Dr Paul Cornes

Conflict of interest

Salary received

bull United Kingdom National Health Service

Honoraria received

bull Roche

bull Janssen

bull Sandoz

bull Lilly

bull European Generics Association

bull Teva

bull Hospira

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Comparative Outcomes Group

ESO Task Force Advisory Board on

Access to Innovative Treatment in

Europe

European School of Oncology

Piazza Indipendenza 2

6500 Bellinzona - Switzerland

Dr Paul Cornes

Consultant Oncologist

Bristol Haematology amp Oncology Centre

paulcornesyahoocouk

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Value is so much more than money

I value my work with international colleagues

Comparative Outcomes

Group

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Comparative Outcomes Group

ESO Task Force Advisory Board on

Access to Innovative Treatment in

Europe

European School of Oncology

Piazza Indipendenza 2

6500 Bellinzona - Switzerland

Dr Paul Cornes

Consultant Oncologist

Bristol Haematology amp Oncology Centre

paulcornesyahoocouk

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Value is so much more than money

I value my work with international colleagues

Comparative Outcomes

Group

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Value is so much more than money

I value my work with international colleagues

Comparative Outcomes

Group

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Strive not to be a success

but rather to be of value

Cancer 2014 - Why do we need

a focus on value

Value is so much more than money

I value my work with international colleagues

Comparative Outcomes

Group

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Value is so much more than money

I value my work with international colleagues

Comparative Outcomes

Group

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

I value my work with international colleagues

Comparative Outcomes

Group

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

There is a cost to cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

The total economic

impact of premature

death and disability

from cancer

worldwide was $895

billion in 2008

167 percent of all

healthy years lost in

the European Union

Cancer causes the

highest economic loss

of all of the 15 leading

causes of death

worldwide

cancer has the most

devastating

economic impact of

any cause of death in

the world

wwwusatodaycomnewshealth2008-12-09-cancer_Nhtm

httpwwwcancerorgacsgroupscontentinternationalaffairsdocumentsdocumentacspc-026203pdf

WHO Cancer worlds

top killer since 2010

Sorting out the funding for

cancer will be the model used

to manage other medical

conditions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

There is a cost to cancer care

httpwwwbloombergcomnews2011-06-20global-rise-in-cancer-cost-300-billion-in-2010-harvard-economist-sayshtml

FileDavid E Bloom at the World Economic Forum Summit on the Global Agenda 2008jpg

ldquoThink about health spending

as not consumption but

investmentrdquo

David E Bloom

professor of economics and

demography at Harvard

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Good news for medicine

Basic cancer science is paying back on its investment

One medical paper a minute is added to the PubMed US National

Library of Medicine

MEDLINE Citation Counts by Year of Publication Available at httpwwwnlmnihgovbsdmedline_cit_counts_yr_pubhtml

accessed 2012 Sept 11 Template2010 - Impact factor of selected medical journalsjpgcredit

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Good news for cancer treatment

Cancer survival is improving

Aaron Carroll How do we rate the quality of the US health care system ndash Disease Care The Incidental Economist

October 21 2010 at 400 am Accessed April 29 2014

OECD data on the G7 countries

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Good news for cancer treatment

Cancer survival is improving

Triggle N Half of cancer sufferers live a decade or more BBC News April 29th 2014 httpwwwbbccouknewshealth-

27194823 April 29th 2014

1971 50 1

year survival

2010 50 10

year survival

Median Survival of

Cancer in the UK has

risen from 1 to 10

years since 1971

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Good news for cancer treatment

This investment in innovation means that novel targeted biologic

approaches now dominate drug development

It is predicted that 2012 was probably the year where biologic

therapy use outnumbered cytotoxic treatments

Vaccines

Immunostimulants

Gene therapy

Supportive care

Novel approaches

Hormonals

Cytotoxics

Timbs O Sikora K Cancer in the year 2025 Cancer World 2004(September-October)12-19

httpwwwcancerworldorgpdf7556_05_Grand20Round_12_19pdf

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Good news for cancer treatment

Innovation in cancer drugs

lt1960

5 cancer

drugs

1960s

+ 2

more

1970s

+ 18

more

1980s

+ 14

more

1990s

+ 24

more

2000s

+ 23

more

2010-13

+ 20

more in

only 3

years

At this rate our decade will add 67

new cancer drugs by 2020

Cornes P Pictogram created from data in - Savage P Development and economic trends in cancer therapeutic drugs Analysis of

modern and historical treatment costs compared to the contemporary GDP per capita J Clin Oncol 32 2014 (suppl abstr e17535)

