Optional copayments on anti-cancer drugsBMJ 2013; 346 doi: http://dx.doi.org/10.1136/bmj.f349 (Published 24 January 2013) Cite this as: BMJ 2013;346:f349
- Katelijne van de Vooren, researcher,
- Alessandro Curto, researcher,
- Livio Garattini, director
- 1Centre for Health Economics, Mario Negri Institute for Pharmacological Research, 24020 Ranica (BG), Italy
- Correspondence to: L Garattini
- Accepted 7 December 2012
Although the total number of new drugs (new chemical entities) approved has gradually decreased over the past decade, the proportion that are expensive biological agents has grown dramatically. In particular, the number of new biological agents registered for treating cancer—so called targeted therapies or personalised medicine1—is increasing, and the costs of these treatments are rising too, with high prices justified by the combination of high research and development costs and small target populations.
Furthermore, although the national authorities that regulate pharmaceutical pricing and reimbursement may exert some control over drug costs in the community setting, their influence on hospital expenditure (where most biological agents are used) is more limited. The emotive nature of cancer also makes it difficult for agencies to resist calls for reimbursement of these high costs drugs, even if their efficacy is marginal. It has therefore proved hard for health authorities either to lower the prices of biological agents or to deny reimbursement, which gives the pharmaceutical industry an incentive to continue developing them.2 The situation is potentially unsustainable.3 Here we argue that because these drugs have only marginal efficacy it is reasonable to ask patients to contribute to their excess costs through optional copayments.
Example of bevacizumab and cetuximab
Bevacizumab and cetuximab, the first two biological agents approved for metastatic colorectal cancer, are interesting examples.4 Their approval has added further options to the existing chemotherapy regimens,5 based on combinations of four off-patent drugs (5-fluorouracil, folinic acid, irinotecan, and oxaliplatin) at various doses.
Most western European countries reimburse bevacizumab and cetuximab for metatstatic colorectal cancer, although both clinical and economic evidence seems weak. There is a lack of robust clinical trials focused on clinically relevant comparators that show a real improvement in overall survival and little convincing evidence of improved quality of life. In the UK the National Institute for Health and Clinical Excellence (NICE) does not recommend bevacizumab as cost effective either in first line treatment of metastatic colorectal cancer or for patients whose disease has progressed after first line chemotherapy. NICE recommends only the addition of cetuximab (up to 16 weeks) to first line chemotherapy regimens in patients with the wild type KRAS gene if metastases are confined to the liver and treatment is aimed at resection.6 NICE’s decisions seem consistent with the criteria to assess acceptable cost effectiveness according to the evidence, despite harsh criticism by patients’ associations (and politicians’ queries as a consequence).7 8
In general, the underlying question—rarely made explicit—is whether national health authorities are prepared to spend an increasing share of healthcare budgets on very expensive end-of-life treatments, given that their impact on survival (a few additional months at best) and quality of life (enhanced mainly by patients’ hopes) is doubtful and their cost effectiveness hardly ever proved.4 For instance, the Italian health service spends about €45m (£37m; $60m) yearly on bevacizumab for metastatic colorectal cancer to achieve perhaps four and half months’ extra life expectancy in patients with a median age of over 70 at diagnosis. We recently estimated that extending human papillomavirus (HPV) vaccination to 12 year old boys—an evidence based strategy to prevent cervical cancer in women and rare HPV related cancers in men9—would cost slightly less in Italy at the current market price.10
The regulatory game
Assessing these treatments highlights the problems raised by market failure in healthcare, where a third party payer funds treatments prescribed by a physician for a patient who cannot be expected to behave as a rational consumer. This is especially true once a cancer metastasises and thus often becomes incurable. The emotional reaction in patients and their relatives emphasises further their “information asymmetry” with physicians and eventually undermines the main aim of end stage treatments—that is, relieving symptoms in life’s final phase.
This is also the background to a regulatory “game” between third party payers and drug companies. Organisations like NICE aim to generate incentives for drug companies to produce cost effective drugs. Companies respond by developing “life saving” drugs that are costly to produce and hence justify high prices. High cost cancer drugs produced by genetic engineering are the perfect response as they enable this powerful kind of emotional blackmail, often triggered by lobbying from patients’ associations that are hand in hand with the drug industry (such lobbying and political challenge seems to have been crucial to NICE’s recent weakening of its cost effectiveness criteria for assessing end-of-life treatments8). Third party payers that fully fund the high costs of such drugs generate incentives for drug companies to produce more of these drugs. This suggests the need to move away from such a policy.
General argument for copayments
Copayments could help support the decisions taken by third party players and prevent political pressure from hindering their adoption.8 11 Copayments are the sums that patients are asked to pay for healthcare. In theory, copayments not only raise funds when general taxation and health contributions do not cover all healthcare expenses but also restrict “moral hazard,” when those who consume resources do not pay for them and hence have no incentive to consume wisely.12
Nevertheless, copayments have disadvantages.13 14 15 Firstly, they are inequitable because sick people pay twice for healthcare (through taxes or insurance and again through the direct copayment) and also place a greater burden on poor patients than on richer ones. Secondly, if payments cause people not to seek healthcare when they need it, their health may suffer and they may need more expensive care later. Thirdly, the overall reduction in consumption may affect effective as well as medically inappropriate treatments. Finally, copayments do not seem to be aimed at the right “player” since decisions on appropriate treatment are mainly in the hands of doctors, rather than uninformed patients.
