Why are we discussing cost. cancer care in this session?

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2 Why are we discussing cost and cost-effectiveness ti of cancer care in this session? Canadian health care expenditures have increased 40% since 1984 and consuming a greater percentage of provincial budgets Health spending as a percentage of GDP has increased by 1% every 10 years

3 Why are we discussing cost and cost-effectiveness ti of cancer care in this session? Canadian health care expenditures have increased 40% since 1984 and consuming a greater percentage of provincial budgets Health spending as a percentage of GDP has increased by 1% every 10 years Because we are entering a period of economic contraction/recession/crisis

4 Total Health Expenditure From average growth rate was 3 8% Flattened From , average growth rate was 3.8%. Flattened growth in mid 1990s followed by strong growth since 1997

5 Total Health Expenditure, Selected Uses of Funds, Canada, Hospitals 28.6% Drugs 16.5% Physicians 13.1%

6 Cost of Cancer Therapy The economic burden of cancer is high in developed countries and rising at 7% per year $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $2,749 $3,483 $4,460 $4,816 $4,888 $5,370 $5,844 $6,838 Drug costs are increasing faster than other health care costs $1,000 $ Pricing trends 1998 to 2005 Cost per treated case

7 Average Drug Cost Per Cancer Case by Approval Date (NOC) in Canada $45,000 $40,000 $35,000 $35,000 $40,000 $30, $25,000 $20,000 $19,952 $20,000 $25,000 $25,000 $20,000 $15,000 $10,000 $5,000 $3,119 $2,753 $4,750 $873 $5,320 $3,000 $1,583 $8,343 $5,230 $6,338 $11,897 $0 Epiru bicin Fludarab bine Paclit taxel Vinorelb bine Doce taxel Raltitre exed Gemcitab bine Topote ecan Irinote ecan Liposo omal Doxoru bicin Trastuzum mab Rituxi mab Premetrex xed Bortezo omib Zev valin Be exxar Bevacizu umab Alemtuzu mab 12-Feb Jun Dec Mar Jul Sep Dec Apr Jul Aug Aug Mar May Jan May Aug-05 9-Sep Nov- 05 Reference: NDFP DS-Web March, 2005 (exception: premetrexed, bortezomib, 90Y- Ibritumomab tiuxetan, tositumomab and Iodine 1131 tositumomab bevacizumab, and alemtuzumab are estimated values)

8 Traditional Drug Approval Process in Canada Safety Manufacturing processes Efficacy (Clinical benefit)

9 New Drug Funding Program (NDFP): Hierarchy of Benefits & Evidence 1. Cure Benefits 2. Prolongation of survival 3. Relief/prevention of symptoms/complicatio p ns of disease 4. Improved QOL 5. Reduction in toxicity 6. Prolongation of disease-free survival 7. Tumor shrinkage Evidence 1. Multiple RCT or meta-analysis 2. Single RCTs of reasonable size 3. Small RCT 4. Data from phase II ti trials

10 Drug Approval Process Safety Efficacy Manufacturing processes Fourth hurdle : economic evaluation

11 Economic Evaluation Required for Reimbursement Decisions Most publicly l funded d systems require an economic evaluation for reimbursement decisions on drugs Australia: Pharmaceutical Benefits Advisory Committee (PBAC) Ontario, Canada: Ontario Drug Benefits England and Wales: National Institute t for Health and Clinical Excellence (NICE) Many European countries

12 Economic Evaluation in Europe Britain: NICE evaluates the cost effectiveness of medicines. Guidelines updated April Ireland: Guidelines for pharmacoeconomic studies prepared; costeffectiveness data may be requested. France: Not a formal requirement but increasingly used in reimbursement decisions. Guidelines prepared. Spain: Health technology assessment at a regional level. Portugal: Cost-effectiveness data incorporated into reimbursement decisions. Norway: Pharmacoeconomic data required for reimbursement; official guidelines in operation. Source: National Centre for Pharmacoeconomics, Ireland Italy: Cost-effectiveness considered in pricing and reimbursement decisions. Finland: Pharmacoeconomic evidence mandatory for evaluating new therapies for reimbursement and may also be requested for existing therapies. Sweden: Cost-effectiveness data required for reimbursement. Denmark: Cost-effectiveness data may be requested for reimbursement decisions. Netherlands: Pharmacoeconomic evidence explicitly required for reimbursement of new products. Belgium: Formal requirement for economic evaluation. Germany: Guidelines prepared. Institute for Quality and Efficiency in the Health Service established in Greece: Guidelines for pharmacoeconomic studies prepared; cost-effectiveness data may be requested.