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Good news for cancer treatment

The costly war on cancer The Economist 2011 May 26 httpwwweconomistcomnode18743951

Drugs in

development

2010

900 drugs in

development

are for cancer

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Innovation - 1984

1984 Nobel Prize

for Medicine

awarded jointly

to Jerne Koumlhler

and Milstein

for the

discovery of the

principle for

production of

monoclonal

antibodies

30 years later

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

30 years of Innovation

1984 to 2014 Monoclonal antibody development

httpenwikipediaorgwikiFileDa_Vinci_Vitruve_Luc_Viatourjpg

Breast Cancer

Head and Neck

Cancer

Bowel Cancer

Leukaemia

Lymphoma

Ovary cancer

Secondary bone

cancer

Melanoma skin cancer

Macular Degeneration

Multiple sclerosis

Asthma

Heart disease

Transplant rejection

Inflammatory bowel

disease

Arthritis

30 years later

Psoriasis

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Monoclonals in cancer - lymphoma

httpwwwjnccnorgcontent8Suppl_6S-1F3largejpg

Rituximab

bull Halves lymphoma relapse

bull Prima trial reviewed at

httpwwwmedscapecom

viewarticle722470

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Monoclonals in breast cancer

Trastuzumab

bull Halves the chance of

relapse

bull Reduces death by 33

Romond EH et al NEJM 20053531673-1684

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

71 reduction in disability in multiple sclerosis

httpusersoxacuk~path0116tignew1mstrialfigjpg

Campath-H1 vs interferon

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Controlling rheumatoid arthritis

httpusersoxacuk~path0116tignew1thefggif

Thermal imaging of hand

and elbow joints beforehelliphellipand after Mab therapy

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

halves hospitalizations surgeries and

procedures in fistulizing Crohnrsquos disease

Lichtenstein GR Infliximab maintenance treatment reduces hospitalizations surgeries and procedures in fistulizing Crohnrsquos

disease GastroenterologyVolume 128 Issue 4 Pages 862-869 April 2005 httpenwikipediaorgwikiFileCD_colitisjpg

Infliximab

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Efalizumab for psoriasis

Sylvia Marecki amp Peter Kirkpatrick Efalizumab Nature Reviews Drug Discovery 20043473-474

httpwwwepgpatientdirectorgsend_articlecfmpage355titleBiologicals

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Medical MAbs to 2013

Therapeutic monoclonal antibodies approved or in review in the European Union or United States Note Information current as of 28

February 2013httpwwwantibodysocietyorgnewsapproved_mabsphp

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Good news for cancer treatment

Survival impact of some targeted therapies

data from Munoz Jet al (2012) Targeted therapy in rare cancersmdashadopting the orphans Nat Rev Clin Oncol doi101038nrclinonc2012160 Table from The

Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Accessed April 29 2014

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The world is aging life expectancy is increasing

in all countries

httpflowingdatacom20111013life-expectancy-changes

The average

life expectancy

in 2009 was 67Relationship of cancer

incidence with age

Peak age for

cancer is 70-84

years

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Bad news for cancer treatment

There will be more cancer to

treat

Expected rise in 20 yearsndash httpinfocancerresearchukorgne

wsarchivepressrelease2011-10-

28-NHS-burden-as-cancer-cases-

to-jump-by-45-per-cent

ndash httpwwwbreakingnewsiearchive

s20060607irelandpotentially-

fatal-cancer-cases-predicted-to-

double-by-2020-262312html

ndash Ibrahim E et al Current and future

cancer burden in Saudi Arabia

meeting the challenge Hematol

Oncol Stem Cell Ther 2008 Oct-

Dec1(4)210-5

UK

45 rise

Ireland

90 rise

Saudi

Arabia

800 ndash

1000 rise

1 in 4

Malaysians

will get cancer

by age 75

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Bad news for cancer treatment

