MSKCC’s Decision Not to Purchase New Cancer Drug Sparks Editorial and Unprecedented Actions

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[T]his was the elephant in the room that nobody was talking about. There is a tremendous amount of concern about the issue of cost, and it isn’t just reflective of one drug. This was a starting point for discussion.

—Leonard B. Saltz, MD

“At Memorial Sloan-Kettering Cancer Center, we recently made a decision that should have been a no-brainer: we are not going to give a phenomenally expensive new cancer drug to our patients.” That was the opening sentence of a New York Times op-ed piece written by three physicians from Memorial Sloan-Kettering Cancer Center (MSKCC) in New York.1 In an interview with The ASCO Post, one of those physicians, Leonard B. Saltz, MD, Chief of the Gastrointestinal Oncology Service at Memorial Sloan-Kettering Cancer Center, expressed optimism that the article could itself serve to open a dialogue about the staggeringly high costs of some cancer drugs and the financial strains those costs impose.

Unprecedented Decision

The op-ed article explained that physicians at MSKCC had chosen not to use ziv-aflibercept (Zaltrap) because the drug “has proved to be no better than a similar medicine we already have for advanced colorectal cancer,” identified as bevacizumab (Avastin), “while its price—at $11,063 on average for a month of treatment—is more than twice as high.” The authors noted that ziv-aflibercept and bevacizumab offered similar survival benefits to patients with advanced colorectal cancer, about 1.4 months compared to standard chemotherapy alone, and that major clinical guidelines such as those from the National Comprehensive Cancer Network (NCCN) do not say one drug is better than the other as an option for second-line therapy.

Dr. Saltz explained that the guidelines do note that the second-line choice should be either ziv-aflibercept or bevacizumab, but not one and then the other. He also said that there has been some “concern that ziv-aflibercept appeared to exacerbate the toxicity of the chemotherapy it was given with to a greater degree than we see in bevacizumab studies.”

Based on available data and comments from physicians who focus on gastrointestinal oncology at MSKCC and its network, Dr. Saltz recommended to the MSKCC Pharmacy and Therapeutics Committee, which he chairs, “that we defer adding it to the formulary at this time, until such time as there may be different data that would make us reconsider. That was the recommendation that the formulary committee accepted,” Dr. Saltz said. “This is somewhat unprecedented, to the best of my knowledge,” he said, “because I am not aware of another new FDA-approved drug for cancer that we have not made a formulary item at Sloan-Kettering.”

Shot Heard ’Round the World

The physicians’ editorial has elicited strong responses. Harold J. Burstein, MD, PhD, a medical oncologist at Dana-Farber Cancer Institute in Boston and Editor-in-Chief of the Journal of the National Comprehensive Cancer Network, 2 stated in an editorial in that journal that “the decision at MSKCC, and more particularly its public declaration, may serve as a shot heard ’round the world for voluntary limits on the use of expensive oncology drugs.”

Less than 1 month after the op-ed article appeared in TheNew York Times, that newspaper reported that Sanofi, which together with Regeneron Pharmaceuticals, developed and markets ziv-aflibercept, would offer discounts of about 50% on the drug.3 The Sanofi statement quoted by TheNew York Times read:

“We believe that Zaltrap is priced competitively as used in real-world situations. However, we recognize that there was some market resistance to the perceived relative price of Zaltrap in the U.S.—especially in light of low awareness of Zaltrap in the U.S. market. As such, we are taking immediate action across the U.S. oncology community to reduce the net cost of Zaltrap.”

Insufficient Solution

A New York Times editorial4 called the offer to reduce the cost of the drug “a heartening sign that alert and aggressive physicians can potentially play a major role in helping to reduce the escalating costs of health care for treatments of marginal value.” Dr. Saltz, however, noted that giving discounts doesn’t adequately address the issue.

