The Freakonomics of Chemotherapy

In Super Freakonomics, Levitt and Dubner paint a bleak view of the value of chemotherapy. Is their view cynical and fatalistic? Or is it clear and realistic?

The authors acknowledge the effectiveness of chemotherapy in treating leukemia, lymphoma, Hodgkin's disease and testicular cancers, but they label it "remarkably ineffective" overall, citing the following statistics:

- Although the 5-year survival rate for all cancer patients has been shown to be 63 percent, barely 2 percent of survival is attributable to chemotherapy. For multiple myeloma, soft-tissue sarcoma, melanoma of the skin and cancers of the pancreas, uterus, prostate, bladder and kidney, chemotherapy had zero discernible effect.

- A typical chemotherapy regime for non-small-cell lung cancer, which kills more than 150,000 Americans each year, costs $40,000, but only extends life by an average of 2 months.

- Cancer patients make up 20 percent of Medicare patients, but consume 40 percent of the Medicare drug budget.

- More than $40 billion is spent each year worldwide on cancer drugs.

If chemotherapy is so ineffective, why is it so widely prescribed? According to the authors, major reasons include:

- a natural response to financial incentives (Oncologists typically derive more than half their income from selling and administering chemotherapy drugs.)

- an attempt to inflate survival rates (A few extra months of life, expressed as a percentage, can look quite impressive.)

- an over-belief in the efficacy of chemotherapy

- a promise of hope for recovery or extending life

The observations made in Super Freakonomics cast light on some of the struggles inherent in reforming America's health system. Even if chemotherapy can be proven to be ineffective, its use is unlikely to be curtailed greatly.

The government will find it difficult to impose limits on constituents that put a "death squad" label on panels that evaluate efficacy and allocate resources.

Manufacturers of chemotherapeutic agents will not simply abandon incentives that promote chemotherapy. Their lobbyists will lean hard on legislators.

Oncologists want to save lives. Patients are willing to endure chemotherapy's toxic rage to overcome cancer. Families cling to it in desperation. And we all know cancer survivors who attribute their priceless second lease on life to their treatment regimen. Chemotherapy is hope.

With the advent of companion diagnostics, chemotherapy may one day be as effective as we hope and believe it should be. Oncologists would be able to match individual patients with the chemotherapy drug(s), dose and timing that works best for their specific biological makeup. They would also avoid chemotherapy when it would have little or no effect.

In the meantime, as I look at chemotherapy—and healthcare in general—in economic terms, it reminds me of a saying that is attributed to John Wanamaker. (Revisions are mine.)

"Half the money I spend on [healthcare] is wasted; the trouble is I don't know which half."

— Tom DeSanto

Source: Super Freakonomics, Steven D. Levitt and Stephen J. Dubner, HarperCollins 2009, pp. 84-86. Image: www.canceractive.com

Are Job Losses Truly Sickening?

As of the end of October, America's unemployment rate reached 10.2 percent. More than 15.7 million people are out of work. It's the highest rate in 26 years.

Without a doubt, America's economic ills affect the health of its citizens. Loss of employment often limits access to health insurance, leading people to postpone or avoid treatment, stop taking medications and forgo preventive care. But studies have shown that the experience of job loss itself can have harmful health effects.

Workers who lost their job through no fault of their own, were twice as likely to report the onset of a new illness such as high blood pressure, diabetes or heart disease within 18 months, compared to those who remained employed. (Strully study, Harvard School of Public Health review of U.S. Panel of Income Dynamics data in 1999, 2001 and 2003)

When men became unemployed, symptoms of somatization, depression and anxiety increased. The men made significantly more visits to their physicians, took more medications and spent more days sick in bed than employed individuals, even though the number of diagnosis in the unemployed and employed groups were similar. (Linn, Sandifer and Stein study, American Journal of Public Health, May 1985)

Researchers in the 1970s estimated that every 1 percent increase in the unemployment rate in the U.S. leads to an additional 6,000 additional deaths each year. (Jin RL, The impact of unemployment on health: a review of the evidence. Canadian Medical Association Journal, Sept. 1, 1995)

All of us are sick of seeing the reports of rising unemployment. And rising unemployment is making our nation sicker.