13 Types of Economic Evaluation Cost-Minimisation Analysis (CMA) Benefits of alternative programs must be equivalent Cost-Effectiveness Analysis (CEA) Benefits not explicitly valued -natural units used e.g. Life Years Gained (LYG) or cases detected Difficult to compare across a wide range of programs Cost-Utility Analysis (CUA) Benefits valued typically y based on LYG weighted by an index of Quality of Life - Quality Adjusted Life Years (QALYs) Cost-Benefit Analysis (CBA) Benefits valued - based on monetary valuations of health improvements and expressed in dollars

14 Nature of Economic Evaluation Program A Impact on health status t Survival Quality of life Impact on health care costs Hospitalisations sat o s Drugs, procedures etc. Target patient group Impact on health status Survival Quality of life Program B Impact on health care costs Hospitalisations Drugs, procedures etc.

15 ICER The cost-effectiveness ratio (CE) is the incremental cost of an intervention divided by its incremental benefits, as given by the formula: Cost-Effectiveness = Cost 1 Cost 2 Effectiveness 1 Effectiveness 2 Effectiveness usually measured as survival gain in years

16 The problem with cancer drugs Increment in cost is commonly large and the benefit in terms of survival increase is modest at best Most advances are increases in the median survival of selected patients of a few months Benefits in the real world may well be less Result: many (most) cancer drugs are not cost-effective

17 Cetuximab in Combination with vinorelbine-cisplatin for Advanced NSCLC Flex trial; n = 1,125 Median age 59, stage IV 94%, adenoca 47%, squamous 34%, ECOG 0/1 83% EGFR detectable advanced NSCLC Cetuximab 400 mg/m 2 initial dose then 250 mg/m 2 per week + C 80 mg/m 2 + V 25 mg/m 2 d1, d8

18 Cetuximab in Combination with vinorelbine-cisplatin for Advanced NSCLC Median OS (mo) Arm A Median OS (mo) Arm B All (n = 1125) HR (95% CI) P-value ( ) Caucasians (N = 945) ( With AC (n = 412) ( ) With SCC (n = 347) ( Asians (n = 121) (

19 Bevacizumab in Combination with Paclitaxel and Carboplatin E 4599 Randomized trial; P 200 mg/m 2 + C AUC d1 q3wks + B 15mg/kg d1 q3wks n = 842; non-squamous NSCLC 14% stage IIIb; 86% Stage IV PC PCB Response rate 10% 27% p< PFS 4.5 mo 6.4 mo p<0.001 Median survival 10.2 mo 12.5 mo p= Thrombosis/embolism b 3% 38% 3.8% Hemorrhage 1.0% 4.1% Treatment deaths 2 9 Sandler AB et al ASCO Proc 23 (16S) 2005:4

20 Incremental Cost-effectiveness of Molecular Targeted Therapies Trastuzumab in adjuvant breast cancer $ 40, per QALY Erlotinib in lung $ 96,000 per QALY Bevacizamab (5mg/kg q2 wks) with IFL in stage IV CRC $ 133,540 per QALY Bevacizamab (with 5FU/LV in stage IV CRC $ 180,000 per QALY Cetuximab + irinotecan in CRC $ 127,000 per QALY Sorafinib in renal cell carcinoma $ 89,000 per QALY Sunitinib in second-line GIST $ 143,000 per QALY Bortezomib in refractory multiple l myeloma $ 275,500 per QALY

21 But What is Cost-effective? US Congress 1985 renal dialysis funding for Medicare/Medicaid patients US $50, per QALY 1998 Survey of health economists found $60,000/QALY acceptable Adjusted for inflation and CDN currency $114,487 per QALY Nadler et al. Survey of Boston area oncologists 78% stated patients should have access to effective care regardless of cost From specific scenarios, oncologists implied threshold for withholding care was $300,000 per QALY Oncologist 11: 90-95, 2006

22 Strategies to Deal with Rising i Drug Costs Reject high h cost (high h ICER) drugs Legislate cost reductions/mandatory substitution of generics Cap lifetime expenditures Risk sharing Prior authorization ti for selected indications Better selection of the target population to treat

23 Some recent reimbursement decisions i affecting MTTs NICE rejected: Erlotinib in NSCLC Bevacizumab with 5FU/LV in stage IV CRC Cetuximab second-line in stage IV CRC Sunitinib and sorafenib in renal cell PBAC in Australia rejected cetuximab in CRC Common Drug Review in Canada recommended against sunitinib and sorafenib.

