The drugmaker Sanofi is cutting the price of its new colorectal cancer drug Zaltrap in half after physicians balked at the $11,000-a-month price tag.
Sanofi has not released official documentation detailing the specifics of the change, but in recent conversations with oncology experts, company officials laid out a plan to offer a 50% discount to anyone who purchases ziv-aflibercept (Zaltrap) from them on the wholesale market.
Dr. Leonard B. Saltz
The move follows a New York Times op-ed column in which Dr. Leonard B. Saltz, chief of the gastrointestinal oncology service at Memorial Sloan-Kettering Cancer Center (MSKCC) in New York, and two colleagues announced that they would not use Zaltrap because of its high price. He said in an interview that there are some lingering questions about the newly announced price reduction.
Discount vs. Price Reduction
For instance, he expressed concern that the 50% discount given to physicians and hospitals may not translate into a reduction in either Medicare reimbursement or copayments for patients, both of which are tied to the wholesale acquisition cost (WAC) of the drug.
Another problem with offering a discount without changing the official price of the drug is that this could inadvertently create a financial inducement for providers to choose that drug, Dr. Saltz said. If the providers are getting a 50% discount but are still being reimbursed at the full price, they would make a significant profit for using Zaltrap.
Dr. Saltz said he and his colleagues at Memorial Sloan-Kettering raised these issues with Sanofi officials but didn’t get an immediate response.
The Oncology Report contacted Sanofi about the Zaltrap price reduction, but company officials declined to comment.
‘A Good Thing for Patients’
Dr. Roy Beveridge, chief medical officer for the US Oncology Network, supported by McKesson Specialty Health, said in an interview that he’s confident that Sanofi made the price reduction in a way that will benefit patients and payers eventually. And he applauded the company’s unprecedented move to slash the price.
"It’s a good thing for patients," Dr. Beveridge said. "It’s a good thing for the system."
At the 1,000-plus physician US Oncology Network, oncologists consider efficacy, toxicity, and price when making determinations about which drugs are placed on its Level I Pathways. If something is more effective, it’s the first choice on the treatment pathway, Dr. Beveridge said. But if treatments are comparable in terms of efficacy and toxicity, then cost is a major consideration.
"We, as oncologists, recognize that increases of 15% per year are just not sustainable," he said.
With Sanofi’s decision to drop the price, Dr. Beveridge said he thinks more companies will be under pressure not to debut drugs with sky-high prices if they don’t offer significant new benefits.
"For those companies that have true innovative products and have something which is completely different and better, you’ll still see cost pressure going up," he said. "But for those that have results that are more comparable to other treatments, there’s going to be huge price pressure to be equal or lower than others."
Zaltrap Compared With Avastin
In October, Dr. Saltz, along with two other physicians at Memorial Sloan-Kettering, penned the op-ed in the New York Times saying that they had decided not to give Zaltrap to their patients because the drug did not provide greater efficacy than Genentech’s bevacizumab (Avastin), which sells for about $5,000 a month or less than half the cost of Zaltrap.
It was a relatively easy decision to make, said Dr. Saltz, who has been a paid consultant for Genentech and an unpaid consultant to Sanofi this year. They found no evidence that Zaltrap offered any benefit over Avastin, which they could get for about half the price. But Dr. Saltz said there needs to be more discussion in the United States about what to do in those more complicated cases where drugs offer fractionally more benefit at substantially increased prices.
There’s been a sense in the country that everything in health care is so important that it’s wrong to discuss costs, Dr. Saltz said, but that attitude has to change.
"We can’t afford that," he said. "It’s a fantasy and it’s untrue. We can’t just say that because we’re talking about health care, money is no object."