Now, more than ever, we need to provide all our citizens with access to healthcare. It's a daunting task in times of economic duress. But we must not settle for anything less.

— Tom DeSanto

Image: Market Watch

The Reluctant Symbiosis of Companion Diagnostics

In nature, the rhinoceros and oxpecker have a perfectly symbiotic relationship. The rhino provides ticks for the bird to eat and the bird chatters loudly at the approach of danger. In Swahili, the oxpecker is known as "askari wa kifaru," the rhinoceros guard.

In healthcare, a symbiotic relationship between diagnostic and pharmaceutical companies makes perfect sense. Pharmacogenetic tests can guide the development and application of new drug therapies. But the relationship doesn't come naturally.

The pursuit of personalized medicine should be driving new relationships, but a recent report by PricewaterhouseCoopers (PWC) found that partnerships around companion diagnostics are slow to develop. Between 2004 and 2008, only 45 such partnerships were formed, with 21 of them relating to cancer.

Big Pharma is the greatest collaborator to date, mostly focusing on cancer. Funding remains strong for cancer research and resulting drug therapies are high-ticket items. Companion diagnostics can help prove effectiveness and guide treatment, especially given the role of genetics in cancer progression.

Why aren't more relationships progressing?

Diagnostics companies are hesitant to devote the resources required to develop companion diagnostics. Often their focus remains on clinical laboratories, their customary target and proven source of revenue. If they do pursue companion diagnostics, the preference is to go it alone and retain the value of the diagnostic within their own company.

According to Ted Snelgrove, who guided the development of the highly successful Oncotype Dx® breast cancer assay, development is difficult and expensive. Success for a test that costs more than $3,000 requires a strong value proposition and persistence. It is especially challenging when pharma partners prefer to keep more than 90 percent of revenue generated from companion diagnostics, leaving a small remainder for innovative diagnostic companies.

Will diagnostics and pharma become more like the rhino and oxpecker? I believe so. But the dynamics governing the relationship promise to be complex. Considering the trend toward FDA oversight, healthcare reform and continuing advances in technology, it will be difficult to determine who provides the ticks and who protects from danger.

— Tom DeSanto

PWC study available online at www.pwc.com/us/en/healthcare/publications/diagnostics-2009-moving-towards-personalized-medicine.jhtml. Recent webcast by Ted Snelgrove available at www.dxma.org.

Additional source: Clinical Laboratory News, October 2009. Image: www.flikr.com

A Complex Case Worthy of Dr. House

Each week in a mythical New Jersey hospital, Dr. Gregory House collaborates with his team to solve an incredibly complex medical case.

Now a dozen real-life New Jersey hospitals are collaborating to solve an incredibly complex financial case.

For 10 years, New Jersey hospitals have suffered from an average profit margin of less than 1 percent. To improve financial health, New Jersey hospitals must reduce waste and cut cost while improving patient care.

A recently approved demonstration project will help determine if hospitals and physicians can collaborate more closely to improve safety and quality of care while reducing costs.

CMS approved a gainsharing plan proposed by the New Jersey Hospital Association in which hospitals are allowed to use current Medicare funds to provide incentives to participating physicians who excel at achieving exemplary outcomes while helping hospitals save money. (Physician participation is voluntary.)

The plan takes collaboration to new levels in many respects. Each hospital and its physicians will become more closely aligned in efforts to improve quality and efficiency. Governing the incentive program will require active steering committees with at least 50 percent physician participation. The dozen hospitals will work together through representatives on a global steering committee to share ideas, expertise and best practices.

In each episode of House, specialists and the hospital have less than 60 minutes to solve the case. This demonstration project brings together motivated physicians and administrators in twelve hospitals over three years to help find a way to restore the financial health of New Jersey's hospitals.

CMS is overseeing the project and will monitor success based on hospital readmissions and other data. Will collaboration bring success? The case is enormously complex and only time will tell. Stay tuned.

— Tom DeSanto

Based on "Gainsharing Pilot Tests if Hospitals, Physicians Can Reduce Costs," Mark Taylor, H&HN, October 2009. Image: fanpop.com

A Brief on Biologics, Biosimilars and Bioethics

The November/December issue of AARP, The Magazine features excellent articles on "The New Miracle Drugs."
It inspired me to write this brief overview.

