Genentech: Britain's National Health Won't Pay for Avastin

The Financial Times “A dose of reality” explores the controversy over the British National Health Service's (NHS) refusal to pay for medical services for patients who use certain high cost drugs. The National Institute for Clinical Excellence (NICE) advises the NHS on the cost-benefit of drugs. Genentech’s (DNA) Avastin cancer treatment is approved for sale in the UK, but NICE has determined that it is not cost-effective.

The first issue is whether the NHS should provide medical services for cancer patients willing to pay for Avastin or other high cost drugs themselves. Alan Johnson (health secretary) pledged to review “top-up payments”. Previously, he contended that the practice would break the NHS principle of equal access. The British have always had a parallel private health insurance system and private doctors and hospitals for those that could afford to pay up.

The second issue that the FT surfaced is whether cost-benefit stifles innovation. Harpal Kumar, head of charity Cancer Research states that most cancers are cured through surgery and radiation – not drugs. NICE agrees, and further states that advanced drugs only extend life by a few months.

The biotechnology industry counters that they must be paid huge sums for small innovations to promote expensive research. Progress is in slow and steady steps, with very few dramatic breakthroughs. The industry claims that traditional cost-benefits should not apply.

I gained an important insight into our own American health system. It seems that Americans have only two choices in health insurance: all-inclusive, catastrophic insurance and limited benefit plans. Both types of insurance typically include high cost hospital administered drugs. The only difference is that limited benefit plans have a lifetime cap of $30,000 to $50,000.

We Americans would be better served if our private health insurers adapted a cost-benefit based third option. This middle ground modeled after the British system would be far better than low lifetime caps. Give insurance buyers the option of foregoing extremely expensive end of life treatments for substantially lower premiums. The side benefit is that eliminating high cost drugs from most insurance plans would force these drugs to be more competitively priced.

I know critics will complain that I am proposing a two-tier healthcare system, where only the wealthy get advanced treatments. I say “get real”- all or nothing is certainly not working.

Comments

[Michael Shu...:]

Your analysis would be fine if this was about engineering a bridge, not curing a human being. While the typical patient responds to Avastin and lives longer for 5.5 months, some live more than two years. What is the value of a human life? An advanced prosthetic device for a returning vet costs $65,000 -- should we give them a simple peg leg since we should not pay for them to enjoy life to the fullest with a more functional leg? The real issue is the government's role in determining who lives and who dies -- it should be minimal -- consumers should be choosing life insurance policies that clearly state what the company will and will not pay for in fairly general understandable terms.

On another note, the NICE was overruled by British courts when they refused to pay for Herceptin for a breast cancer patient. My guess is the same thing will eventually happen for Avastin once Genentech publishes longer term survival data for a subset of the population being treated -- in the US, of course. Then the National Health Service can determine, statistically, how much money it saved by killing off some people prematurely.

For the record, I write a biotech investment newsletter and recommend Genentech. I do not own the stock.

2008 Jun 25 03:28 PM

[nova:]

The National Institute for Clinical Excellence (NICE) is correct about Genentech’s (DNA) Avastin.

The media and too many financial analysts are either hype Avastin or do not know what they are talking about. The real Avastin clinical benefits are very marginal if any.

Let us examine the facts of using Avastin in various cancers:

1. Metastatic colorectal cancer (mCRC)
Avastin benefits in 1st-line mCRC are very marginal when the drug is used in combination with the latest chemotherapy like Folfox or Folfiri. The latest clinical trials did not show any Overall Survival (OS) benefits.

The information that Avastin increases OS by 5 months comes from the old trial when Avastin was combined with an old chemotherapy drug (irinotecan).

Yes indeed, Avastin increased OS from 15 months to just over 20 months. However, the new chemo drug Folfox alone provides the same 20 months OS.

Many physicians are using Avastin in 3rd-line mCRC but there are absolutely no clinical data to support such Avastin use in this setting at all. This is called "off-label" use.

2. Lung Cancer
Avastin did show 2 months OS benefits for a very select group of lung cancer patients (OS was increased from 10 months to 12 months).

3. Breast Cancer
Avastin did not show any OS in breast cancer patients.


Lately, the FDA approves cancer drugs based on Progression Free Survival (PFS). PFS is a cancer marker showing that cancer progression was halted/delayed. However, PFS is a very complicated marker when radiologists must very carefully examine patients x-rays determining tumor sizes. This is a very subjective process since tumors' boundaries are not very clear.

Very often the company and independent radiologists come to different conclusions regarding to PFS. At the same tome, OS is a very precised parameter (a patient is either alive or dead).

2008 Jun 25 05:17 PM

[loquitur:]

Writer 'nova' posits that Avastin has no survival advantage over FOLFOX
chemotherapy, yet statistically-signific... studies such as ECOG 3200
show this is precisely the case, which is how Avastin received approval for this indication:

professional.cancercon...

Even if we concede that the OS advantage is only 2-3 months (but
longer for many, since this is a statistical median), that Britain's
medical economists want to override their doctors' recommendations
with hard-nosed evaluations of the worth of life extension would
never fly across the pond.

