Health care spending in the United States is like a runaway train. It seemingly can't be slowed.
In 2014, the U.S. spent over $3 trillion on health care. About 17 percent of our gross domestic product is used on health care expenditures, almost double what is spent in the U.K. (8.8 percent) and 50 percent higher than any other country.
This macroeconomic data is eye-opening and is regularly a source of discussion on nightly news TV shows. But there's a microeconomic story too, and it shouldn't be pushed to the side.
What really happens economically to cancer patients? For many, the reality is grim. The payment structure in the U.S. for cancer drugs forces patients to make life and death decisions based on their financial status. This is unacceptable.
Reform is needed on two fronts. Providers should have access to cancer drugs across national boundaries, providing entry into more affordable markets on behalf of their patients.
Additionally, the federal Centers for Medicare and Medicaid Services should be allowed to negotiate directly with the pharmaceutical industry for pricing on cancer therapies, again reducing the cost burden on the national budget.
Let's take a closer look at why such reform is needed by examining the financial hardship caused by prescription cancer drugs.
Thirty percent of cancer survivors go into debt at some point in their care journey, and 3 percent file for bankruptcy. The percentage is higher if you are younger than 65.
Unfortunately, those with the four most common cancers—colorectal, breast, prostate and lung, which account for close to half of all cancer diagnoses—are at higher risk for the development of financial distress.
Additionally, people with a cancer diagnosis are three times more likely to file for bankruptcy than are people without cancer. Finally, financial insolvency is a risk factor for early mortality for patients with cancer, especially for those with colorectal or prostate cancer.
The monthly cost for new cancer drugs, especially immunologically or genomically based therapies, has increased seventy-sevenfold since 1975. A single drug can now cost over $300,000 per year. New studies showing promising clinical results with combinations of new drugs can potentially drive the cost of care to close to $1 million annually.
While the pharmaceutical industry cites the rising costs of drug development as the primary driver for the price escalation, there are two problems with that argument. The first is that the cost of cancer drugs in the United States is three times that in the U.K., and up to six times higher than in many other developed countries. Secondly, after a drug is developed, the price continues to rise.
As an example, Gleevec was introduced in 2001 as a revolutionary new drug to treat a relatively rare form of leukemia—chronic myelogenous leukemia (CML)—at a price of $26,000 a year. It now costs $120,000 a year. This price catapult is in spite of the fact that two similar drugs have subsequently been released.
It would be one thing if patients needed to take this drug for only a few months. Unfortunately, patients need to take it forever; otherwise, the CML usually recurs.
Cancer drugs are not a luxury item, like an expensive car, that people can choose to buy or not to buy. In the case of Gleevec, the choice is to live or not to live. Not really a choice. Unfortunately, and not surprisingly, patients with a higher co-pay for Gleevec are more likely to discontinue (17 percent) or not stick to (42 percent) their treatment plan.
Ten states have now introduced legislation to make drug research and development costs transparent in an effort to drive down the cost of prescription drugs. Whether this will work is conjectural, and accurate accounting of whatever data is provided is an obvious challenge.
Vice President Joe Biden discussed the soaring cost of cancer drugs at the recent Moonshot Summit, calling it a major issue. But, at present, solutions are far from obvious. Ideally, the pharmaceutical industry payers, providers and the federal government would start an initiative—right now—to collaborate and devise strategies to curb this price escalation.
I see cancer patients every day. The financial distress that the cost of care imparts on them—microeconomics, in practice—is very real. To think that close to 20 percent of patients will stop taking a lifesaving drug due to high co-pays is unfathomable. As an industry, we should all be ashamed that money overrides prudent treatment.
When prices come down, mortality rates will surely follow.
Brian Bolwell is chair of the Taussig Cancer Institute at the Cleveland Clinic.
