Economic and clinical value: the future of cancer care

Pharmaceutical CommercePharmaceutical Commerce - November/December 2014

An 'expectations convergence' is building in how drug efficacy aligns with patient outcomes

During the American Society of Clinical Oncology (ASCO) meeting earlier this year, a leading pharmaceutical company announced positive results for one of its drugs. For the first time in 10 years, a drug used to battle a recurrent cancer had been found to prolong life, in this case by more than a month. However, by the conference’s conclusion, news media reports focused on its cost.

Many evidence-based treatment options with similar outcomes have vastly different financial implications. Two years ago, Memorial Sloan Kettering refused to include a new, more expensive cancer drug on its formulary, saying it was no more effective than a less expensive drug currently in use. “When choosing treatments for a patient, we have to consider the financial strains,” wrote three of the hospital’s physicians in a New York Times op-ed.

In another example, the six-month cost for first-line treatment of metastatic colorectal cancer (CRC) and gastric cancer varies widely despite the clinical effectiveness being similar. (Journal of the National Comprehensive Cancer Network 2012;10:1037-1042).

Defining value

Meanwhile, ASCO has launched a major initiative to define value in cancer care, in view of the rising cost of cancer drugs. A task force of leading oncologists has been working on an algorithm for evaluating drugs based on outcomes and cost. Clearly, ASCO is going beyond the National Comprehensive Cancer Network (NCCN), which does not account for cost in its care paths.

Recently, in new guidelines for metastatic prostate cancer, ASCO said clinicians needed to be conscious of cost and, significantly, tied cost to a broader consideration of quality of life. A leader of the guidelines committee explained: “Including quality of life data in the guideline helps people understand how the different treatments will make them feel.”

Quality of life. Costs. Survival. That’s not all. What we’re seeing is the beginning of a major transition in cancer care, where much more will be expected of cancer therapies and thus factored into care paths.

Measurement of patient-reported outcomes, including health-related quality of life, is an increasingly important input into cancer care paths. Historically, clinical care has focused on survival, often failing to take into consideration quality of life and appropriate palliative care.

Both cost and quality of life are, in fact, clinical considerations. If a patient can’t afford or tolerate his or her medications, adherence will be put at risk.

Supportive care that contributes to quality of life and outcomes must be considered. A patient that is nutritionally undernourished won’t respond optimally to treatment, or may feel so poorly they fail to adhere to recommended care.

On the payment reform front, changes occurring more broadly throughout healthcare are also coming to cancer care. Along with standardization of care paths, especially for initial treatment following diagnosis, there has been increasing interest in bundled payment arrangements, i.e., charging a fixed price agreed on in advance.

Additionally, many organizations are considering the value of their care model as part of reimbursement; there is increasing expectation for being paid a premium for delivering higher value care.

Along with higher value care (better outcomes at a lower cost), cancer care is entering the age of transparency. Cancer centers are increasingly under pressure to report on adherence to evidence-based care, outcomes, cost and quality as payers and consumers are more engaged in shopping for their healthcare.

For pharmaceutical companies, successfully negotiating this “expectations convergence” in cancer care will require increased investment in data collection and focus on value; this begins with buttressing the economic and clinical value case for products. For quality of life outcomes, companies will need to invest in gathering real-world evidence.

Consolidation in healthcare, including mergers of hospital systems and acquisition of physician practices by these systems, is also transforming the cancer care path landscape for pharmaceutical companies. While decision-making will be more concentrated, it will also involve more perspectives, including administrators.

Clearly, cancer care no longer is immune from the revolution now occurring throughout healthcare.


Rita E. Numerof, PhD, is co-founder and president of Numerof & Associates, Inc. (St. Louis, MO;, a strategic consulting firm that specializes in healthcare and life sciences, and other industries in transition. She has degrees from Syracuse University and Bryn Mawr College, and is an adjunct faculty member of the Olin School of Business at Washington University in St. Louis.

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