The WSJ gave a lot of coverage to Leonard Saltz vitriolic attack on the cost of new immunotherapies for cancer. Saltz call the prices for immunotherapy for advanced melanoma insance and immoral, some the WSJ article: High Prices for Drugs Attacked at Meeting
Cancer specialist criticizes new-treatment costs in high-profile speech
Dr. Leonard Saltz bases his fear about the unsustainability of cancer drug costs on emotion, not fact. He claims that if we treated everyone with metastatic forms of cancer with treatments costing $295000, we would spend $174 million each year and that cost would be unsustainable.
Actually, it would be a bargain. Dr. Saltz is assuming everyone who dies of cancer each year (580000) would get a combination of immune therapies. The combination in question -- nivolumab (Opdivo) and ipilimumab (Yervoy) adds about a year of life to people with advanced forms of cancer. So let’s stick with melanoma in explaining the incredible amount of value generated and money saved by such therapies.
The most recent estimate of the direct cost of treating advanced melanoma is $160,000 per person. (The direct costs of treating metastatic colorectal, breast and lung cancer are about the same.) A good portion of this cost would be eliminated by using immunotherapy because the treatments displace the use of existing medicines and hospitalization. I don’t count the amount of money saved from avoiding surgeries to remove tumor masses since the immune therapy shrinks tumors by 80 percent. But if we treat everyone with such therapies in end stage cancers, we could save $92 billion a year on less effective forms of treatment.
Further, stage IV melanoma currently has two-year survival rate of only 15 percent when treated with conventional chemotherapy. Immune therapies allow 90 percent of patients to live 2 years.
If we assume that 90 percent of people who otherwise die of cancer in a given year lived two years that would add 1.1 million life years for each group of patients. An early study estimates the productivity loss of cancer death at about $250 billion. Thus adding 1 million life years would generate $500 billion. A more conservative estimate (valuing an additional life year at $150000) would be $150 billion. And even if we assume a 60 percent response rate under either scenario, our society more than breaks even with a jump in two year survival. Of course, if 90 percent of people who live two years, wind up living 5 years, both savings in medical spending and life year value soar.
Dr. Saltz said cancer drug prices are insane and immoral. I’d say the same about someone who said – given these benefits – we shouldn’t perhaps pay even a little more.