Two new and innovative anti-cancer drugs have come on the market recently. They work against a type of lymphoma where other drugs fail. But after Jan. 1, Medicare will cut what it pays for the expensive treatments.
Medicare's decision could leave thousands of patients unable to get a therapy that others say saved their lives.
Government officials say they're just paying what hospitals tell them the service costs. But the manufacturers say the drugs cost $10,000 more. And there's a second problem with these drugs. Doctors don't want to prescribe them — it means losing their patients to hospitals where the drugs are delivered.
One of the drugs, Zevalin, is a type of radioimmunotherapy — a radioactive compound is hooked to an antibody that latches on to cancer cells, delivering radiation directly to the cells. Zevalin and a similar drug called Bexxar are approved for use when non-Hodgkin's lymphoma comes back after treatment with other drugs — something that happens often.
Several studies show that more than half of people who stop responding to other drugs are helped by Bexxar.
The drugs are popular with oncologists, such as Joseph Connors of the British Columbia Cancer Agency in Vancouver.
"On recurrence, under the right circumstances, that is, when several of the drugs have already been tried, the best choice next is clearly Bexxar and Zevalin."
But Bexxar and Zevalin have two major problems. The first is that they're harder to administer than regular chemotherapy. Because of the radiation, they have to be given in special facilities with trained staff.
"It's a lot easier for a doctor to sit in his office, decide what should be done, write out the directions for it and get on to his next patient," Connors said.
Instead, a doctor has to find a hospital where the therapy is offered — which means losing his patient and the income.
Connors, patient advocates and the manufacturers all say that is the reason most people who could benefit from these drugs aren't told about them by their doctors.
The second problem is on the horizon. As of Jan. 1, the government's Medicare program will pay hospitals $16,400 to administer the drugs.
The reason that's a problem, says Dave Moules of GlaxoSmithKline, the maker of Bexxar, is that "the price of Bexxar that GSK sells into the market for a single course of treatment is $26,780" — or $10,000 more than Medicare will pay.
At issue is how Medicare calculated its payment for 2008. The agency looked back at what it's been paying hospitals for the last few years, says Herb Kuhn, deputy administrator of Medicare.
"We have paid, and will continue to pay, based on what the hospitals tell us they purchase these products for," Kuhn said.
Neither hospitals nor Medicare have been able to explain why last year's charges appear to be $10,000 lower than the price of the drugs.
One possible solution would be for the manufacturers to lower their prices. But that's not likely because of the radiation involved and the difficulties of antibodies. Moules says the research costs were high, and the drugs are expensive to produce.
"I don't think that lowering the price is really going to correct the underlying issue, which is a flaw in the methodology," Moules said.
Several hospitals refused to say what they're going to do on Jan. 1, when Medicare reimbursement drops. Meanwhile, Medicare is going to check the methodology behind its figures.
"We're going to go back, we're going to relook at those claims," Kuhn said, "to make sure that we're interpreting the information we got from them correctly, because the last thing we want is to underpay or overpay for a particular procedure."
While that process goes on, patients who feel that the drugs saved their lives are writing to Congress to urge a change in the program.