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Dr Paul Cornes
Conflict of interest
Salary received
bull United Kingdom National Health Service
Honoraria received
bull Roche
bull Janssen
bull Sandoz
bull Lilly
bull European Generics Association
bull Teva
bull Hospira
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Comparative Outcomes Group
ESO Task Force Advisory Board on
Access to Innovative Treatment in
Europe
European School of Oncology
Piazza Indipendenza 2
6500 Bellinzona - Switzerland
Dr Paul Cornes
Consultant Oncologist
Bristol Haematology amp Oncology Centre
paulcornesyahoocouk
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Value is so much more than money
I value my work with international colleagues
Comparative Outcomes
Group
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Comparative Outcomes Group
ESO Task Force Advisory Board on
Access to Innovative Treatment in
Europe
European School of Oncology
Piazza Indipendenza 2
6500 Bellinzona - Switzerland
Dr Paul Cornes
Consultant Oncologist
Bristol Haematology amp Oncology Centre
paulcornesyahoocouk
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Value is so much more than money
I value my work with international colleagues
Comparative Outcomes
Group
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Value is so much more than money
I value my work with international colleagues
Comparative Outcomes
Group
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Strive not to be a success
but rather to be of value
Cancer 2014 - Why do we need
a focus on value
Value is so much more than money
I value my work with international colleagues
Comparative Outcomes
Group
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Value is so much more than money
I value my work with international colleagues
Comparative Outcomes
Group
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
I value my work with international colleagues
Comparative Outcomes
Group
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
There is a cost to cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
The total economic
impact of premature
death and disability
from cancer
worldwide was $895
billion in 2008
167 percent of all
healthy years lost in
the European Union
Cancer causes the
highest economic loss
of all of the 15 leading
causes of death
worldwide
cancer has the most
devastating
economic impact of
any cause of death in
the world
wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm
httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf
WHO Cancer worlds
top killer since 2010
Sorting out the funding for
cancer will be the model used
to manage other medical
conditions
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
There is a cost to cancer care
httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml
FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg
ldquoThink about health spending
as not consumption but
investmentrdquo
David E Bloom
professor of economics and
demography at Harvard
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Good news for medicine
Basic cancer science is paying back on its investment
One medical paper a minute is added to the PubMed US National
Library of Medicine
MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml
accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Good news for cancer treatment
Cancer survival is improving
Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist
October 21 2010 at 400 am Accessed April 29 2014
OECD data on the G7 countries
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Good news for cancer treatment
Cancer survival is improving
Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-
27194823 April 29th 2014
1971 50 1
year survival
2010 50 10
year survival
Median Survival of
Cancer in the UK has
risen from 1 to 10
years since 1971
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Good news for cancer treatment
This investment in innovation means that novel targeted biologic
approaches now dominate drug development
It is predicted that 2012 was probably the year where biologic
therapy use outnumbered cytotoxic treatments
Vaccines
Immunostimulants
Gene therapy
Supportive care
Novel approaches
Hormonals
Cytotoxics
Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19
httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Good news for cancer treatment
Innovation in cancer drugs
lt1960
5 cancer
drugs
1960s
+ 2
more
1970s
+ 18
more
1980s
+ 14
more
1990s
+ 24
more
2000s
+ 23
more
2010-13
+ 20
more in
only 3
years
At this rate our decade will add 67
new cancer drugs by 2020
Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of
modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Good news for cancer treatment
The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951
Drugs in
development
2010
900 drugs in
development
are for cancer
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Innovation - 1984
1984 Nobel Prize
for Medicine
awarded jointly
to Jerne Koumlhler
and Milstein
for the
discovery of the
principle for
production of
monoclonal
antibodies
30 years later
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
30 years of Innovation
1984 to 2014 Monoclonal antibody development
httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg
Breast Cancer
Head and Neck
Cancer
Bowel Cancer
Leukaemia
Lymphoma
Ovary cancer
Secondary bone
cancer
Melanoma skin cancer
Macular Degeneration
Multiple sclerosis
Asthma
Heart disease
Transplant rejection
Inflammatory bowel
disease
Arthritis
30 years later
Psoriasis
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Monoclonals in cancer - lymphoma
httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg
Rituximab
bull Halves lymphoma relapse
bull Prima trial reviewed at
httpwwwmedscapecom
viewarticle722470
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Monoclonals in breast cancer
Trastuzumab
bull Halves the chance of
relapse
bull Reduces death by 33
Romond EH et al NEJM 20053531673-1684
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
