someone like you cares a whole awful lot, nothing is going to get better. It's not.

-Dr. Seuss