Dr. Leonard Saltz, MD; Chief, Gastrointestinal Oncology Service; Head, Memorial Sloan Kettering Dr. Saltz will discuss selected successes and failures in cancer research efforts, and what we can learn from each, and will take a frank look at costs of care, and at business and government policies that are undermining progress and creating disparities in access to affordable, effective care.

1. Leonard B. Saltz, MD
Chief, Gastrointestinal Oncology
Department of Medicine,
Chair, Pharmacy and Therapeutics Committee
Memorial Sloan Kettering Cancer Center
New York, NY
PROGRESS IN COLORECTAL CANCER
CARE:
The Hope, the Hype, and the Gap
Between Reality and Perception

2. Disclosures
 I have consulted for and/or received research support
from:
• Roche/Genentech
• Bristol Myers Squibb
• Imclone
• Bayer
• Merck
• Boston Biomedical
• Abbott
• Biothera
• Novartis
• Sanofi
• Immunomedex
• Lorus
• Synta

3. Overall Thesis
 We have made progress in the treatment of colorectal
cancer
 We’ve made far less progress than we like to believe.

4. The pessimist sees difficulty in every
opportunity. The optimist sees the
opportunity in every difficulty.
- Winston Churchill

5. Overview (Why are we having this talk?)
 The more you understand about where we are in CRC
treatment and research, the more you can do to help
 Congress is in a position to help in a number of ways;
funding research is just one of them

6. What Congress Could Do Better
Fund more research
Fund smarter research
Change laws that uncouple cost from value
Make the results of research more affordable
and more universally available

8. Are we doing the best trials?
Current NCI Cooperative Group CRC trials:
 Post Surgical Treatment of Colon Cancer Question:
• Is 3 months of chemo non-inferior to 6 months?
• 11,000 patients world wide
 Pre Surgical Treatment of Rectal Cancer Question:
• Is chemo alone non-inferior to chemo + radiation?
• 1000 patients

9. COST
of
CARE
COST
of
CARE
The Elephant in the Room

10. Cancer Drug Prices:
No longer just a small piece of a bigger problem
Medicare Part B drug spending (mostly cancer drugs)
– 1997: $3,000,000,000
– 2004: $11,000,000,000
Medicare spending over this period increased by 47%,
while Medicare Part B drug spending increased by 267%

11. Robert Langreth Nov 25, 2014 1:05 PM Bloomberg News

12. Value = Benefit / Cost

13. Other Examples of Prices Unsupported by Value
 Savings and Loan bubble
 Dot com bubble
 Subprime Mortgage/real estate bubble

14. Oxaliplatin-Based Chemo + Avastin
Overall Survival
Saltz et al: J Clin Oncol 2008
HR=0.89 (97.5% CI 0.76–1.03)
p=0.08
CapeOx / FOLFOX-4 + Avastin n=699 (420 events)
CapeOx/ FOLFOX-4 + placebo n=701 (455 events)
1.0
0.8
0.6
0.4
0.2
0
Months
Survivalestimate
0 6 12 18 24 30 36
19.9 21.3

15. NO16966
CapeOx /FOLFOX + Avastin
Response Rate
Saltz et al, J Clin Oncol 2008
Chemo+ ChemoChemo+ Chemo
placebo + Avastinplacebo + Avastin
Investigator-Investigator-
reportedreported
49%49% 47%47%
p = 0.90p = 0.90
IndependentIndependent
responseresponse
committeecommittee
38%38% 38%38%
p = 0.99p = 0.99

16. Annual Revenue of Top-Selling Anti-Cancer Drugs

17. Some reasons our cancer drugs can lack value
 “Health care above consideration of cost”
 Someone else is paying
 We’re scared
 We don’t know what we’re buying (or selling?)

18. What we have here is a failure to communicate.
Misunderstanding of the terms:
– “Significant”
– “Highly” significant
– “Progression-Free Survival”
– “Survival”
– “Decreased risk of death”
– “New treatment option”
– “Targeted therapy”
– “Well-tolerated”

20. CRYSTAL Trial:
Subgroup analysis of PFS time by
on-study skin reactions: cetuximab + FOLFIRI
Van Cutsem et al: NEJM 2009
Skin reaction grade 0 or 1, n=244
*There were no grade 4 skin reactions
0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0
Progression-free survival time (months)
1.00
0.75
0.50
0.25
0.00
PFSestimate
Skin reaction grade 2, n=243
Skin reaction grade 3*, n=112
11.3 mo5.4 mo 9.4 mo

21. The Aflibercept Story

22. Aflibercept (Zaltrap)
• Fusion protein of key domains
from human VEGF receptors
1 and 2 with human IgG Fc¹
• Blocks all human VEGF-A
isoforms, VEGF-B, and
placental growth factor
(PlGF)²
• High affinity – binds VEGF-A
and PlGF more tightly than
native receptors
1. Holash J et al. Proc Natl Acad Sci USA. 2002;99:11393-11398.
2. Tew WP et al. Clin Cancer Res. 2010;16:358-366.