71 reduction in disability in multiple sclerosis
httpusersoxacuk~path0116tignew1mstrialfigjpg
Campath-H1 vs interferon
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Controlling rheumatoid arthritis
httpusersoxacuk~path0116tignew1thefggif
Thermal imaging of hand
and elbow joints beforehelliphellipand after Mab therapy
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
halves hospitalizations surgeries and
procedures in fistulizing Crohnrsquos disease
Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos
disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg
Infliximab
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Efalizumab for psoriasis
Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474
httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Medical MAbs to 2013
Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28
February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Good news for cancer treatment
Survival impact of some targeted therapies
data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The
Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The world is aging life expectancy is increasing
in all countries
httpflowingdatacom20111013life-expectancy-changes
The average
life expectancy
in 2009 was 67Relationship of cancer
incidence with age
Peak age for
cancer is 70-84
years
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Bad news for cancer treatment
There will be more cancer to
treat
Expected rise in 20 yearsndash httpinfocancerresearchukorgne
wsarchivepressrelease2011-10-
28-NHS-burden-as-cancer-cases-
to-jump-by-45-per-cent
ndash httpwwwbreakingnewsiearchive
s20060607irelandpotentially-
fatal-cancer-cases-predicted-to-
double-by-2020-262312html
ndash Ibrahim E et al Current and future
cancer burden in Saudi Arabia
meeting the challenge Hematol
Oncol Stem Cell Ther 2008 Oct-
Dec1(4)210-5
UK
45 rise
Ireland
90 rise
Saudi
Arabia
800 ndash
1000 rise
1 in 4
Malaysians
will get cancer
by age 75
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Bad news for cancer treatment
Innovative drug development is slow and
expensive
From 5000 - 10000 compounds in pre-clinical trials
bull only 01 reach clinical trial stage
bull of these only 10-20 are finally approved
It takes 15 years from the target discovery to the
market at 14 Billion Euro drug
ndash Adams CP et al Estimating the cost of new drug
development Is it really 802 million dollars Health Aff
(Millwood) 200625420-428
ndash ABPI Delivering value to the UK the contribution of the
pharmaceutical industry to patients the NHS and the
economy Updated httpwwwabpiorgukour-
worklibraryindustryPages310114aspx Accessed May 12th
2014
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Public Understanding of Drug Values
More than 1000 people were interviewed as
part of a 2012 survey commissioned by the
Association of the British Pharmaceutical
Industry (ABPI)
ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-
concerned-over-medicines-misunderstandings Accessed Sept 9 2014
The majority of
respondents
thought new
medicines cost
less than pound10m to
research and
develop
Estimates 2014 are
greater than 1
Billion USD per
drug
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Health economics - is not usually an
interesting topic
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
TIME 13th October 2008
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
ASCO 2009 Meeting emphasis
individualised care and cost-effectiveness
USA Medical insurance costs are rising faster than earnings and general inflation
Ward E CA Cancer J 2008589-31
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cost of USA cancer care 1963 to 2004
Cancer treatment spending in billions
US$
$13
$131
$275
$721
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
In 2003 Medicaid spent $337 billion on drugs (19 of national
spending for drugs and more than 10 of the Medicaid budget)
Medicaid expenditures ($ billions) for outpatient
prescription drugs
US$
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cancer has a cost
Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087
Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Planning for the future what will happen to
costs
USA Office of management and Budget wwwwhitehousegovomb
What is the driver for increased spending
ageing populations or medical treatmentmedical
treatment
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The world spends more each year for cancer
treatment
Data IMS
Global spend on oncology drugs projected for 2010-12
Spend doubled in 4
years 2004-2008
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Confirmation in Europe Cancer drugs budgets
are doubling each 4 years
Costs of anticancer drugs
France
bull 2004 = 474 Million Euros
bull 2008 = 975 Million Euros
ndash Perrin S Therapeutic decision
making in oncology Hospital
Pharmacy Europe 2010
(SeptOct)5236-37
Spend doubled in 4
years 2004-2008
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Timeline of novel cancer drug approval
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Association of novel drugs and cancer mortality
Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev
Pharmacoeconomics Outcomes Res 201010(3)283-292
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Association of novel drugs and cancer mortality
new medicines have
accounted for 50-60 percent
of the increase in cancer
survival rates since 1975
ndash Lichtenberg Fr The Expanding
Pharmaceutical Arsenal in the
War on Cancer National
Bureau of Economic research
Working Paper No 10328
February 2004
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cost of cancer drugs by year of approval
Limits on
Medicares
ability to
control
rising
spending on
cancer
drugs
Bach P N
Engl J Med
2009
360626-633
Cancer drug
costs rise 5x
faster than other
classes of
medicine
Bach P NEJM 2009 Feb 7
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
Cost of standard therapy has risen from
$63 8 weeks to $30675 8 weeks