Copayments on drugs in Europe can be roughly classified as mandatory or optional.16 In the first group are fixed copayments (such as the flat charge per prescription item in the UK1) and proportional copayments (such as a percentage of the product price, as in France, depending on the medical benefit of the drug and the severity of the disease3). Optional copayments are typically the share of a drug price that exceeds the reference price fixed by third party payers (box).
Copayments and reference pricing
Reference pricing involves setting a cap for each active ingredient or group of active ingredients considered equivalent (for example, in therapeutic effects, molecular structure). Each drug company is free to fix its own price above the cap in principle, the difference being covered by patients if they choose that drug. Patients who opt for drugs costing the same as or less than the reference price make no copayment. Generally, reference prices are set in the lower band of market prices, so companies are effectively forced to reduce the prices of many products.17
France, Germany, Italy, and the Netherlands all apply optional copayments, although in different ways. In France and Italy reference prices cover only one active ingredient and are limited to off-patent drugs. In Germany and the Netherlands reference pricing covers groups of therapeutically equivalent products and includes both off-patent and on-patent drugs.
When reference pricing is applied to a single substance and includes only off-patent drugs, low priced products are unlikely to be supported in the long run by the pharmaceutical industry, as the slow take-off of the generics market in Italy suggests.18 When reference pricing covers groups of drugs and includes both off-patent and on-patent drugs it can effectively contain the prices of patented “me too” substances and keep generics on the market at the same time, as the German and Dutch experiences show. In those countries optional copayments have pushed drug companies to lower prices, as they strive to keep their market share in the face of patients unwilling to cover the difference over the reference price.19 20 The best known case is atorvastatin in Germany, where the manufacturer refused to cut the price and lost almost all its market share despite an aggressive national newspaper campaign claiming negative consequences on health of switching to other statins.21 This kind of scheme is likely to discourage industry from launching scarcely innovative me-too drugs in the long run.
Optional copayments seem more relevant for containing costs and are less open to political influence. Such copayments may play a part—still only partially explored—to steer patients’ decisions towards more cost effective drugs, without necessarily affecting their health or raising equity issues.
Copayments and expensive cancer drugs
On the basis of European experience of optional copayments in community care, we think optional copayments could help contain expenditure on very expensive medicines that provide extra emotional comfort rather than a real health benefit.
We propose that health authorities set a life gain threshold for each cancer (for example, six months for metastatic colorectal cancer), decided on the basis of the overall survival with standard therapy. This would distinguish low efficacy biological agents that only postpone death (under threshold) from innovative ones that give a real survival gain (over threshold). The gain with new drugs should reflect the clinical evidence provided by the clinical trials conducted for approval. If drugs below the life gain threshold cannot be denied reimbursement for political reasons, health authorities could set an “automatic” reference price for them, adding an extra amount to the standard therapy price for the life gain, estimated by projecting the cost of the standard therapy over this additional period. Manufacturers would be free to set their price above the reference price, and patients wanting to be treated with new drugs that are below the life gain threshold should cover the difference over the reference price.
Such a scheme should have several consequences. Third party players would be able to make healthcare services more sustainable by restricting their expenditure on expensive end-of-life treatments with marginal effect on survival or quality of life. Yet patients could still access these treatments, which may help to limit political trouble.
At the same time, raising the bar of life gain for reimbursement should steer research investment towards more promising fields in the long run. Raising patients’ copayments should also discourage companies from setting prices too high.
Effect on communication
Oncologists will have to explain the lack of cost effectiveness of these drugs to patients so that they and their relatives can decide whether to use them. Copayments might therefore help improve communication with patients, based on clinical evidence, while at the same time reducing their exposure to drug industry promotion. Patients could benefit from participating in superiority clinical trials designed to assess primary endpoints, and their clinicians would have an incentive to enter them into such trials.
By definition copayments will always be a cost to patients, and they enable wealthier citizens to enjoy even more discretion in choosing healthcare services—as they do in any other realm of life. Nevertheless, they would be paying only for something that their health system had determined was not cost effective. They and their relatives would be better informed.
This proposal will probably sound provocative to many, but we hope it will stimulate debate. Death is an unavoidable fact of life, hard for patients and their relatives to accept. False hopes are a sad short term illusion that can only be judged subjectively. However, if emotive behaviour leads to a huge opportunity cost for society as a whole, optional copayments may be an ethical part of health policy.
Cite this as: BMJ 2013;346:f349
Contributors and sources: We conducted a web based survey to identify the existing copayments in the six main western European countries: France, Germany, Italy, the Netherlands, Spain, and the United Kingdom. KvdV is a pharmacist, AC a health policy analyst, and LG a health economist. All authors contributed to the design and the writing of the paper and approved the submitted version. LG is guarantor.
Competing interests: All authors have completed the ICMJE unified declaration form at www.icmje.org/coi_disclosure.pdf (available on request from the corresponding author) and declare: no support from any organisation for the submitted work; no financial relationships with any organisations that might have an interest in the submitted work in the previous 3 years; no other relationships or activities that could appear to have influenced the submitted work.
Provenance and peer review: Not commissioned; externally peer reviewed.