Innovative drug development is slow and

expensive

From 5000 - 10000 compounds in pre-clinical trials

bull only 01 reach clinical trial stage

bull of these only 10-20 are finally approved

It takes 15 years from the target discovery to the

market at 14 Billion Euro drug

ndash Adams CP et al Estimating the cost of new drug

development Is it really 802 million dollars Health Aff

(Millwood) 200625420-428

ndash ABPI Delivering value to the UK the contribution of the

pharmaceutical industry to patients the NHS and the

economy Updated httpwwwabpiorgukour-

worklibraryindustryPages310114aspx Accessed May 12th

2014

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Public Understanding of Drug Values

More than 1000 people were interviewed as

part of a 2012 survey commissioned by the

Association of the British Pharmaceutical

Industry (ABPI)

ABPI concerned over medicines misunderstandings Pharma Times 3rd September 2012 httpwwwpharmafieldcouknews201208ABPI-

concerned-over-medicines-misunderstandings Accessed Sept 9 2014

The majority of

respondents

thought new

medicines cost

less than pound10m to

research and

develop

Estimates 2014 are

greater than 1

Billion USD per

drug

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Health economics - is not usually an

interesting topic

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

TIME 13th October 2008

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

ASCO 2009 Meeting emphasis

individualised care and cost-effectiveness

USA Medical insurance costs are rising faster than earnings and general inflation

Ward E CA Cancer J 2008589-31

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cost of USA cancer care 1963 to 2004

Cancer treatment spending in billions

US$

$13

$131

$275

$721

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

In 2003 Medicaid spent $337 billion on drugs (19 of national

spending for drugs and more than 10 of the Medicaid budget)

Medicaid expenditures ($ billions) for outpatient

prescription drugs

US$

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cancer has a cost

Elkin EB Bach PB Cancers next frontier addressing high and increasing costs JAMA 20103031086-1087

Meropol NJ Schrag D Smith TJ et al American Society of Clinical Oncology guidance statement the cost of cancer care J Clin Oncol 2009273868-3874

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Planning for the future what will happen to

costs

USA Office of management and Budget wwwwhitehousegovomb

What is the driver for increased spending

ageing populations or medical treatmentmedical

treatment

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The world spends more each year for cancer

treatment

Data IMS

Global spend on oncology drugs projected for 2010-12

Spend doubled in 4

years 2004-2008

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Confirmation in Europe Cancer drugs budgets

are doubling each 4 years

Costs of anticancer drugs

France

bull 2004 = 474 Million Euros

bull 2008 = 975 Million Euros

ndash Perrin S Therapeutic decision

making in oncology Hospital

Pharmacy Europe 2010

(SeptOct)5236-37

Spend doubled in 4

years 2004-2008

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Timeline of novel cancer drug approval

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Association of novel drugs and cancer mortality

Carin A Uyl-de Groot et al The Economics of Improved Cancer Survival Rates Better Outcomes Higher Costs Expert Rev

Pharmacoeconomics Outcomes Res 201010(3)283-292

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Association of novel drugs and cancer mortality

new medicines have

accounted for 50-60 percent

of the increase in cancer

survival rates since 1975

ndash Lichtenberg Fr The Expanding

Pharmaceutical Arsenal in the

War on Cancer National

Bureau of Economic research

Working Paper No 10328

February 2004

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cost of cancer drugs by year of approval

Limits on

Medicares

ability to

control

rising

spending on

cancer

drugs

Bach P N

Engl J Med

2009

360626-633

Cancer drug

costs rise 5x

faster than other

classes of

medicine

Bach P NEJM 2009 Feb 7

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

Cost of standard therapy has risen from

$63 8 weeks to $30675 8 weeks

500-fold rise in a decade

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cost of treatment for metastatic colon cancer

(Schrag D NEJM 2004351317-319)

The Oncologist April 1 2005 vol 10 no 4 250-261 httptheoncologistalphamedpressorgcontent104250F2largejpg

lt100$

8 weeks

gt30000$

8 weeks

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Innovation is expensive

Kaitlin KI Deconstructing the drug development process the new face of innovation Clin Pharmacol amp Therapeutics 2013

Doctors say cancer drug costs are too high httpmedicalxpresscomnews2013-04-doctors-cancer-drug-highhtml Cited 21062013

12 drugs were approved by the US

Food and Drug Administration

(FDA) for various cancer

indications in 2012

11 were priced above $100000 per

year

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

What are policy-makers trying to do

Langreth R Will Health Costs Bankrupt America Forbes httpwwwforbescomforbes20110314health-care-recession-expenditure-bankrupt-americahtml Callahan D

