Medicare will pay for Avastin, Provenge -- and try to dodge the piper

Medicare is hemorrhaging money. And yet in the last few days, the program has decided to cover two mega-pricey medications with questionable benefits: Avastin for advanced breast cancer and Provenge for advanced prostate cancer.

And those are just two examples. The roster of Medicare-covered drugs includes many treatments with big price tags but meager payoffs.

Footing the bill for these drugs might seem like the compassionate thing to do. After all, not many patients could afford the roughly $100,000 for a year’s worth of Avastin or the $93,000 for a full course of Provenge. Those are prices you’d expect to see in a super-high-end luxury car showroom, not a hospital pharmacy.

But this particular form of compassion doesn’t greatly improve people’s lives. While Avastin might help lengthen the lives of a few women with breast cancer, the benefit is so small and so rare that it has yet to show up in a single large-scale study, which is why an FDA panel recently ruled to disapprove the drug as a treatment for breast cancer. Provenge does somewhat better; studies have found that the drug can lengthen a patient’s life by about four months. That works out to about $18,600 for each extra month.

Of course, it’s impossible to put a price tag on a person’s survival. For men with advanced prostate cancer, each bonus month might truly be worth $18,600. But at a time of soaring healthcare costs, the government will eventually have to take a hard look at all of the big-ticket drugs that it currently covers.

According to its guidelines, Medicare will only cover drugs if “they are reasonable and necessary for the diagnosis or treatment of the illness or injury for which they are administered according to accepted standards of medical practice.” Of note, another stipulation is that the drugs cannot “have been determined by the FDA to be less than effective.” In the case of Avastin, Medicare seems to be breaking its own rules.

The guidelines say nothing about weighing costs and benefits. But as labs churn out more sophisticated drugs at great expense, the balance seems to often tip in a troubling direction. As reported in the Journal of the National Cancer Institute in 2009, more than 90% of the cancer drugs approved by the FDA in the previous four years cost more than $20,000 for each 12-week course of treatment.

Consider Erbitux, a genetically engineered treatment for colorectal and lung cancer that’s also covered by Medicare. A 2009 study found that adding the drug to standard chemotherapy extended the lives of patients with non-small-cell lung cancer by about five weeks.

A course of the drug costs about $80,000. That’s more than $2,200 for every extra day of life.

Another study published in the Lancet on June 18 found that adding the drug to a common chemotherapy treatment didn’t seem to extend the lives of patients with advanced colorectal cancer. For these patients, that money doesn’t seem to buy much at all.

A few extra days or months may be priceless for a person with a terminal disease. But even priceless things have a cost.