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  • In 2003, Medicaid spent $33.7 billion on drugs (19% of national spending for drugs and more than 10% of the Medicaid budget) Medicaid expenditures ($ billions)
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In 2003, Medicaid spent $33.7 billion on drugs (19% of national spending for drugs and more than 10% of the Medicaid budget) Medicaid expenditures ($ billions) for outpatient prescription drugs US$ Spend doubled in 4 years 1998-2002 And cancer drugs are a key driver to rising costs

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  • In 2003, Medicaid spent $33.7 billion on drugs (19% of national spending for drugs and more than 10% of the Medicaid budget)Medicaid expenditures ($ billions) for outpatient prescription drugsUS$Spend doubled in 4 years 1998-2002And cancer drugs are a key driver to rising costs

  • Confirmation in Europe: Cancer drugs budgets are doubling each 4 years Costs of anticancer drugs, France:2004 = 474 Million Euros2008 = 975 Million Euros

    Perrin S. Therapeutic decision making in oncology. Hospital Pharmacy Europe. 2010 (Sept/Oct);52:36-37Spend doubled in 4 years 2004-2008

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    474

    975

    Millions of Euros

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    Millions of Euros

    2004474

    2008975

    To resize chart data range, drag lower right corner of range.

  • The world spends more each year for cancer treatmentData: IMSGlobal spend on oncology drugs: projected for 2010-12Spend doubled in 4 years 2004-2008It is a worldwide problem

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    YearBillions of US Dollars

    200424

    200529

    200635

    200742

    200848

    200952

    201055

    201160

    201265

  • Cancer drugs are associated with cancer cures! - Timeline of novel cancer drug approvalCarin A Uyl-de Groot et al. The Economics of Improved Cancer Survival Rates: Better Outcomes, Higher Costs. Expert Rev Pharmacoeconomics Outcomes Res. 2010;10(3):283-292

  • Association of novel drugs and cancer mortalityCarin A Uyl-de Groot et al. The Economics of Improved Cancer Survival Rates: Better Outcomes, Higher Costs. Expert Rev Pharmacoeconomics Outcomes Res. 2010;10(3):283-292

  • Cost of cancer drugs by year of approvalLimits on Medicare's Ability to Control Rising Spending on Cancer Drugs

    Bach P. N Engl J Med 2009; 360:626-633Cancer drug costs rise 5x faster than other classes of medicineBach P. NEJM. 2009 Feb 7

  • Cost of treatment for metastatic colon cancer(Schrag D. NEJM. 2004;351:317-319)Cost of standard therapy has risen from $63 / 8 weeks to 30,675 / 8 weeks:500-fold rise in a decade

  • Planning for the future: what will happen to costs?USA Office of management and Budget. www.whitehouse.gov/ombmedical treatment drives cost inflation far more than the aging populationWhat is the driver for increased spending: ageing populations or medical treatment?

  • When will the health expenditure inflation bankrupt the US economy?

    2% point gap: health care affordable only until 2020; over 75 years, 118.5% of real increase in per capita income devoted to health care (e.g., implausible)

    1% point gap: health care is affordable until 2083; 54% of real increase in per capita income goes to health care

    Michael E. Chernew, Richard A. Hirth, and David M. Cutler Increased Spending On Health Care: Long-Term Implications for The Nation. Health Affairs,September/October 2009, vol. 28, Number 5, pp. 1253- 1255.

    A small effort to control the growth of expenditures NOW can sustain health service development to 2083!Failure to control expenditure now risks collapse within a decade

  • What are policy-makers trying to do?

  • What are policy-makers trying to do?Protect and improve the health of the populationAssure access to medical careAchieve efficient use of health care resourcesThey are doing what doctors want to do!

  • The key to the need to understand economics - Money doesnt always buy lifeLife expectancy at birth and health spendWHO. The World Health Report 20003 fold variation

  • The key to the need to understand economics - Money doesnt always buy health Relationship between spend and health is not always clear Disability-adjusted life expectancy relative to health expenditure per capita in USD in 191 WHO Member States, 1999WHO. The World Health Report 2000, p43US Dollars>10 fold variation

  • Cost constraints in cancer treatment:What can nations do?

  • We must accept that ration will occurRationing occurs either.by societys willingness to payby personal ability to pay

    USA - one in five families used up all of their savings paying for cancer treatment

    Cavallo J. The ASCO Post, February 15, 2011, Volume 2, Issue 3

  • European countries - with formal cost-effectiveness approvalAdapted and modified from Zentner et al, 2005societys willingness to pay is crucial to understand when setting priorities for a universal tax-funded or insurance based health serviceThe UK is not alone in wanting to control costs through formal state mechanisms

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