In the wake of the UK National Institute for Health and Clinical Excellence's (NICE) decision to reject the new lug cancer drug Tarceva (erlotinib) on grounds of its limited use over existing therapies and higher cost of therapy, the cost effectiveness of ever increasing oncology treatments, particularly the modern oncology treatments, has come under scanner.

In 2004, national cancer treatment expenditure in the US stood at $72.1 billion, reflecting a growth rate of 6.4 per cent (CAGR, 1995-2004). This is a little less than 5 per cent of overall spending for medical treatment in US. Expenditure for the four most common cancers, i.e., lung, breast, colorectal and prostate, constituted 47 per cent of total expenditure in 2004.

The situation is no different in India. Indian patients are at the receiving end, where the cost of cancer therapy is soaring high. Cost comparison of a few drugs for different cancer types would provide a clear picture of today's cancer therapy trends in India. Increasing cost of therapy is of great concern in the country, where almost 80 per cent of healthcare cost is of out-of-pocket, which is borne by the households.

Cost of cancer therapy is dependent on many variables like mode of treatment, line of therapy, stage of disease etc. Hence, increasing cost is attributed to various factors.

The objective of cancer treatment is to kill the fast-multiplying cancer cells in the shortest possible time. Hence, oncologists are always on the lookout for the most effective and new drug that is available in the market, which can hit hard and attack multiple pathways of tumour development. Targeted therapies are the new class of anticancer drugs that act on multiple pathways to control tumour growth. Trastuzumab is one such targeted therapy being increasingly used in breast cancer, the cost of which is 6 times more as compared to the commonly used regimen ACT.

To further strengthen the hands of oncologists, the research for newer and novel cancer therapies is higher as compared to any other therapeutic area. About 650 drugs are in various phases of development for cancer by Pharmaceutical Research and Manufacturers of America (PhRMA) member companies alone. The new drugs, even with marginal improvement in the survival rate, can demand premium price and drive the cost of therapy further.

The flip side of research is the failure rate, also called as attrition rate. High attrition rate of cancer research is also partly attributed to increasing cost of cancer therapy. The average success rate of drugs for first-in-man to registration across the most therapeutic segments is about 11 per cent, while in cancer it is less than 5 per cent.

As the cost of therapy is a factor of cost of research, the impact is very significant in the case of cancer. The total annualized cost per approved drug is second highest for any cancer drug, about $1.04 billion and is just next to respiratory drugs.

Do oncologists drive the cost of therapy?
In a disease area like cancer, where multimodality option (surgery, radiation, chemo, hormones and biologics) is available, oncologists play a critical role in treatment decisions. Yet, it is unclear whether they prescribe high-cost new treatments to offer good value or not, apart from how therapeutic cost factors affect their treatment recommendations.

In a survey of 139 academic medical oncologists in the US, only 30 per cent agreed that the costs of new cancer drugs influence treatment recommendations, while 77.5 per cent emphasised that every patient should have access to effective cancer treatments regardless of their cost.

While we analyze the reasons for increasing cost of therapy, it is imperative to review whether the cost is justified or not. Cost effectiveness of cancer drugs can best be analyzed by improvement in survival rate. Let us take a look at a few examples of cost of new drugs vis-à-vis the survival rate in comparison to existing drugs, which are considered as reference drugs.

In the case of advanced metastatic breast cancer, the increase in survival rate is just 3 months with the new drug (Trastuzumab) over the reference drug (Paclitaxel). However, the cost is increased by 6 times per cycle. In the case of follicular lymphomas, though the response is nil and the cost is increased by 7 times over reference drug (Fludarabine), the new drug (Rituximab) is preferred because it offers targeted therapy.

Increase in cost of modern cancer drugs is not justified with the improvement in survival rate. Hence, the cost effectiveness of the drugs could not be established. However, they reduce side effects and improve the quality of life.

Research by Indian companies can offer respite from these expensive cancer drugs. Dabur Pharma launched a novel drug delivery system (NDDS) for the widely used breast cancer drug Paclitaxel, which is priced much lesser than a similar product called Abraxane that is available in the US. Dr. Reddy's Laboratories developed Rituximab and priced it at half the price of Roche's Mabthera for the treatment of non-Hodgkin's lymphoma.

(The authors are consultants with the Bangalore-based PharmARC Analytic Solutions)