Health care costs and medical technology httpwwwthehastingscenterorguploadedFilesPublicationsBriefing_Bookhealth20care20costs20chapterpdf Accessed May

7th 2014

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

What are policy-makers trying to do

Protect and improve the health of the population

Assure access to medical care

Achieve efficient use of health care resources

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Money doesnrsquot always buy life

Life expectancy at birth and health spend

WHO The World Health Report 2000

3 fold variation

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Money doesnrsquot always buy health

Relationship

between spend

and health is not

always clear

bull Disability-adjusted

life expectancy

relative to health

expenditure per

capita in USD in

191 WHO member

states 1999

bull WHO The World

Health Report

2000 p43

US Dollars

gt10 fold variation

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

There is no evidence that spending more will

consistently improve health

Hussey PS et al The

Association Between

Health Care Quality and

Cost A Ann Intern Med

1 January

2013158(1)27-34

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

There is no evidence that simple cuts will

consistently improve health

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cost constraints in cancer treatment

What can nations do

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

There is one certainty in medicine

Rationing does occur

by personal

ability to pay

by societyrsquos

willingness to pay

USA - one in five

families used up all of

their savings paying for

cancer treatment

Cavallo J The ASCO Post February 15

2011 Volume 2 Issue 3

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cost constraints in cancer treatment

What can nations do

Countries can set a budget for

communal spending

Lichtenberg FR Despite steep costs payments for new cancer drugs make economic sense Nat Med 2011 Mar17(3)244

Countries can set cost-

effectiveness limits to

reimbursement for new

treatments

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

What is a cancer treatment

Something that makes you live longer

Something that makes you live better

Hopefully something that does both

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Athas W F et al JNCI J Natl Cancer Inst 200092269-271

Car Parks as treatment

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Computer terminals as treatment

Investment in Information Technology is associated with better

outcomes

Each 10 increase in Health Information technology to access

EBM in a hospital saved 15 fewer deaths and 16 fewer

complications per admission and cuts costs

Amarasingham R Plantinga L Diener-West M Gaskin DJ Powe NR Clinical information technologies and

inpatient outcomes a multiple hospital study Arch Intern Med 2009 Jan 26169(2)108-14

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Education as treatment

51 of women donrsquot complete

adjuvant hormone therapy for

breast cancer

bull Increased risk in younger

women

1 Hershman DL J Clin Oncol 2010 28 4120-4128 2 httponlinelibrarywileycomdoi101002cncr25781pdf 3 EBCTG

httpwwwctsuoxacukpressreleases1998-05-16fact-sheet 4 Ma AMT American Journal of Surgery 2008196500-504

RFS Tamoxifen 5y vs control in

women lt50y - EBCTG

Non-compliance reduces

survival by 9

Role of patient education

13 million women in the USA

are prescribed hormone therapy

for breast cancer

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Supportive care as treatment

Spending to save

Randomised trial-

targeted treatment for

advanced NSCLC

bull OS better with novel

therapy

bull QOL better

bull hazard ratio for death in

the standard care

group 170 95 CI

114 to 254 P = 001

Temel JS N Engl J Med 2010363733-42

Early

supportive

care

Care when

symptoms

progress

ldquotargeted treatmentrdquo was supportive care

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Exercise as treatment

Reviewed 34 randomised

controlled trials of exercise

therapy

2234 (65) focused on

patients with breast cancer

1034 (35) on all types of

cancer

Physical activity improved

bull Quality of life

bull Physicial function

bull psychological outcomes

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Access to healthcare is driven by affordability

Sir Andrew Dillon

chief executive of

the National Institute

for Health and Care

Excellence said --

ldquothe NHS would

never be able to

afford every drug

capable of making a

difference to

patientsrdquo

Ward A Neville S Drug cost watchdog chief calls for honesty with public FTcom August 22 2014 328

pmhttpwwwftcomcmss0c62145a6-2896-11e4-8bda-00144feabdc0htmlaxzz3BQtnSrsu Accessed Aug 25 2014

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

European countries -

with formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

European countries - with budget impact or

formal cost-effectiveness approval

Adapted and modified from Zentner et al 2005

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

European countries - with clinical effectiveness

approval

Adapted and modified from Zentner et al 2005

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Aim of healthcare

bull To live longer

bull To live better

Aim of the health care systems

bull to maximise health outcomes using available resources

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economic evaluation - methodology