24 Some recent reimbursement decisions i affecting MTTs Roche did not file for lung indication for Bevacizumab in UK, anticipating that it would not be approved based on cost-effectiveness

25 Strategies to Deal with Rising i Drug Costs Reject high h cost (high h ICER) drugs Legislate cost reductions/mandatory substitution of generics Cap lifetime expenditures Risk sharing Prior authorization ti for selected indications Better selection of the target population to treat Prizes not patents (Joseph Stiglitz)

26 Drug Capping Bevacizamab costs $US 4,400 a month in treatment of CRC Approval for NSCLC based on twice the amount of drug as for CRC ($US 8,800 a month, $100,000 a year Genentech yielded to pressure and capped the total cost of drug at $55,000 a year for patients below a certain income

27 Strategies to Deal with Rising i Drug Costs Reject high h cost (high h ICER) drugs Legislate cost reductions/mandatory substitution of generics Cap lifetime expenditures Risk sharing Prior authorization ti for selected indications Better selection of the target population to treat Prizes not patents (Joseph Stiglitz)

28 Better Selection of Target Population to Treat Use clinical and molecular markers to select the target population for treatment Treat only those with the greatest probability of benefit and for whom therapy will be cost-effective

29 EGFR in Epithelial Tumours Tumors showing high EGFR expression NSCLC 40-80% Prostate 40-80% Gastric 33-74% Breast 14-91% Colorectal >75% Pancreatic 30-50% Ovarian 35-70% High expression generally associated with: Invasion Metastasis Late-stage disease Chemotherapy resistance Hormone-therapy resistance Poor outcome

30 EGFR Signal Transduction Receptor TK Epithelial tumours Inhibitors oral TKI s MABs Ligand Ligand EGFR dimer STAT Shc Grb-2 Signal Adapters and Enzymes P13K SOS Ras PTEN Akt Raf Transcription Factors mtor FKHR GSK-3 BAD MEK 1/2 MAPK Signal Cascade Apoptosis inhibition Jun p27 Cyclin D-1 FOS Myc Proliferation

31 NCIC CTG BR21 Economic Analysis Metastatic NSCLC Erlotinib Placebo N=731 Progression free survival (HR 0.61, p<0.001) Overall survival (HR 0.70, p<0.001) Clinical predictors of outcome: female gender, adenocarcinoma, never smoker status, and Asian origin Molecular predictors: EGFR protein expression, EGFR gene amplification, EGFR and KRAS gene mutations

32 Mean costs incurred per patient Component Erlotinib Arm Placebo Arm Incremental Cost Erlotinib $11, $11,756 Diagnostic Tests $1,056 $837 + $219 Outpatient Visits $623 $477 + $146 Concomitant medications* $307 $160 + $148 Management of treatment toxicity** $70 $6 + $64 Hospitalizations $2,525 $2,562 - $37 Radiation Therapy $70 $109 - $39 Transfusions $79 $34 + $46 *non-small cell cancer-related medications. **medical therapy for grade 2+ diarrhea, rash, vomiting, stomatitis, infection, dehydration, anorexia.

33 Incremental Cost Effectiveness Ratio Erlotinib Placebo Incremental Difference Mean Cost $16,488 $4,185 + $12,303 Mean Survival (in years) ICER per year (95% CI) $95,869 ($52, ,149)

34 ICER based on Clinical Predictors of Outcome Characteristic Number ICER Gender: Female Male Histology: Adenocarcinoma Non-adenocarcinoma $ 120,671 $ 96,601 $ 75,059 $ 239,978 Smoking Never Smoker 146 $ 39,487 Status: Smoker 545 $ 504,911 Ethnicity: Asian 91 $ 83,181 Other 640 $ 109,380 Number of Prior Chemotherapy Regimens: $ 67, $ 110,411

35 ICER based on Molecular Predictors of Outcome Characteristic Number ICER EGFR Protein Expression Positive Negative $ 63,805 $ 469,003 EGFR gene mutation Exon 19 del and/or exon 21 L858R 34 $ 138,168 Wild type 170 $ 87,994 KRAS gene mutation Mutated 30 BSC dominant Wild type 176 $ 76,657 EGFR gene amplification Amplified Not amplified $ 33,353 $ 109,792

