Critics of Zaltrap say the drug provides the same survival benefit as Genentech's Avastin when either drug is added to standard chemotherapy. Like Zaltrap, Avastin is also used to inhibit angiogenesis in patients with colorectal cancer, but Zaltrap did so at more than twice the price. At launch, Zaltrap was priced at an average of more than $11,000 per month for treatment compared with about $5000 per month for Avastin. Concerned about the question of Zaltrap's value, Memorial Sloan-Kettering Cancer Center decided not to give the drug to its patients.
In an October 2012 op-ed article in The New York Times, three physicians at Sloan-Kettering (two of whom have served as paid consultants to Genentech) say the decision should have been a "no-brainer" (1). The exclusion of Zaltrap from Sloan-Kettering's formulary, though, didn't come easy, according to the doctors. That's because, they say, the culture of medicine equates new with better. "Our refusal to adopt this remarkably expensive therapy," they wrote, "risks being labeled 'rationing,' not 'rational'." Sanofi swiftly moved to cut the price of its drug in half, according to a report in The Cancer Letter (2).Today's pressures on drugmakers reflect greater pressures throughout the entire healthcare ecosystem as payers, patients, and providers wrestle with the escalating cost of healthcare and push systems around the world away from cost-based to value-based. For pharmaceutical companies, this reflects not only a growing pressure on pricing, but pressure from all quadrants of the healthcare world to demonstrate the value their products provide to justify their costs. This new reality is altering the life-sciences landscape and changing business models, development strategies, and funding opportunities for companies.
That pressure will only continue in the US, with the US Supreme Court leaving the Obama Administration's landmark healthcare reform legislation largely intact. The re-election of President Obama and the preservation of a Democratic majority in the Senate mean that efforts to repeal the legislation will be put to rest and the focus will shift to implementation of the law.
As of this writing, a fight in Washington over the impending fiscal cliff was under way. If not resolved before year end, sequestration could trigger broad cuts to the federal budget that could have significant effects on the life-sciences industry. Most notable would be cuts to the National Institutes of Health and FDA, even cutting into the 2012 reauthorization of fees paid by industry to FDA under the Prescription Drug User Fee Act in exchange for timely reviews of products seeking marketing approval.