Simplistic model ndash apply cost constraints on ldquoexpensiverdquo drugs

Fails because some treatments that are initially expensive are highly effective and save money elsewhere in the health system

bull eg by increasing cures

bull or by saving money from other healthcare budgets

Fails because ldquocheaprdquo high volume drugs may be relatively ineffective

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about saving money

It is about using scarce resources as efficiently as possible

Economists never say ldquocheaprdquoor ldquoexpensiverdquo -

they say ldquocost-effectiverdquo or ldquonot cost effectiverdquo

You know more economics than you think

Economics for the uninitiated

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

You know more economics than you think

Economics or Οἰκονομία ndash is a Greek word

Oikos = ldquothe householdrdquo

+ Nomos = ldquowise rulesrdquo

ldquoHealth economicsrdquo =

Wise rules for managing the hospital

Economics - ldquowise rules for managing the householdrdquo

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The 2 ldquoErdquos of pharmacology

efficacy effectiveness

Can it work Efficacy

Does it work in reality Effectiveness

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The 3 ldquoErdquos of pharmaco-economics

efficacy effectiveness efficiency

Can it work Efficacy

Does it work in reality Effectiveness

Is it worth doing

compared to other

things we could do with

the same money

Cost-effectiveness

= Efficiency

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Is it worth doing compared to other things we

could do with the same money

A Pound can only be spent once

Once money has been spent on one thing ndash it is a lost

ldquoopportunityrdquo to spend it on something else

economists call this the ldquoopportunity costrdquo of spending

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Focus care to where it helps us live longer and

live better

Peter Orszag director of the White House Office of Management

and Budget May 2009 interview with NPR

ndash httpwwwfactsforhealthcarecomwhitepaperHealthcareWastepdf

ldquoEstimates

suggest that as

much as $700

billion a year in

health care costs

do not improve

health outcomes

They occur

because we pay for

more care rather

than better carerdquo

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Some countries control costs better than others

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The power of health economic thinking

Assuming we worry about costs and that some public funded health care

is essential could we perform better

185 publicly-funded interventions in the United States cost about

$214 billion per year for an estimated saving of 592 000 years of

life (considering only premature deaths prevented)

Re-allocating those funds to the most cost-effective interventions

could save an additional 638 000 life years if all potential

beneficiaries were reached Tengs TO Dying too soon how cost-effectiveness analysis can save lives Irvine California

University of California National Center for Policy Analysis 1997 (Policy Report No 204)

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Focus care to where it helps us live longer and

live better

OECD estimates 3 years extra UK life expectancy possible if we matched the efficiency of the best health systems

Isabelle Joumard IMF Conference 21 June 2011 OECD NHS inefficiencyOECD report

httpwwwimforgexternalnpseminarseng2011parispdfJoumardpdf Cited 3 July 2013

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The Tragedy of the Commons

httplpfworgagreement-protects-carrizo-plain-from-severe-overgrazing Cited 3 July 2003

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Cancer ndash

Now the greatest loss of healthy life in the world

Data from Soerjomataram I et al Global burden of cancer in 2008 a systematic analysis of disability-adjusted life-years in 12 world regions Lancet 2012 Nov

24380(9856)1840-50 Diagram from The Value of Medical Innovation httpvalueofinnovationorga-world-free-from-cancerref3 Acsessed April 29 2014

Global burden of cancer in 2008 a

systematic analysis of disability-

adjusted life-years in 12 world regions

Economic loss is gt 3 times greater

than the costs of TB Malaria and

HIV combined

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Middle income countries face a considerable

burden of cancer

Kanavos P et al The role of funding and policies on innovation in cancer drug development Report for the

European Cancer Research Managers Forum LSE September 2009

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Middle income countries face a challenge

The International Network For Cancer Treatment and Research Statisticsgt httpwwwinctrorgabout-inctrstatistics

Accessed Sept 29 2014

More cancer and Less drugs

low and middle

income countries

account for 61

of the worldrsquos

burden of cancer

yet only account

for 5 of anti-

cancer drug sales

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

worldwide map of healthcare expenditure in 2008

according to World Health Organization (WHO)