36 ICER based on Combined Clinical and Molecular Predictors of Outcome Lowest ICER ($22,564 /LYG) ($, ) Adenocarcinoma Never smoker Had received one prior chemotherapy Highest ICER ($3,862,962/LYG) Past and present smokers Wild-type EGFR K-ras gene mutation The presence of never smoking status, high h EGFR copy number, EGFR protein positive tumours predicted lower ICERs Female gender associated with higher ICER

37 ICER based on Combined Clinical and Molecular l Predictors of Outcome Subsets of patients can be identified for whom therapy appears to be within a cost- effective range Caveats: small subsets; need for caution in interpreting subset analyses; EGFR mutation status not included due to small numbers

38 NCIC CTG CO.17: Randomized Phase III Trial in mcrc Failed or intolerant to all recommended therapies, ECOG 0-2, No Prior EGFR directed therapy R E G I S T E R EGFR testing by IHC R A N D O M I Z E Cetuximab* + BSC BSC alone Disease Progression or Unacceptable Toxicity * Cetuximab 400 mg/m 2 IV week 1 then 250 mg/m 2 IV weekly 1:1 Primary Endpoint: Secondary Endpoints: Overall Survival Progression Free Survival Objective Response Rate (RECIST criteria) Safety and Quality of Life

39 NCIC CTG CO.17: Overall Survival Proportio on Alive Study arm MS (months) 95% CI Cetuximab + BSC BSC alone HR 0.77 (95% CI = ) Stratified log rank p-value = SUBJECTS AT RISK MONTHS CET+BSC BSC CETUXIMAB + BSC CENSORED BSC CENSORED Jonker et al, NEJM 2007

40 Who benefits? Is there a predictive biomarker? EGFR IHC expression EGFR gene copy K-Ras

41 The KRAS Mutations among the most common oncogenic alterations in cancer lead to constitutive activation of KRAS independent of EGFR Inhibitors that are upstream of KRAS, eg EGFR p, g receptor inhibitors may be ineffective

42 1 NCIC CTG C0.17: Overall survival in K-ras Mutant patients 0.8 Study arm MS (months) 95% CI Proportion Alive Cetuximab + BSC BSC alone HR % CI (0.70,1.37) Log rank p-value: Cetuximab BSC Cetuximab BSC Time from Randomisation (Months)

43 NCIC CTG C0.17: Overall survival in K-ras Wild-Type patients Alive Proportion Study arm MS (months) 95% CI Cetuximab + BSC BSC alone HR % CI (0.41,0.74) Log rank p-value: < Cetuximab BSC Time from Randomisation (Months) Cetuximab BSC

44 NCIC CTG C0.17: Overall Survival by K-ras Status in BSC ARM KRAS status MS (months) 95% CI Propo ortion Alive Mutated Wild-Type HR % CI (0.74,1.37) Log rank p-value: 0.97 NO PROGNOSTIC IMPACT OF K-ras STATUS 0 Mutated Wild Type Time from Randomisation (Months) Mutated Wild Type

45 NCIC CTG CO.17 Conclusions: In pre-treated t advanced d colorectal l cancer: There is no benefit in using cetuximab monotherapy in patients that have mutated K-ras tumours There is 4.7 month improvement in median survival with cetuximab in patients with K-ras wild-type tumours compared with a 1.5 month increase in overall survival for the whole group

46 Prospective Cost-effectiveness Analysis of NCIC CTG CO 17 Mean improvement in overall survival 0.12 yrs Mean improvement in QALYs 0.06 Incremental cost compared to BSC $32,435 ICER $199,742/ LYG (95% CI: $125,973 to $653,492) ICUR $399,483/ QALY (95% CI: $273,323 to $866,666)

47 Prospective Cost-effectiveness Analysis of NCIC CTG CO 17 Wild-type K-ras Mean improvement in survival 028yrs 0.28 Mean improvement in QALYs 0.9 ICER $120,061/LYG (95% CI: $88,679 to $207,075) ICUR $373,522/QALY (95% CI: $240,057 to $1,117,867)

48 Conclusions Cost-effectiveness has become very important in the decision-making for new drugs Many MTTs are not cost-effective by usual standards Risk sharing, expenditure capping or other cost limiting strategies will be necessary if advances in technology are to be widely adopted There is an urgent need for accurate biomarkers to identify precisely which patients will benefit