500-fold rise in a decade
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cost of treatment for metastatic colon cancer
(Schrag D NEJM 2004351317-319)
The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg
lt100$
8 weeks
gt30000$
8 weeks
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Innovation is expensive
Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013
Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013
12 drugs were approved by the US
Food and Drug Administration
(FDA) for various cancer
indications in 2012
11 were priced above $100000 per
year
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
What are policy-makers trying to do
Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D
Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May
7th 2014
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
What are policy-makers trying to do
Protect and improve the health of the population
Assure access to medical care
Achieve efficient use of health care resources
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Money doesnrsquot always buy life
Life expectancy at birth and health spend
WHO The World Health Report 2000
3 fold variation
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Money doesnrsquot always buy health
Relationship
between spend
and health is not
always clear
bull Disability-adjusted
life expectancy
relative to health
expenditure per
capita in USD in
191 WHO member
states 1999
bull WHO The World
Health Report
2000 p43
US Dollars
gt10 fold variation
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
There is no evidence that spending more will
consistently improve health
Hussey PS et al The
Association Between
Health Care Quality and
Cost A Ann Intern Med
1 January
2013158(1)27-34
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
There is no evidence that simple cuts will
consistently improve health
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cost constraints in cancer treatment
What can nations do
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
There is one certainty in medicine
Rationing does occur
by personal
ability to pay
by societyrsquos
willingness to pay
USA - one in five
families used up all of
their savings paying for
cancer treatment
Cavallo J The ASCO Post February 15
2011 Volume 2 Issue 3
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cost constraints in cancer treatment
What can nations do
Countries can set a budget for
communal spending
Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244
Countries can set cost-
effectiveness limits to
reimbursement for new
treatments
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
What is a cancer treatment
Something that makes you live longer
Something that makes you live better
Hopefully something that does both
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Athas W F et al JNCI J Natl Cancer Inst 200092269-271
Car Parks as treatment
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Computer terminals as treatment
Investment in Information Technology is associated with better
outcomes
Each 10 increase in Health Information technology to access
EBM in a hospital saved 15 fewer deaths and 16 fewer
complications per admission and cuts costs
Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and
inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Education as treatment
51 of women donrsquot complete
adjuvant hormone therapy for
breast cancer
bull Increased risk in younger
women
1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG
httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504
RFS Tamoxifen 5y vs control in
women lt50y - EBCTG
Non-compliance reduces
survival by 9
Role of patient education
13 million women in the USA
are prescribed hormone therapy
for breast cancer
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Supportive care as treatment
Spending to save
Randomised trial-
targeted treatment for
advanced NSCLC
bull OS better with novel
therapy
bull QOL better
bull hazard ratio for death in
the standard care
group 170 95 CI
114 to 254 P = 001
Temel JS N Engl J Med 2010363733-42
Early
supportive
care
Care when
symptoms
progress
ldquotargeted treatmentrdquo was supportive care
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Exercise as treatment
Reviewed 34 randomised
controlled trials of exercise
therapy
2234 (65) focused on
patients with breast cancer
1034 (35) on all types of
cancer
Physical activity improved
bull Quality of life
bull Physicial function
bull psychological outcomes
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Access to healthcare is driven by affordability
Sir Andrew Dillon
chief executive of
the National Institute
for Health and Care
Excellence said --
ldquothe NHS would
never be able to
afford every drug
capable of making a
difference to
patientsrdquo
Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328
pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
European countries -
with formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
European countries - with budget impact or
formal cost-effectiveness approval
Adapted and modified from Zentner et al 2005
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
European countries - with clinical effectiveness
approval
Adapted and modified from Zentner et al 2005
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Aim of healthcare
bull To live longer
bull To live better
Aim of the health care systems
bull to maximise health outcomes using available resources
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Economic evaluation - methodology
Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs
Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system
bull eg by increasing cures
bull or by saving money from other healthcare budgets
Fails because ldquocheaprdquo high volume drugs may be relatively ineffective
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Economics is not primarily about saving money
It is about using scarce resources as efficiently as possible