Ref worldwide map of healthcare expenditure in 2008 according to World Health Organization (WHO) URL

httpwwwezegacomnewsNewsDetailsaspxPage=newsampNewsID=2059 Accessed Nov 20 2014

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Worldwide comparison of healthcare expenditure in

2010 according to the OECD

Ref OECD 2010 health data WHO ranking

httpenwikipediaorgwikiList_of_countries_by_total_health_expenditure_28PPP29_per_capita Accessed Nov 21 2014

Malaysia =

$645 ppp

per capita

Inescapable truth some treatments we cannot afford

Ranked

80th

country for

health

spending

WHO (2010)

OECD

spend

average

$3268

ppp

Malaysia

performs

very well

with 15th

the spend

Malaysian success in

cost-effective care may

help guide 112 poorer

countries to improve

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Worldwide comparison of healthcare

The UN Development

Programme has called

Malaysia a model for other

developing countries

With a dual system in place

administering heavily

subsidised primary care to all

citizens and a private sector

delivering specialty services to

those who can afford it

average life expectancy has

risen to 74 years

The Economist April 2014

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Will future funding increases come from

taxation

Demographic and lifestyle shifts have steadily made Malaysias

population older and less healthy

The proportion of people under 15 years of age fell from 32 in

2002 to 267 in 2012 while the percentage of those aged over

60 climbed from 65 to more than 8 during the period

Comparing 2002 to 2012 MoH data

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Hypertension

+43

Diabetes

+88

Obesity

+250

This predicts a

significant

upward

pressure on

National

Health costs

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Will future funding increases come from

taxation

Government subsidies covered 55 of total healthcare spending

in 2011 according to the World Health Organisation (WHO)

In the budget for 2014 the administration allocated M$221bn

(US$69bn) to healthcare spending out of total expenditure of

M$217bn

bull representing over 10 of total government spending

Ref How sustainable is Malaysian healthcare The Economist April 11th 2014 URL

httpwwweiucomindustryarticle1991716983how-sustainable-is-malaysian-healthcare2014-04-11 Accessed Nov 6 2014

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Commercial drug development requires a return

on investment

Bayer CEO Marjin Dekkers quoted at the December 3 2013 FT

Event regarding Indian compulsory license of Sorafenib - Nexavar

ldquowe did not develop this product for the Indian market lets be

honest I mean you know we developed this product for western

patients who can afford this product quite honestlyrdquo

Ref - Claire Cassedy Transcript of Bayer CEO Marjin Dekkers quote at the December 3 2013 FT Event regarding India compulsory license of Nexavar Knowledge

Ecology International February 7 2014 httpkeionlineorgnode1924 Accessed Oct 30 2013 Bayer AGrsquos Science For A Better Life Symposium - How Scientists See

Future Research Trend BNC November 20 2013 URL httpwwwbncbayercombayerbncinsfidHow-Scientists-See-Future-Research-Trends Accessed Oct 30 2014

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Fears for the future of medicine

The we cannot afford to introduce future treatments that

the public will be demanding

That Government or health insurers will ration treatment

in a way that puts doctors and patients into conflict

That doctorsrsquo freedom to direct and prescribe will be

restricted by outside guidelines that individual doctors

and patients are powerless to influence

Physicians are not powerless in this ndash

there is much that we can do already

But this will need Physician leadership

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The options for future health spending include

the following

Carry on spending at current rates ndash postpone

the inevitable decision to contain spending

Carry on spending at current rates and improve

efficiency and productivity

bull that is buy extra time before confronting the

inevitable decision to contain spending

Align health spending growth to general long-

term growth in the economy as a whole

bull with possible adjustments to devote a

modestly greater share of GDP to health care

as GDP grows

Untenable in the

medium term

Viable possibly

medium term

Only long term

viable option if

the state is to

provide health

care from

general

taxation

Appleby J et al Spending on health care - How much is enough Kings Fund 2006 URL httpwwwkingsfundorguksitesfileskfSpendingonHealthCarepdf Accessed

Nov 2 2014

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

The Evolution of Medical Decision Making

Pre-EBM - Evidence Based Medicine

bull Focus on a novel mechanism of

action

EBM - Evidence Based Medicine

bull Focus on efficacy

VBM - Value Based Medicine

bull Focus on effectiveness and ldquovaluerdquo to

stakeholders

Huber B et al Oncology Drug Development and Value-based Medicine httpwwwquintilescomlibrarywhite-

papersoncology-drug-development-and-value-based-medicinepdf Accessed June 27 2014