It's not hard to imagine thousands of lawsuits against a doctors or insurance companies here in the States with the following preamble "Ladies and gentleman of the jury, do you mean to tell me that
you cut my client's life eight weeks short because your
cost-benefit analysis showed he was not worth the extra $10K
cost of the drug combination over those weeks?". False economy!

2008 Jun 26 10:39 AM

[vassar:]

Your comment about the fallacy of the two-tier health care system is right on! Can we afford to pay for everything for everybody. Rich and famous people will always get 'better' care. One just has to look at Ted Kennedy, the big LIBERAL, who when all the way to Duke for his brain surgery (even bypassing Mass General/Harvard Med)! He is one of the main proponents of a one-tier health care system, except when it comes to his health.

2008 Jun 26 01:17 PM

[dsrtwriter:]

A two tier system is inevitable, and as Vassar above notes, the greatest proponents of single payer government care intend it only for the "little people". Limousine Barack will never accept the care he would mandate for all the "po folks".

Having said that, it is a very slippery slope to allow health care economists to impose cost benefit analysis to new drugs. In cases where studies clearly show no benefit to a drug, there is no debate.
But when a drug with a strong theoretical underpinning is having some success, it gets more complicated.

Doctors get blamed for using new treatments because they are not "cost effective".

Well frankly, most seniors and poor people could be regarded as not "cost effective" to give much treatment to!!

So where does it end? Do we only spend money on working,productive people? Do we adopt the attitude of Canada, Britain, and worst of all, the Netherlands, where, when someone other than ourselves gets a major problem, it is "nature taking its course".

ie. Is it OK when your neighbor has to wait 9 months for a cardiac stent, nursed along on medication, and if he/she drops dead in the meantime, it is just "unfortunate"?

For the United States, the key to a health system which can afford to encourage new innovative treatments lies in:

1. Developing and maintaining a first world economy which creates highly productive jobs,so that we can fund our health system,both for the productive and the retired.

2. Controlling our current unbridled illegal immigration, which places such a burden on our health system.Maybe if those fleeing South American resource rich countries were forced to stay in their countries, they would finally revolt and throw out the corrupt governments profiting from the wealth. There is no reason Mexico should be a poor country.

3. Holding other countries more responsible for financing the defense of their nation.Maybe Canada should spend more on its own defense,rather than hitching a free ride off the American taxpayer.

In summary, improvement in the health system is not an easy fix, but I fear that the Obamaniacs will succumb to the Marxist view of everyone being equal, but as in Animal Farm, some are more equal than others.

2008 Jun 26 01:52 PM

[nova:]

I n d u s t r y F l a s h
26 June 2008

NICE Cancer Antibody Reviews Terminated

Roche Declines To Answer Request For More Avastin Data

* Termination of Avastin Reviews in the UK - The UK body NICE, which decides whether drugs should be available free on the National Health Service (NHS), announced that the reviews for Avastin in 1st line metastatic non-small cell lung cancer (NSCLC) & 1st line metastatic breast cancer were terminated.

Avastin failed to show overall survival benefit in breast cancer as well as when used with European preferred chemo in lung cancer.

* Insufficient Evidence Provided, Despite Requests From NICE - NICE states there was a lack of sufficient evidence to assess Avastin as Roche failed to submit further evidence requested.

The head of NICE stated "Roche would rather not supply the drug in the UK than risk a negative opinion.

* NICE Does Approve Biologics, Such As Herceptin & Erbitux, When Benefit Is Robust - Herceptin has an unquestionable benefit and was approved by NICE within 2 weeks of regulatory approval.

Erbitux is also recommended for use in head and neck cancer. This demonstrates NICE will recommend drug use on the NHS where there is a clear patient cost - benifit ratio

Analysts are cautious on Roche as concerns over expansion of Avastin in Europe grow as it has failed to extend life in colon, breast & lung cancer with modern chemotherapy.

2008 Jun 28 06:12 PM

[R.J Steffens:]

"The biotechnology industry counters that they must be paid huge sums for small innovations to promote expensive research. Progress is in slow and steady steps, with very few dramatic breakthroughs. The industry claims that traditional cost-benefits should not apply."

Interesting article, thanks. In a somewhat related note, I wrote an article about two promising peptide based BC vaccines that are in development in collaboration with the United States Military Cancer Institute:

seekingalpha.com/artic...

The peptide vacines mentioned would cost much less than Herceptin or Avastin. E75 has shown survival benefit in a subgroup of a completed Phase II, and AE37 is now in a large efficacy Phase II trial and last week AE37 was also announced that it is to be trialed at the Mayo Clinic for a melanoma vaccine. AE37 is already in a prostate cancer vaccine trial at prestigous St Savas.

Continued success for Col Peoples and these vaccines would be great news, and give her2 expressing cancer patients MUCH less expensive treatment options for safe and effective treatment. These peptide vaccines have had no safety concerns and in the case of AE37, it was the first ever to have a robust immuno response without an adjuvant.

Hence, the "dramatic breakthroughs" may come from the smallest of companies, whose research is attracting the greatest of collaborators. If approved, they would shake up the entire vaccine and oncology field. With much lower projected costs, it should be a new treatment the British National Health Service and our own insurance companies would support.

2008 Jun 29 01:18 PM