Tuesday, July 5, 2011

Drug companies in America: The costly war on cancer | The Economist

Cancer is not one disease. It is many. Yet oncologists have long used the same blunt weapons to fight different types of cancer: cut the tumour out, zap it with radiation or blast it with chemotherapy that kills good cells as well as bad ones.

New cancer drugs are changing this. Scientists are now attacking specific mutations that drive specific forms of cancer. A breakthrough came more than a decade ago when Genentech, a Californian biotech firm, launched a drug that attacks breast-cancer cells with too much of a certain protein, HER2. In 2001 Novartis, a Swiss drugmaker, won approval for Gleevec, which treats chronic myeloid leukaemia by attacking another abnormal protein. Other drugs take different tacks. Avastin, introduced in America in 2004 by Genentech, starves tumours by striking the blood vessels that feed them. (Roche, another Swiss drug giant, bought Genentech and its busy cancer pipeline in 2009.)

These new drugs sell well. Last year Gleevec grossed $4.3 billion. Roche's Herceptin (the HER2 drug) and Avastin did even better: $6 billion and $7.4 billion respectively. Cancer drugs could rescue big drugmakers from a tricky situation: more than $50 billion-worth of wares will lose patent protection in the next three years.


This month Pfizer, an American company, announced that America's Food and Drug Administration (FDA) would speed up its review of a cancer drug called crizotinib. Roche submitted an FDA application for a new medicine, vemurafenib. The industry is pouring money into clinical trials for cancer drugs (see chart).

This is part of a shift in how big drug firms do business. For years they have relied on blockbusters that treat many people. Now they are investing in more personalised medicine: biotech drugs that treat small groups of patients more effectively.

Last year the FDA approved Provenge, developed by Dendreon of Seattle to train the immune system to fight prostate cancer. In March the FDA approved Yervoy, Bristol-Myers Squibb's drug to treat melanoma. And there are promising drugs in the pipeline. Pfizer's crizotinib attacks a protein encoded by a gene found in fewer than 5% of patients with non-small-cell lung cancer. Roche's vemurafenib attacks advanced melanoma by blocking the mutated form of a gene, B-RAF. Both Pfizer and Roche are developing tests to help doctors identify suitable patients for their drugs.

The snag, from society's point of view, is that all these drugs are horribly expensive. Last year biotech drugs accounted for 70% of the increase in pharmaceutical costs in America, according to Medco, a drug-plan manager. This trend will continue as drug firms develop new ways to treat, for example, multiple sclerosis and rheumatoid arthritis.

Cancer plays a huge role in raising costs. America's National Institutes of Health predict that spending on all cancer treatment will rise from $125 billion last year to at least $158 billion in 2020. If drugs become pricier, as seems likely, that bill could rise to $207 billion.

Not all these new drugs work. In December the FDA said that Avastin's side effects outweighed its meagre impact on breast cancer. (Genentech will argue otherwise in a hearing in June.) More generally, some people reckon that new cancer drugs offer small benefits at an exorbitant price. Provenge costs $93,000 for a course of treatment and extends life by an average of four months. Yervoy costs $120,000 for three-and-a-half months. Some patients live much longer, which fuels demand for the drugs. But others spend a lot and get little. Otis Brawley, chief medical officer for the American Cancer Society, calls the new treatments "the next frontier", but adds: "We are not buying a lot of life prolongation with these drugs."