In oncology, should the cost of treatment be based on the dose of drug used. Conversely, should the cost of treatment with a specific drug be constant across different indications and across all patients within the same indication, regardless of dose. When assigning a price to a newly approved cancer drug it is clear that there are many considerations the developing company need to consider, and of course they have to stay mindful of the need to recoup the research and development costs not only from the successful program but also for the many that have failed at some point on the development journey.  However, what we have seen in some instances is the fact that, even at launch, the appropriate dose of the new drug remains ill-defined, or indeed follow-up trials and/or medical practice deviates from the initially approved dose the dose that dictated price. In addition, the same drug may be approved for use at different dose levels or schedules in a range of oncology indications highlighting the need to get the drug cost correct at its initial launch.

Indeed, there are many instances in oncology where a drug has gained regulatory approval in more than one indication, such as Roche/Genentech/Chugai's Avastin, Bayer HealthCare's Nexavar, Roche/Genentech/Chugai's Herceptin, Novartis's Afinitor and Bristol-Myers Squibb/Eli Lilly/Merck Serono's Erbitux to name a few.  In instances where drug dosing differs between oncology indications the price per cycle of therapy and total cost of the drug will vary, as illustrated by the cost of Avastin treatment in metastatic colorectal cancer (mCRC) compared with other oncology indications.

The typical monthly cost of Avastin in mCRC is half of that for breast cancer, ovarian cancer, renal cell carcinoma, glioblastoma, and non-small cell lung cancer, reflecting the differential dosing of the drug. In mCRC, the standard dose of Avastin used in clinical practice is 5 mg/kg given every two weeks with either FOLFOX or FOLFIRI, or 7.5 mg/kg given every 3 weeks in combination with CAPOX, as recommended in the NCCN guidelines (equivalent to 2.5 mg/kg weekly). However, although the aforementioned doses of Avastin are widely used in mCRC, the FDA label specifies a higher dose, of 10 mg/kg every 2 weeks (equivalent to 5 mg/kg weekly), for Avastin in combination with FOLFOX4, based on the Phase III trial leading to this regimen's approval. Similarly, in other oncology indications, Avastin is typically used at a dose equivalent to 5 mg/kg weekly.

The differential dosing and cost of Avastin between indications has been brought to the forefront of discussion by the publicized controversy surrounding the marketing price of Sanofi's Zaltrap, also an inhibitor of angiogenesis, which was approved by the FDA on August 3, 2012 for mCRC patients that have experienced disease progression on a prior oxaliplatin-based chemotherapy. On October 14, 2012, oncologists at Memorial Sloan-Kettering Cancer Center announced that Zaltrap would be excluded from the leading cancer center's treatment protocols owing to the price being around twice as high as that of the widely used dose of Avastin but with no further benefit in overall survival. So for Zaltrap, Sanofi appear to have matched the cost with the 10mg/kg two weekly Avastin/FOLFOX4 price.  Despite Avastin's label in mCRC, our primary research does not support a prescribing practice of Avastin at 10 mg/kg, which is corroborated by the significant push back met by Sanofi at their pricing strategy for Zaltrap.

On November 8, Sanofi released a statement in response to the criticism announcing that they would reduce the net cost of Zaltrap. It has been reported that the magnitude of the cut will be approximately 50 percent, thereby making the cost of Zaltrap comparable to that of the standard dose of Avastin in CRC and in line with oncologists expectations. It is interesting to observe that if Zaltrap had first gained approval in an oncology indication other than mCRC, it would have been competitively priced with Avastin.

For many oncology drugs dose-reductions during the course of treatment, due to associated adverse events, are common. This can lead to the monthly price of treatment within the same indication varying considerably between patients. On November 29, 2012, Exelixis's oral, small-molecule, multikinase inhibitor, Cometriq, gained FDA approval for thyroid carcinoma. Cometriq is approved at a dose of 140 mg daily, however in the Phase III study leading to its approval in thyroid carcinoma, the dose was reduced in 79 percent of patients.  Interestingly, the following day, November 30, 2012, Exelixis announced that the cost of treatment with Cometriq will be set at a flat rate of $9,900 for a 28-day supply of the drug across all doses used in thyroid carcinoma in addition to other tumor types that the drug may be approved for in the future. Of note, Cometriq is in Phase III development for prostate cancer.  Although the Phase III dose of Cometriq in prostate cancer has not been verified, it highly likely that it will be used at a dose less than that approved for thyroid carcinoma (140 mg/daily) given that it has been used at 60 mg/daily in its Phase II trials for prostate cancer. A flat rate pricing approach for Cometriq ensures Exelixis will gain satisfactory revenue from the drug in prostate cancer should it gain regulatory approval.

Is flat pricing for oncology drugs, which is independent of variations in dosing within indications or across multiple indications, the way forward. Have Exelixis set a precedent for future drug pricing. In the case of Zaltrap in mCRC, Avastin was an obvious benchmark for oncologists to use in terms of pricing, but will oncologists be prepared to make a stand against high prices of future first-in-class emerging therapies without an obvious benchmark or against high-priced therapies that offer significant efficacy improvement over current treatments unlike Zaltrap and Avastin. It is interesting to consider that if a flat pricing rate had been set for Avastin, it is unlikely that Sanofi would have encountered any confusion or backlash. There are other examples of drugs with cost problems that lie ahead; the use of two different dose levels of Bristol-Myers Squibb's Yervoy.  The price of Yervoy has been set for a 3mg/kg dose and the total cost of treatment of $120,000 for metastatic malignant melanoma has already raised eyebrows, yet in the adjuvant setting, where longer treatment durations are likely, it is 10mg/kg that is being studied. We are watching this space and are debating any shortcomings of flat pricing.

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