September 2014, Vol 3, No 6

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Determining the Value of Cancer Therapies: A Paradigm Shift Focused on Quality, Outcomes, and Cost

Winston Wong, PharmD

Value-Based Cancer Care

Winston Wong, PharmD, is president of W-Squared Group, Longboat Key, Florida and former associate vice president of pharmacy management, CareFirst BlueCross BlueShield, Baltimore, Maryland.

According to the 2013 Annual Report on Progress Against Cancer published in 2014 by the American Society of Clinical Oncology (ASCO), cancer death rates have declined by 21% among men and by 12% among women since the 1990s, and more than 13 million cancer survivors are alive in the United States today.1 This is in part thanks to the growing understanding of cancer at the molecular level, which enables the development of new targeted therapies. The question remains, however, at what cost did we achieve these improvements?

The economic environment within the healthcare sector presents challenges from the perspective of all stakeholders. Those stakeholders who are at financial risk for the provision of patient care are facing constant challenges. No other medical specialty is more sensitive to this financial struggle than oncology. The value of technology is more easily understood in some areas of oncology practice, such as genomic profiling. Genomic profiling provides the oncologist with the necessary information to manage the patient with cancer more effectively, and to select the most appropriate treatment regimens, whether targeted or nontargeted therapies.

Commenting on the recent ASCO annual report, ASCO past president Clifford A. Hudis, MD, chief, Breast Cancer Medicine Service, Memorial Sloan Kettering Cancer Center, New York City, noted, “We are witnessing the acceleration of our shift into a new era of medicine in which our knowledge of the molecular basis and activity of cancers leads to ever more precise treatments that offer increased efficacy and reduced toxicities.…Precision medicine is now a reality for an increasing number of patients.”

Thus, genomic profiling provides value in its potential to improve outcomes, improve the patient experience, and reduce healthcare cost. The inefficiency of not being able to administer targeted therapies leads to variability in the clinical outcome, as well as adds unnecessary toxicities to patients, and increases overall care costs to healthcare stakeholders and the entire US healthcare system. The value of these tests remains largely unrecognized by payers.

Personalized medicine, however, comes at a cost. Discussing the “State of Cancer Care in America: 2014,” Lowell E. Schnipper, MD, chair, ASCO’s Value in Cancer Care Task Force, outlined the goals of the task force, citing the report’s finding that the US annual cost of providing cancer care is projected to reach $173 billion by 2020, representing a 40% increase from 2010.2 Clearly, we cannot sustain this cost trend.

The cost of new treatment regimens is a major contributor to this ever-rising cost trend. Results of a new study presented at ASCO 2014 by Rena Conti, PhD, assistant professor of health policy and economics, University of Chicago, show that even after adjusting for inflation and improved survival, the cost of antineoplastic drug prices has increased 5% to 7% annually between 1995 and 2013 ($1200 vs $9700 monthly). There is little disagreement by healthcare stakeholders that this cost trend is unsustainable.

According to the World Health Organization, the healthcare costs per capita in the United States are ranked the highest compared with other countries; however, the quality of our healthcare system is ranked number 37 among 191 countries. The reasons for this are beyond the scope of this discussion, but as an industry, we must work to develop a process by which we can evaluate the value of treatment regimens objectively, and with transparency.

The value determination of a treatment regimen should be based on clinical efficacy, safety and tolerability, and cost, and should encompass the interests of all stakeholders, including patients, providers, and payers. All too often, one stakeholder significantly influences the treatment decision-making process, frequently with little regard to other stakeholders.

Determining “value” will force us to evaluate treatment regimens in a very different way. By defining value, we will be able to differentiate between regimens that only provide an incremental benefit and those that significantly improve outcomes, as well as taking into consideration the question, “at what cost?”

The question is—how do we define and determine value? Earlier this year, ASCO announced its effort to develop a working definition of “value” based on clinical benefit, toxicity, and cost of treatment regimens. The goal of that initiative is to develop a standard methodology by which treatment options can be assessed. The goal is that oncologists should be well versed in the methodology of value assessment, and be able to explain and present the value of treatment options to their patients. It is expected that patients will then be able to make an informed decision regarding their treatment direction.

As payers gradually begin to accept this methodology, payers will then be able to assess the value of treatment options from their perspective, through the use of claims data, to help guide their policy decisions and benefit designs. Ideally, upfront collaboration among payers and providers would bring together the clinical expertise of the oncologist and the utilization and financial data of payers to form the “value score” that could be assessed by the patients.

The barriers to success in oncology, as noted by ASCO, include the need to show quality, efficiency, and transparency, and the challenge of addressing the rising costs of new cancer treatments, related tests, and services. Although many in the oncology team would consider these goals lofty, it is a much needed paradigm shift away from focusing on cost alone, and instead refocusing on outcomes, quality, and cost combined.


  1. Patel JD, Krilov L, Adams S, et al. Clinical Cancer Advances 2013: Annual Report on Progress Against Cancer from the American Society of Clinical Oncology. J Clin Oncol. 2014;32:129-160.
  2. Mariotto AB, Yabroff KR, Shao Y, et al. Projections of the cost of cancer care in the United States: 2010–2020. J Natl Cancer Inst. 2011;103:117-128.

Reprinted with permission from Value-Based Cancer Care. © 2014 Engage Healthcare Communications. Wong W. Determining the Value of Cancer Therapies: A Paradigm Shift Focused on Quality, Outcomes, and Cost. VBCC. 2014;5:1.

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