Costs of Immunotherapies Continue Debate

The FDA approved nivolumab for patients with advanced melanoma in December 2014, joining 6 other melanoma treatments approved in the past 3 years, including monoclonal antibodies pembrolizumab and ipilimumab.

Hagop Kantarjian, MD

High Costs and High Expectations

The US Food and Drug Administration approved nivolumab for patients with advanced melanoma in December 2014, joining 6 other melanoma treatments approved in the past 3 years, including monoclonal antibodies pembrolizumab and ipilimumab.1Although these new treatments could radically change the oncology market, the question remains whether immunotherapies will ultimately decrease or increase the cost of treating cancer.Ipilimumab at a cost of $150,000 per course, was approved in 2010 as a second-line therapy for patients who have tried vemurafenib (a BRAF inhibitor for patients withBRAFV600mutations), which costs $13,000 per month.2

Citigroup analyst Andrew Baum expects immunotherapy revenues to reach $35 billion within 10 years, envisioning the transformation of some cancers into chronic conditions.3A dozen new oncology treatments approved in 2012 were priced above $100,000 for 1 year of treatment.4

Hagop Kantarjian, MD, of the department of leukemia at the University of Texas MD Anderson Cancer Center in Houston, protests the high cost of the newest generation of cancer drugs. In May 2013, he and 120 doctors and researchers published a commentary in the journalBlood, calling for lower drug prices; the following year he was lead author on the paper “High Cancer Drug Prices in the United States: Reasons and Proposed Solutions,” published in theJournal of Oncology Practice.

“It is our obligation as cancer doctors to keep patients from ‘harm and injustice.’ If high prices make drugs unaffordable and inaccessible, thus causing harm, then we should do something,” contends Kantarjian.4

What Is It Worth?

What is a fair price for a cancer drug? A price that would maintain reasonable profits to drug companies, but remain affordable to patients and to the health care system, according to Kantarjian and colleagues.4Price should also reflect the benefit to patients.Recognizing that putting a dollar value on human life is difficult, and that the figures are debatable, some experts quote the price of 1 year of extended life to be $50,000 to $60,000.5For example, if a drug improves life duration by 50% to 90% over life expectancy or by 6 to 11 months, it might be priced at $30,000 to $50,000.

James Kahn, MD, MPH, a professor in the department of epidemiology and biostatistics, school of medicine, at the University of California San Francisco, headed a team to analyze treatment strategies forBRAF-mutated metastatic melanoma in terms of cost-effectiveness and quality-adjusted life years (QALYs).

The team compared 3 treatment strategies: dacarbazine, vemurafenib alone, and vemurafenib followed by ipilimumab. Dacarbazine was the standard of care until 2010 with a median overall survival of 5.6 to 7.8 months. Results showed that:

  • Dacarbazine had a QALY of 0.3 at a cost of $8,391.
  • Vemurafenib had a QALY of 0.72 at a cost of $156,831.
  • Vemurafenib + ipilimumab had a QALY of 1.34 at a cost of $254,695.

As high-cost treatments become standard practice and the proportion of health care resources allocated to these treatments grows, cost-effectiveness of the treatments will need to be transparent to decision-makers.2

Not all cancer drugs are alike, and those with incremental, marginal value will not command high prices. Expert panels organized by the American Society of Clinical Oncology (ASCO) have convened to assess value based on a drug’s comparative effectiveness against prevailing therapies, toxicity, and cost.

Richard Schilsky, MD, ASCO’s chief medical officer, explains “ASCO is not so much in a position to enforce rules, but we can recommend that an assessment process be used, either with physicians as they select therapies or by payers when they are evaluating whether to cover a therapy.”

The long-term value of individual immunotherapies remains to be seen. “The concept of value-based insurance dictates that if something is proven useful, offering a substantial improvement, then it should be well reimbursed with minimal to no copays,” Schilsky said. “If another therapy is developed that is marginally beneficial, doesn’t produce major improvement, or is associated with significant toxicity, then it may obtain regulatory approval but reimbursement may be at a lower level or may have a higher copay.”6


  1. Medscape. FDA Approves Nivolumab (Opdivo) for Advanced Melanoma. Accessed December 29, 2014.
  2. Curl P, Vujic I, van 't Veer LJ, et al. Cost-effectiveness of treatment strategies for BRAF-mutated metastatic melanoma.PLoS One. 2014;9(9):e107255.
  3. Ward, Andrew. Financial Times. Drug Development: Big Pharma Back in the Game It Made. Accessed December 29, 2014.
  4. Kantarjian H, Steensma D, Rius Sanjuan J, et al. High cancer drug prices in the United States: reasons and proposed solutions.J Oncol Pract. 2014;10(4):e208-211.
  5. Braithwaite RS, Meltzer DO, King JT Jr, et al. What does the value of modern medicine say about the $50,000 per quality-adjusted life-year decision rule?Med Care. 2008;46(4):349-356.
  6. Carroll J. New immunotherapies for cancer yield exciting results but high cost.Manag Care. 2013;22(10):54-56.