“When you give a discount, it doesn’t affect reimbursement from Medicare and it doesn’t affect copay,” Dr. Saltz explained. “Just to put it in round numbers for a thought experiment, if you had a drug that sold for $1,000, Medicare pays 95% of that wholesale acquisition cost, so Medicare would reimburse the doctor $950. If the patient has a 20% copay, the patient’s copay would be $200. Now if you lowered your wholesale acquisition cost down to $500, then the doctor would get reimbursed at 95% of that, and the patient would pay 20% of that,” he said. However, if the official wholesale acquisition price is kept at $1,000, then discounted 50%, “now the doctor is getting the drug for $500, but the doctor or the hospital, whoever is the purchaser, would still be reimbursed at $950, and the patient would still be required to pay $200 on the copay. What this does is to create, at best, an inducement—harsher words have been used—for a doctor to use the drug, and it isn’t something that deals on a societal level with the cost of the drug.”

Best Customer Gets Worst Price

Dr. Saltz said the op-ed article received so much attention because “this was the elephant in the room that nobody was talking about. There is a tremendous amount of concern about the issue of cost, and it isn’t just reflective of one drug. This was a starting point for discussion,” he said.

“We are trying to open a dialogue, not start a revolution,” he continued. “But there have been enormous impediments to getting that dialogue going.” One of the major impediments was spelled out in the op-ed article. “By law, Medicare must cover every cancer drug the FDA approves. (A 2003 law, moreover, mandates payment at the price the manufacturers charge, plus a 6% cushion.) In most states, private insurers are held to this same standard,” he added.

“We have a situation where it is not a free market, and we can’t afford to pretend that it is,” Dr. Saltz said. “Virtually everything is bought by a third party, and the largest customer is the government. We have laws that require the government to pay whatever wholesale acquisition costs the pharmaceutical company sets. And we have laws that say that the government, which is the largest purchaser, is forbidden from negotiating for a better price. I don’t know any other scenario where your best customer gets the worst price. This is an illogical and unsustainable system,” he contended.

“I don’t think it is reasonable to expect that a publicly held pharmaceutical company with a fiduciary responsibility to its shareholders will, of its own volition, lower its price,” he added. “It would be nice if there were regulations that had some means of keeping controls on the price, but we don’t have that.”

Dr. Saltz said that he and the other authors of the op-ed piece, Peter B. Bach, MD, Director of the Center for Health Policy and Outcomes at MSKCC, and Robert E. Wittes, MD, Physician in Chief, considered it “unlikely that the conversation would start unless somebody took a leap and started it. We decided that we were appropriate people to do that.”

Confronting the Costs

Confronting the reality of the high costs of cancer treatment means being willing to acknowledge that some treatments that seemed very promising may not prove to be such good ideas after all, and that everyone can’t get everything for free. From the public health standpoint, “the purpose of the copay is to create a certain amount of economic restraint on the decision to use or not use an agent,” Dr. Saltz said. “The idea is, if everything costs nothing, no one has any incentive to think carefully about whether it is an appropriate expenditure or not. The copay is designed to cause the patient, and therefore the doctor, to say, ‘Wait a minute. Is this worth it?’” he added.

“The harsh reality is, we can’t afford as a society to give everything to everyone for free,” he reiterated. “There is no aspect of society in which we do that. We don’t do it for food. We don’t do if for shelter. We can’t do it for medicine.” To provide everyone access to basic health care, “we are going to need some means of making that health-care affordable, and that means we are going to have to be somewhat selective in deciding what health care we can afford,” Dr. Saltz said.

He noted that sometimes just the mention of controlling health-care costs “is labeled rationing, and rationing is considered a bad thing. I don’t agree with that position. I believe that realistically in our economy, we ration everything. We look at the incremental cost and benefit of something, and we make decisions on how much as a society we are willing to pay for, and to what degree we are able to make it available to everybody, or alternatively, whether something should be available to someone who can afford it and not available to others.” ■

Disclosure: Drs. Saltz and Burstein reported no potential conflicts of interest.


1. Bach PB, Saltz LB, Wittes RE: In cancer care, cost matters. New York Times. October 14, 2012.

2. Burstein HJ: A “shot heard ’round the world” on cancer drug costs? J Natl Compr Canc Netw 10:1315-1316, 2012.

3. Pollack A: Sanofi halves price of cancer drug Zaltrap after Sloan-Kettering rejection. New York Times. November 8, 2012.

4. Incredible prices for cancer drugs (editorial). New York Times. November 12, 2012.

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