But he would have been denied that medicine if Peter Bach and his cancer pricing abacus and the PBMs that have him on their payroll have their way. The same goes with orphan drug deniers over at ICER who use essentially the same model Bach deploys. That’s because Bach calculates that Keytruda adds no more benefit than two generic drugs that were standard of care in treating melanoma.
Why do we care if Bach fiddles with his Abacus?
Recently both CVS and Express Scripts announced they were rolling out plans to determine the price and access to cancer drugs based on the value per indication as set by Peter Bach’s hedge fund funded cancer abacus. And health plans are using the abacus to determine what drugs to pay for when setting up one size fits all pathways.
To top it all off, Bach and ICER get money from the same hedge fund guy. ICER is stacked with PBM and health plan types. And they all sit around setting prices in ways that should be of some interest to the career attorneys in the Department of Justice Anti-Trust Divison. But more on this price control superPAC in another post.
For now, let’s see how Jimmy Carter – who received Keytruda as first line therapy for his advanced and metastatic melanoma – would have fared under Bach’s abacus guided price.
1. Bach would pay only $2000 for a month supply (4 vials) of Keytruda instead of the Medicare price of $9200. Essentially Bach pegs the price to the average overall survival of a drug compared to standard of care. So apparently Bach believes that Keytruda is not much better than interleukin-2 and dacarbazine unless you cut the price to match those two generic drugs.
2. In general, Bach pays less for less overall survival even if a new drug or combination has produced the first clinical benefit in years. Hence, Bach would pay $470 to use Erbitux in an indication specific arrangement for advanced head and neck cancer (compared to about $10000 for colorectal cancer.) Yet Erbitux was the first drug in decades to increase overall survival. In other words, as a disease becomes more difficult to treat the less Bach pays for it. Innovators are being told they will get paid below generic prices to help patients with greater needs.
3. Both CVS and Express Scripts put Keytruda in it’s highest cost sharing tier. Assuming a 40 percent cost share (based on the retail price and NOT the rebated price) patients would pay $3600 for the first month of treatment.
4. Anthem’s so called Cancer Quality Pathways (which pays doctors to use only certain drugs) excludes Keytruda from it’s list of medicines.
The reliance of the Abacus for indication specific pricing pre-empts a more ethical approach to treatment selection.
The Abacus accepts the one size fits all survival response when genetic and tumor variation affects outcome. The Abacus ignores the fact that better information of the variation in patients and treatment response translates into more life years and better quality of life.
Indeed, the value of identifying cost-effective treatments at the individual level for cancer patients is more than 100 times annual value of identifying the cost-effective treatment on average for the cancer population. THE ABACUS EXCLUDES THAT VALUE.
The Abacus completely ignores that many medicines are used in combination to treat melanoma.
The Abacus, as used, will enrich PBMs and insurers. CVS has openly stated that it will use indication pricing to maximize spreads between acquisition cost and retail prices. For instance, CVS VP and Head of Specialty Client Solutions Surya Singh told the National Business Coalition on Health said "I think we want to pay more for drugs that work better...to push [manufacturers] to think about pricing things that have a better impact on survival at a higher price point and pricing things that don't have as much impact on survival at a lower price point,"
Singh used the Bach abacus to claim: "Herceptin has gotten a lot of attention for being very good in breast cancer. It's very well studied and has great benefits...It's also used in gastric cancer. The benefit in gastric cancer is minimal, but [the indication] is on label. Should we pay the same for the drug on a unit costs basis when it's used for something where it doesn't work as well? I don't think so."
Except that prior to Herceptin, people with advanced gastric cancer had NO other treatment options. It was originally given to the 15 percent of gastric cancer patients that had ERBB2 overexpression and/or amplification. Overall survival was modest (2.7 months) , but significant because of dearth of other therapies to keep people alive. Now there are large initiatives to identify subsets of gastroesophageal cancer based on patterns of immune response. That's how innovation evolves. Cutting the price of taking on the most challenging tumor types cheapens the lives of those seeking to survive.
Finally, the Abacus – like many other value frameworks including ICER – ignore the value of hope and quality of life that patients place on better therapies. I regard the use of the Abacus to make reimbursement decisions without patient consent or to use the Abacus to convince patients that certain drugs are not as valuable as others is unethical.
As a former president, Jimmy Carter was able to get the best care for his melanoma. There is a chance that he’d be dead if Peter Bach’s abacus was used to guide treatment and access.
Unfortunately, it looks as though Bach’s deadly calculation will be used to ration new cancer drugs and demean their value in helping patients with most advanced tumors.
Which raises another, broader question: Who put Bach in charge? How are PBMs able to determine what drugs we get and how much we pay for them based on how much profit they can generate?
Why aren’t payors and PBMs using a more holistic and patient-centered approach to treatment selection (one that measure total economic value)?
I am happy to hear of President Carter’s cure. I am afraid that PBMs, powered by an abacus deliberately indifferent to patient differences and tumor complexity, will deny more Americans of the same opportunity to survive and thrive.