Economists never say ldquocheaprdquoor ldquoexpensiverdquo -
they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo
You know more economics than you think
Economics for the uninitiated
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
You know more economics than you think
Economics or Οἰκονομία ndash is a Greek word
Oikos = ldquothe householdrdquo
+ Nomos = ldquowise rulesrdquo
ldquoHealth economicsrdquo =
Wise rules for managing the hospital
Economics - ldquowise rules for managing the householdrdquo
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The 2 ldquoErdquos of pharmacology
efficacy effectiveness
Can it work Efficacy
Does it work in reality Effectiveness
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The 3 ldquoErdquos of pharmaco-economics
efficacy effectiveness efficiency
Can it work Efficacy
Does it work in reality Effectiveness
Is it worth doing
compared to other
things we could do with
the same money
Cost-effectiveness
= Efficiency
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Is it worth doing compared to other things we
could do with the same money
A Pound can only be spent once
Once money has been spent on one thing ndash it is a lost
ldquoopportunityrdquo to spend it on something else
economists call this the ldquoopportunity costrdquo of spending
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Focus care to where it helps us live longer and
live better
Peter Orszag director of the White House Office of Management
and Budget May 2009 interview with NPR
ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf
ldquoEstimates
suggest that as
much as $700
billion a year in
health care costs
do not improve
health outcomes
They occur
because we pay for
more care rather
than better carerdquo
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Some countries control costs better than others
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The power of health economic thinking
Assuming we worry about costs and that some public funded health care
is essential could we perform better
185 publicly-funded interventions in the United States cost about
$214 billion per year for an estimated saving of 592 000 years of
life (considering only premature deaths prevented)
Re-allocating those funds to the most cost-effective interventions
could save an additional 638 000 life years if all potential
beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California
University of California National Center for Policy Analysis 1997 (Policy Report No 204)
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Focus care to where it helps us live longer and
live better
OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems
Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report
httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The Tragedy of the Commons
httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Cancer ndash
Now the greatest loss of healthy life in the world
Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov
24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014
Global burden of cancer in 2008 a
systematic analysis of disability-
adjusted life-years in 12 world regions
Economic loss is gt 3 times greater
than the costs of TB Malaria and
HIV combined
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Middle income countries face a considerable
burden of cancer
Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the
European Cancer Research Managers Forum LSE September 2009
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Middle income countries face a challenge
The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics
Accessed Sept 29 2014
More cancer and Less drugs
low and middle
income countries
account for 61
of the worldrsquos
burden of cancer
yet only account
for 5 of anti-
cancer drug sales
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
worldwide map of healthcare expenditure in 2008
according to World Health Organization (WHO)
Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL
httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Worldwide comparison of healthcare expenditure in
2010 according to the OECD
Ref OECD 2010 health data WHO ranking
httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014
Malaysia =
$645 ppp
per capita
Inescapable truth some treatments we cannot afford
Ranked
80th
country for
health
spending
WHO (2010)
OECD
spend
average
$3268
ppp
Malaysia
performs
very well
with 15th
the spend
Malaysian success in
cost-effective care may
help guide 112 poorer
countries to improve
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Worldwide comparison of healthcare
The UN Development
Programme has called
Malaysia a model for other
developing countries
With a dual system in place
administering heavily
subsidised primary care to all
citizens and a private sector
delivering specialty services to
those who can afford it
average life expectancy has
risen to 74 years
The Economist April 2014
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Will future funding increases come from
taxation
Demographic and lifestyle shifts have steadily made Malaysias
population older and less healthy
The proportion of people under 15 years of age fell from 32 in
2002 to 267 in 2012 while the percentage of those aged over
60 climbed from 65 to more than 8 during the period
Comparing 2002 to 2012 MoH data
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Hypertension
+43
Diabetes
+88
Obesity
+250
This predicts a
significant
upward
pressure on
National
Health costs
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Will future funding increases come from
taxation
Government subsidies covered 55 of total healthcare spending
in 2011 according to the World Health Organisation (WHO)
In the budget for 2014 the administration allocated M$221bn
(US$69bn) to healthcare spending out of total expenditure of
M$217bn
bull representing over 10 of total government spending
Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL
httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Commercial drug development requires a return
on investment
Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT
Event regarding Indian compulsory license of Sorafenib - Nexavar
ldquowe did not develop this product for the Indian market lets be
honest I mean you know we developed this product for western
patients who can afford this product quite honestlyrdquo
Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge
Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See
Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Fears for the future of medicine
The we cannot afford to introduce future treatments that
the public will be demanding
That Government or health insurers will ration treatment
in a way that puts doctors and patients into conflict
That doctorsrsquo freedom to direct and prescribe will be
restricted by outside guidelines that individual doctors
and patients are powerless to influence
Physicians are not powerless in this ndash
there is much that we can do already
But this will need Physician leadership
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The options for future health spending include
the following
Carry on spending at current rates ndash postpone
the inevitable decision to contain spending
Carry on spending at current rates and improve
efficiency and productivity
bull that is buy extra time before confronting the
inevitable decision to contain spending
Align health spending growth to general long-
term growth in the economy as a whole
bull with possible adjustments to devote a
modestly greater share of GDP to health care
as GDP grows
Untenable in the
medium term
Viable possibly
medium term
Only long term
viable option if
the state is to
provide health
care from
general
taxation
Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed
Nov 2 2014
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
The Evolution of Medical Decision Making
Pre-EBM - Evidence Based Medicine
bull Focus on a novel mechanism of
action
EBM - Evidence Based Medicine
bull Focus on efficacy
VBM - Value Based Medicine
bull Focus on effectiveness and ldquovaluerdquo to
stakeholders
Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-
papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014
VBM ldquoIs this worth doing compared with other things we could do
with the same resourcerdquo
EBM ldquoDoes this intervention make you live significantly longer or
live betterrdquo
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Classes of treatments to target for cost-effective
care
Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Malaysia would not be alone in making value
decisions in healthcare
Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med
2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20
Now - more than half
of the largest US
physician societies
explicitly consider
costs in developing
their clinical
guidance documents
Which is a big change
from 2002 when such
decisions were rare
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Not every medical problem has a scientific solution
Catastrophic rises in the cost of treatment threaten health
services across the world
Our current model for health care now demands a change in
human values or ideas of morality
bull as there are insufficient ldquocommonrdquo resources to continue on
our current path in cancer medicine
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
A switch from Evidence Base Medicine to Value Based Medicine
in Oncology requires that we understand what ldquovaluerdquo is
We need the support of the stakeholders and payers in cancer
medicine to discover that value and drive this change
Our patients their families and the public need confidence that
our next reimbursement guidelines offer the most effective
equitable and ethical plan for treatment
We need to understand the issues involved to address those
concerns
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Economics is not primarily about rationing ndash it is about using
scarce resources as efficiently as possible
Economics deals in more then money
bull It is the science of ldquowise rulesrdquo
There is little evidence that spending more will reliably improve
outcomes
bull We have to learn to spend better
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Economics ndash we need both innovation and value
to access better cancer treatment
Gottlieb Daimler Henry Ford
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Dr Lowell E Schnipper
chief of HematologyOncology Beth Israel Deaconess Medical Center
chairman of ASCO task force on value in cancer care
We understand that we
doctors should be and are
stewards of the larger
society as well as of the
patient in our examination
room
Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD
httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Conclusions
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Despite the stresses - We have chosen to treat cancer
It has the greatest
GLOBAL impact of
any threat to life
But is that true for an
individual
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other Conditions
Expected Days of Life Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
Risk of Life Span Shortening as a Consequence of
Occupation Disease or Various Other ConditionsExpected Days of Life
Lost
2800
2100
2000
1600
1100
980
900
20
435
400
200
74
40
12
1
Radiation worker
Speed limit increase
from 55 to 65 mph
Service in VietnamAll accidents
30 pounds overweight
Working as a coal
miner
1 pack of cigarettes a
day
Being unmarried
Heart disease
Being male rather
than female
Having Cancer
83 million years of
ldquohealthy liferdquo lost due
to death and disability
from cancer in 2008
167 percent of all
healthy years lost in
the European Union
5 of 6 years are lost to
something other than
cancer
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value
DOI httpdxdoiorg101007s11523-011-0196-3
Albert Einstein
Strive not to be a success
but rather to be of value