What does the US buy and what does it get for chemotherapy drugs? Comments Jeffrey S. McCullough What I like about this paper • Oncology context – Evolving technology and policy • Thorough and thoughtful – Address costs and quality – Theoretically and empirically sound approach • International comparison – Addresses important and visible issues – Ahead of its time (Sherry Glied just called for more of these) What I don’t like about this paper • International comparison – These are hard… • Unobserved cross-country differences may be large • These measures need to be accurate – Distribution of treatments (Q) – Treatment prices (P) – Treatment benefits Conditions • Why colorectal, NSC lung, and breast cancer? – Hopefully not because they’re expensive in the US market • Would like to see that these conditions exhibit – Average expenditures per case in US – Average expenditure changes over time Patients • US data – 3.5% non-random sample of oncology patients. – US physician specialty and practice settings appear representative • Treatments are heterogeneous within US – High rate of off-label treatments – Substantial differences in colorectal cancer regimens across Medicare and private insurance populations • Is it possible to control for patient age distribution – I suspect the problem is smaller across private insurers Off-label uses • Physicians frequently and increasingly use off-label treatment regimens • Dropped from data – Lack survival and QALY data – May be the best we can do • What if these are valuable? – Could be complementary to other expensive treatments or just worth more Prices • US and EU IMS price data may not measure the same thing – US: usually based on final point of sale (pharmacy, hospital, physician office) – EU: based on contract negotiated with the government • Consequences of intermediate steps may be important • This assumes I correctly remember international IMS data collection procedures… Tax treatment • Taxes aren’t consistently treated in US and EU – US data (implicitly) include producer and intermediate taxes in price. – EU data exclude producer and distributer taxes • These are transfers from manufacturers to society, not social costs – Tax-induced distortions are costs but those should be small in this setting • Overestimating real US prices Distribution costs • Usually small in the US but are often large in EU – Included in US prices – Excluded from EU prices • Conceptually, large EU distribution costs probably not relevant – this is a separate problem • Included US distribution costs may be high for some oncology treatments (e.g., biologicals) – Should be deducted from US prices for consistency What is our fair share? • High prices could have dynamic consequences – Comparison to QALYs is especially useful • ($50k-$100k)/QALY may be on the low side – We seem to be paying plenty for colorectal cancer and NSCLC • Except for colorectal cancer, the more expensive treatments are “worth it” – May still be getting gouged • Wealth effects – we should expect higher US prices Why are we paying more? • Could be pure, unchecked, market power • Most drastic differences are in colorectal cancer – After big US expenditure spike EU seems to be catching up • Are these long-run differences or a short-run consequences of new innovation?