VBM ldquoIs this worth doing compared with other things we could do

with the same resourcerdquo

EBM ldquoDoes this intervention make you live significantly longer or

live betterrdquo

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Classes of treatments to target for cost-effective

care

Ref Sullivan R et al Delivering affordable cancer care in high-income countries Lancet Oncol 201112933

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Malaysia would not be alone in making value

decisions in healthcare

Schwartz JAT et al Cost Consideration in the Clinical Guidance Documents of Physician Specialty Societies in the United States JAMA Intern Med

2013173(12)1091-1097 Wallace JF The limited incorporation of economic analyses in clinical practice guidelines J Gen Intern Med 2002 Mar17(3)210-20

Now - more than half

of the largest US

physician societies

explicitly consider

costs in developing

their clinical

guidance documents

Which is a big change

from 2002 when such

decisions were rare

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Not every medical problem has a scientific solution

Catastrophic rises in the cost of treatment threaten health

services across the world

Our current model for health care now demands a change in

human values or ideas of morality

bull as there are insufficient ldquocommonrdquo resources to continue on

our current path in cancer medicine

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

A switch from Evidence Base Medicine to Value Based Medicine

in Oncology requires that we understand what ldquovaluerdquo is

We need the support of the stakeholders and payers in cancer

medicine to discover that value and drive this change

Our patients their families and the public need confidence that

our next reimbursement guidelines offer the most effective

equitable and ethical plan for treatment

We need to understand the issues involved to address those

concerns

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Economics is not primarily about rationing ndash it is about using

scarce resources as efficiently as possible

Economics deals in more then money

bull It is the science of ldquowise rulesrdquo

There is little evidence that spending more will reliably improve

outcomes

bull We have to learn to spend better

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Economics ndash we need both innovation and value

to access better cancer treatment

Gottlieb Daimler Henry Ford

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Dr Lowell E Schnipper

chief of HematologyOncology Beth Israel Deaconess Medical Center

chairman of ASCO task force on value in cancer care

We understand that we

doctors should be and are

stewards of the larger

society as well as of the

patient in our examination

room

Pollack A Cost of Treatment May Influence Doctors New York Times 2014 April 17 Grateful nation Lowell E Schnipper MD

httpwwwgratefulnationorgsitePageNavigatorevening_of_gratitudeEvening_of_gratitude_bios Accessed June 5th 2014

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Despite the stresses - We have chosen to treat cancer

It has the greatest

GLOBAL impact of

any threat to life

But is that true for an

individual

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Despite the stresses - We have chosen to treat cancer

It has the greatest

GLOBAL impact of

any threat to life

But is that true for an

individual

DOI httpdxdoiorg101007s11523-011-0196-3

Conclusions

Despite the stresses - We have chosen to treat cancer

It has the greatest

GLOBAL impact of

any threat to life

But is that true for an

individual

Despite the stresses - We have chosen to treat cancer

It has the greatest

GLOBAL impact of

any threat to life

But is that true for an

individual

Risk of Life Span Shortening as a Consequence of

Occupation Disease or Various Other Conditions

Expected Days of Life Lost

2800

2100

2000

1600

1100

980

900

20

435

400

200

74

40

12

1

Radiation worker

Speed limit increase

from 55 to 65 mph

Service in VietnamAll accidents

30 pounds overweight

Working as a coal

miner

1 pack of cigarettes a

day

Being unmarried

Heart disease

Being male rather

than female

Having Cancer

Risk of Life Span Shortening as a Consequence of

Occupation Disease or Various Other ConditionsExpected Days of Life

Lost

2800

2100

2000

1600

1100

980

900

20

435

400

200

74

40

12

1

Radiation worker

Speed limit increase

from 55 to 65 mph

Service in VietnamAll accidents

30 pounds overweight

Working as a coal

miner

1 pack of cigarettes a

day

Being unmarried

Heart disease

Being male rather

than female

Having Cancer

83 million years of

ldquohealthy liferdquo lost due

to death and disability

from cancer in 2008

167 percent of all

healthy years lost in

the European Union

5 of 6 years are lost to

something other than

cancer

DOI httpdxdoiorg101007s11523-011-0196-3

Albert Einstein

Strive not to be a success

but rather to be of value