Biologics are produced by living organisms and are engineered to specifically target proteins involved in causing disease. Many studies support their effectiveness in prolonging life and relieving symptoms for cancers, autoimmune diseases and other serious illnesses.
- More than 300 biologics currently on the market
- Comprise 25 percent of new drugs approved by FDA
- Comprise 13 percent of FDA black-box-warning labels
- $1.2 million to develop
- 10 years in research and development
- Possible annual cost of use: $100,000 Avastin, $60,000 Rituxan, $32,000 Enbrel

Biosimilars essentially are generic biologics.
- No approval process in place at FDA
- 10 to 30 percent savings predicted by FTC
- $9 billion in possible Medicare/Medicaid savings over 10 years

Bioethics experts caution against the inequity of the benefits of biologic therapy being available only to those who can afford it.

"It is indisputable that any patient should have access to these drugs [biologics], regardless of income or insurance status."
— Ruth Faden, PhD, director of the Johns Hopkins Berman Institute of Bioethics

Issues and Answers

Citing the extraordinary cost of developing biologics, the pharmaceutical industry has requested 12 to 14 years of exclusivity before biosimilars could be released. The FTC released a report recommending a shorter period to encourage development of new drugs and bring down prices. AARP lobbyists claim that 3 years should be sufficient to recoup costs. The battle is on.

Current prescription-drug pricing protocols and increases in the number of uninsured and underinsured patients can make biologics unaffordable. The current reform environment also promises to put pressure on development and approval of expensive therapies. Greater emphasis on patient safety may also have an affect.

Biologics are saving and improving lives where there was no hope. As technology improves for targeting biologics, new applications will arise and safety will improve. If an FDA approval process and agreement on clearing the way for biosimilars can be achieved, we can begin to address affordability issues and bioethical issues of equity and access.

— Tom DeSanto

Source: AARP, The Magazine, November/December 2009: "New Miracle Drugs," Mary A. Fischer,
"What Price A Miracle," Sheree Crute. Image: www.pharmaceutical-technology.com

Healthcare Innovation: Key to Reform

Bill Moffitt is renowned for his vision in developing the point-of-care blood analysis market. He identified a constellation of trends – far in advance – that led him on the path to innovation. His work helped move testing from centralized hospital labs to revolutionary hand-held devices that deliver immediate and accurate results.

In a recent webcast for the DxMA, Bill stressed that healthcare reform should focus on delivery models. He sees people as the primary cost-driver in healthcare and that improving their productivity is the key to success. The goal should be to develop technologies that enable clinicians and staff to provide equal or better care at an overall lower cost.

Bill's view, based on 35 years of experience in the diagnostics and device industry, comes to us with wisdom and experience. It is a long-term view that may not be popular with reformers looking for a quick fix by tweaking the system.

From early research through the acquisition by Abbott Laboratories, development of point-of-care blood analysis at i-STAT required a more than a decade. For the first five years, i-STAT supported "negative profit" for a product they knew would succeed. Today, that product is a major contributor to enhancing care and reducing costs.

Innovation requires vision, time, money and confidence, but it can generate improvements on a massive scale. Hopefully, the accomplishments of visionaries such as Bill Moffitt will serve as proof that any successful plan for reform must identify practical innovations and provide long-term support for their development and implementation.

— Tom DeSanto

Image: Abbott

Clarify Language to Cut Costs

The Plain Language in Health Insurance Act, now in committee, would require the Federal government and private insurers to write all new documents in plain, easy-to-understand language.

Imagine being able to quickly comprehend benefit plan descriptions, drug formularies, explanations of benefits, enrollment forms and other documents. (Any clear description of the Medicare benefit donut hole defies imagination.)

Similar plain-language legislation was proposed in 2007 to cover documents issued by all government agencies. The House passed it. But the Senate never took action.

The Federal Plain Language Guidelines encourages use of simple words, short sentences and paragraphs, and pronouns (such as "you") that speak directly to readers. It discourages legal, foreign and technical jargon, as well as double negatives. (Examples at www.plainlanguage.gov.)

Count me in for "language reform." Eliminating bombast and double-talk from health insurance would improve health care immensely. If only we could do the same with the health-care debate.

— Tom DeSanto

Image: telegraph.co.uk