New drug candidate necitumumab, which is being reviewed by the FDA as a treatment for patients with locally advanced or metastatic squamous non-small cell lung cancer, received a low cost-effectiveness evaluation in a study published in JAMA Oncology.
Daniel A Goldstein, MD
New drug candidate necitumumab, which is being reviewed by the FDA as a treatment for patients with locally advanced or metastatic squamous non-small cell lung cancer (NSCLC), received a low cost-effectiveness evaluation in a study published in JAMA Oncology by researchers at Emory University and the Georgia Institute of Technology.
Using a new methodology for introducing cost considerations into treatment decisions, the researchers found that necitumumab should be priced at a 10th of the average price for many new cancer drugs, based on cost of a quality adjusted life year (QALY) of $100,000 to $200,000.
“Cancer drugs have been skyrocketing in recent years, and these prices are not linked to the benefit that the drugs provide,” said lead study author Daniel A Goldstein, MD, of the Winship Cancer Institute of Emory. “These rising prices are unsustainable to the system. Potentially life-saving drugs should carry a high price tag, but drugs such as necitumumab that extend life expectancy only by a matter of weeks should cost significantly less.”
The FDA is currently evaluating an application for necitumumab, based on findings from the phase III SQUIRE trial. In this trial, after a follow-up of approximately 25 months, the median overall survival with necitumumab plus chemotherapy was 11.5 versus 9.9 months with the chemotherapy alone (HR = 0.84; P = .012). Based on these data, the FDA is expected to make a decision on the drug by the end of 2015.
Drawing further on data for necitumumab from the pivotal SQUIRE trial, Goldstein and colleagues designed incremental cost-effectiveness ratios (ICERs) across a range of values. Based on these calculations, the incremental survival benefit from necitumumab was 0.15 life years and 0.11 QALYs.
The largest dollar amount for necitumumab that remained under the $200,000 cost per QALY was $1,850 per 21-day cycle. At this amount, the total cost for the drug would be $22,061. Based on a sensitivity analysis, to meet a QALY of less than $100,000, necitumumab would need to cost less than $563 per cycle. For a QALY of less than $200,000, the drug would need to cost less than $1309 per cycle.
“When the cost of necitumumab was greater than $6628 per cycle, there was greater than 99% likelihood that the ICER exceeded $500,000 per QALY,” the authors wrote.
Lilly has yet to indicate how it will price necitumumab. However, most new cancer drugs cost in excess of $10,000 a month. Given this information, the researchers said it would be helpful to develop pricing parameters based on medication and administration costs balanced with life expectancy, adverse effects, and quality of life.
Drug companies have been subject to criticism in recent months regarding the price of cancer medications. Critics claim that prices are based on the market’s ability and willingness to pay, rather than according to the true value of the drugs.
This structure leads to soaring costs for small incremental gains in survival, which causes financial hardship for patients, the authors wrote. As a result, value considerations need to play a higher role in treatment decisions.
“In the United States, the conventional paradigm is to study the cost-effectiveness of a drug after it is approved by the FDA and available in the marketplace,” they wrote. “These analyses are rarely used to guide coverage decisions.”
The authors stated that value considerations in oncologic drug purchases are becoming more common in Europe, where authorities commonly use drug prices in one country as a bargaining point for obtaining price concessions in another. Given the importance of controlling drug prices on a global level, value considerations must be introduced into drug pricing in the United States.
Though the authors applied their cost-effectiveness study only to necitumumab, they said “It is likely that many oncology drugs in clinical practice in the US would fare poorly in cost-effectiveness analyses.”
Goldstein DA, Chen Q, Ayer T, et al. Necitumumab in Metastatic Squamous Cell Lung Cancer Establishing a Value-Based Cost [published online August 27, 2015]. JAMA Oncol. doi: 10.1001/jamaoncol.2015.3316