Attack of the acronyms: PCORI and IPAB may doom new treatments

The battle against skin cancer just became a bit more complicated.

Researchers found that Zelboraf — a promising new drug that attacks advanced-stage metastatic melanoma — may speed the development of a different but more easily treatable form of cancer. And then, there are the cost considerations. The drug lengthens patients’ lives — but also carries a hefty price tag.

These complex factors underscore the importance of leaving treatment decisions to patients and doctors — not to distant government bureaucrats, as President Obama’s health reform law intends.

First, the good news. Last year, a study published in the New England Journal of Medicine revealed that patients treated with Zelboraf posted a 20-percent improvement in six-month survival rates compared to patients on alternate drugs — and a 63-percent reduction in the relative risk of death.

That’s a massive improvement. And it’s why some medical experts believe that Zelboraf could represent a breakthrough in the treatment of melanoma — the deadliest form of skin cancer.

Based mostly on these initial test results, the federal Food and Drug Administration approved the drug for patient use in August 2011.

But just this month, the same New England Journal published work showing that Zelboraf might stimulate the development of squamous cell carcinoma — a comparatively less serious form of skin cancer. To compensate for this unintended side effect, patients may need to take Zelboraf in conjunction with other drugs.

Researchers have also found that metastatic melanomas tend to become resistant to Zelboraf after the initial treatment.

So the drug is not a cure. But it prolongs life — albeit at a cost of nearly $60,000 for six months of treatment.

With the verdict on the drug positive but not unequivocally so, some observers have wondered whether Medicare’s prescription drug plans will cover it — and how private insurers will react.

President Obama’s health reform law doesn’t offer much encouragement, for two primary reasons: its Independent Payment Advisory Board (IPAB) and Patient-Centered Outcomes Research Institute (PCORI).

Comprised of 15 healthcare experts that have yet to be appointed by the president, IPAB is charged with finding ways to reduce cost growth in Medicare starting in 2013.

IPAB will set target growth rates for Medicare. If spending on the entitlement exceeds those rates, then the panel will make cost-cutting recommendations.

The Board’s options are limited. It cannot hike taxes, reduce benefits, or raise the retirement age. But it can recommend slashing payments to providers like doctors, hospitals and pharmaceutical firms.

PCORI, meanwhile, will sponsor research aimed at determining the relative effectiveness of various treatments.

The Institute is ostensibly prohibited from considering cost in its evaluations. But with the government footing the bill for the research — and crumbling under the weight of health costs — PCORI’s researchers could feel pressured to find that expensive medicines aren’t worth the money.

Experimental new treatments like Zelboraf that may represent radical breakthroughs — but are also pricey — could be among the first targets identified by IPAB and PCORI for cost-cutting.

If the two groups decide that a therapy isn’t worth the expense, then Medicare will likely stop covering it. Most enrollees won’t have the means to pay for it on their own. So the treatment will effectively cease to be an option for them.

Private insurers typically take their coverage cues from public programs. If Medicare and Medicaid stop reimbursing for a drug like Zelboraf, private insurers are likely to follow suit and thereby leave even more patients without access to advanced medicines.

Further, many new treatments build on the successes — and shortcomings — of earlier ones. So if drugs like Zelboraf vanish from the marketplace, then scientists may struggle to make the incremental research progress needed to produce a better treatment.

Zelboraf could cost a late-stage melanoma patient tens of thousands of dollars — but also give him an additional six months of life. That added time may not sound like much to a healthy person. But it’s effectively double what someone can expect to live without the drug.

Zelboraf’s story raises an important question, particularly as doctors, patients, and policymakers try to get a grip on healthcare costs — who should pay for expensive treatments?

The private market is already finding ways to get patients, particularly low-income ones, the medicines they need at prices affordable to them.

There’s the Partnership for Prescription Assistance, which is sponsored by the pharmaceutical industry and more than 1,300 other national, state, and local organizations. Many individual firms — including those that make medicines that cost tens of thousands of dollars — are giving away billions of dollars’ worth of medicine to needy patients through foundations of their own.

And as medical science advances and new therapies are invented, today’s expensive drugs will eventually become tomorrow’s affordable ones.

Expensive yet revolutionary drugs like Zelboraf raise some important  questions. The American people will have to make clear that they’d prefer to answer those questions themselves — free of government interference.

Sally C. Pipes is President, CEO, and Taube Fellow in Health Care Studies at the Pacific Research Institute. Her latest book is The Pipes Plan: The Top Ten Ways to Dismantle and Replace Obamacare (Regnery 2012).