23. VELOUR Study: Overall Survival
Van Cutsem E et al. ESMO/WCGC 2011, Barcelona, Abstract O-0024.

24. TML Trial: Overall Survival
OSestimate
Time (months)
1.0
0.8
0.6
0.4
0.2
0
0 6 12 18 24 30 36 42 48
No. at risk
CT 410 293 162 51 24 7 3 2
0
BEV + CT 409 328 188 64 29 13 4 1
0
Chemo (n=410)
Chemo + Bev (n=409)
9.8 mo 11.2 mo
Unstratifieda
HR: 0.81 (95% CI: 0.69–0.94)
p=0.0062 (log-rank test)
Stratifiedb
HR: 0.83 (95% CI: 0.71–0.97)
p=0.0211 (log-rank test)
Median follow-up: Chemo, 9.6 months (range 0–45.5); BEV + CT, 11.1 months (range 0.3–
44.0)

25. What do and don’t the TML and VELOUR trials
say:
 They don’t say that either drug “rescues” the other
 Therefore medically defensible to do either, but not
medically defensible to do both.
 Thus, they provide no new line of therapy

26. More Terms to Define:
Targeted Therapy
New Treatment Option

27. Second line Avastin vs. Second line Zaltrap
Cost difference
Drug Dosage
Schedule
12 week dose,
mg
Payment Method Source 12 week price
Zaltrap
4mg/kg
q 2 weeks 1680 $1824/100mg 95% of AWP $30,643.20
Avastin
5mg/kg
q 2 weeks 2100 $66.062/10mg 106% of ASP Q2 2012 ASP $13,873.02

28. Impact of MSKCC Actions on Price of Zaltrap®

29. Impact on Cost of Care: back of the envelope
Bevacizumab
– $2864 per 400 mg vial*
– Average weekly dose = 175 mg
* Red Book 2012

30. Cost of Bev beyond progression
(Cost of only the bev; no MD, nursing, or pharmacy fees, no other meds)
 $2864 per 400 mg vial -> $7.16 per mg
– 175 mg/week x 4.33 weeks/month = 758 mg/month
– If vials are shared:
758 mg/month x $7.16/mg = $5427.28 per month,
x 5.7 months = $30,935.50 per patient treated
for 1.4 months OS benefit ->
$30,935.50 x 8.57 = $265,117 per year of life saved
– If vials not shared, then $2864 every 2 weeks for 24.7
weeks (5.7 months) -> $35,370.40 per patient treated
$35,935.40 x 8.57 = $303,124 per year of life saved
– (note: these are not Quality-adjusted)

31. Thought Experiment:
The Dollar Value of a Human Life
(above baseline)
 Assumptions:
– Let “value” = what society is willing to pay
– Society is currently willing to pay $303,000 per year
– Assume average U.S. Life expectancy of 78.7 years
Dollar value of a U.S. human life would equal:
303,000 dollars/year x 78.7 years = $23,846,100

32. Unsustainable

33. Unsustainable

34. Unsustainable (adj) : not able to be
maintained or supported in the future,
esp. without causing damage or
depletion of a resource.
- Dictionary.com’s 21st
Century Lexicon

35. Why it is unsustainable
 At current rates, by late 2015, out of pocket health
care costs plus health care premium for family
insurance plan will require approximately half of
average US household income.
 By 2028, 100% of household income would be needed
to cover insurance premium plus out of pocket costs.
– Lee Newcomer, Sr VP Oncology and Genetics, United Healthcare
(quoted from ASCO Post, vol 4 Dec 1, 2013)

36. Why it is unsustainable
“I don’t envision a future in which there will be
more money in the health care system.”
– Lee Newcomer, Sr VP Oncology and Genetics, United Healthcare
(quoted from ASCO Post, vol 4 Dec 1, 2013)

37. Care is Shifting: Price impact on point of service
Moran report: US Oncology Network, Community Oncology Alliance and ION Solutions

38. Site of care: Why, and What now?
 Collapsing margins on doctor’s office side
– (ASP+6% to ASP + 4.2% to ASP +3%)
 Projected consequences:
– Fewer office practices able to give chemo
– Margin squeeze further incentivizes higher cost
agents
– Hospital-based care more expensive, so
– Added (non-drug) treatment costs for private
insurance

39. Consolidation

40. Sustaining the unsustainable;
the role of the US government
 FDA, the gatekeeper
– Approval; “efficacy” defined by the p value
– Forbidden from considering price
 CMS, the major purchaser
• Obligated to buy what FDA approves
• Forbidden from negotiating price
• Struggling to restrict use
 Congress, the overseer
– Created COI in MDs selling chemo at mark up
– Heavily influenced by lobbies

41. What could Congress do differently?
 Empower FDA to set minimum efficacy standards
– Require “clinically significant” rather than “statistically
significant” results
– Define “clinically significant” before the trial starts
 Empower FDA to consider proposed price versus
benefit and toxicity in approval process.

42. What could Congress do differently?
 Empower CMS to negotiate prices
 Permit Americans to purchase drugs from abroad
 Remove financial incentives for doctors to use the
most expensive drugs

43. What else might we do differently? (Speculative)
 Limit direct-to-consumer advertising of prescription
drugs
– No CMS reimbursement for drugs marketed directly
to consumers?
 Pay for Performance (for drugs?)
– Different plans cover different levels of efficacy?
Safety?
 N.I.C.E.

44. London Times
February 19, 2015

45. You can always count on Americans to do
the right thing - after they've tried
everything else.
-Winston Churchill

46. Two parallel discussions and how they intersect
1. We, as a nation, spend too much on health care, and
should spend less
2. We, as individuals, expect (demand?) that we have no
out of pocket health care expenses
These concepts are antithetical.
In the absence of individual moral hazard, there is no
individual incentive to limit health care costs

47. What’s Happening Outside the U.S. ?
Brand (Nexavar®) vs. Generic Sorafenib
Price Bayer charges: 280,000 rupees ($5600) per month
Price of Natco Drug: 8,800 rupees ( $176) per month

48. Cost of Care: Anti EGFR vs Anti VEGF
Drug UK £ UK £ UK £ % of US
cost
Per Mg Monthly 10.6 month
course
(£ 1.0= $1.6)
Erbitux
(250 mg/m2/wk)
£ 1.78 £ 3,858 £ 40,895 53%
Vectibix
(6 mg/kg q.o.w.)
£ 3.79 £ 3,944 £ 41,806 55%
Avastin
(5 mg/kg q.o.w.)
£ 2.31 £ 2,002 £ 21,221 55%
Cost based on a patient who is 80 kg, 180 cm, BMI 24.7, BSA=2.0 m2
UK prices are retrieved from the British National Formulary and correspond
to the amounts paid by the NHS to the dispensing pharmacy, as per the
NHS Prescription Services, before any discounts or additional fees are
applied.

49. The Message to Pharma:
Evolve or Die: What has to change
 Establish true value in a treatment
 Avoid incrementalism, because sooner, rather than
later, the market will not support it
 In order to avoid incrementalism, one has to be willing
to let go of ideas that are not panning out

50. Drug Development Costs: Where is the Money spent?

51. What Can We Researchers Do Differently?
Define “clinical significance” up front
– Set goals for each trial in terms of:
• Months improvement in survival or PFS
• Absolute percentage improvement in 5yr DFS
– Use statistics to confirm positive results, not define
them.
Project financial consequences of success up
front with estimates of current costs.
Consider impact of anticipated incremental
toxicity vis-à-vis benefit.

52. What Can We Researchers Do Differently?
 Set maximum limits on size of trials
– If we need more than 1000 patients to show a
difference, it is unlikely to be a clinically significant
difference.
– Proposal: no phase III arm greater than 250 pts in
metastatic setting; 500 pts in adjuvant

53. Coping with reality:
High-cost cancer drugs policy at MSKCC
 Since 2005, high dollar chemo has required pre-
approval
 Drugs are permitted to be dispensed if:
– It is for an FDA-approved indication
– It is for an indication listed in the NCCN
compendium with a 1 or 2A indication
 Also permitted if:
– 3rd
party payer confirms willingness to pay
– Individual is willing and able to pay privately

54. Conclusions
 Prices of cancer drugs are not related to value
 Current prices are unsustainable.
 High drug prices limit availability of care, and further
increase economic health care disparities
 High compensation for incremental benefit encourages
just that….incremental benefit
 Thus far, cancer drug prices have been largely protected
from rational cost/benefit considerations, and from market
forces. This is starting to change.

55. Unless someone like you cares a
whole awful lot, nothing is going to
get better. It's not.
-Dr. Seuss