Oral Chemotherapy for Colorectal Cancer: Some Economic Considerations

Oral Chemotherapy for Colorectal Cancer: Some Economic Considerations

ABSTRACT: In the formal medical curriculum, little has been provided to prepare the clinician for an understanding of the economics of health care. The questions are often far more complicated than they initially appear to be, and the techniques and terminology used in evaluation of these questions are often foreign to many health-care providers. This brief essay, written by an author who confesses to being an economic layman, will attempt to discuss and clarify some terms and techniques used in the economic analysis of health care. In that context, and recognizing the limitations of the techniques available, an attempt will be made to address the question of the economic impact of oral fluorinated pyrimidines on the management of colorectal cancer. [ONCOLOGY 15(Suppl 2):29-32, 2001]


One recent trend in the development of cancer chemotherapy
is a move toward oral administration. Many factors are driving this. Some of
these are realistic and practical, while others appear to be less so. Economic
considerations are often cited as a reason to pursue development of oral
anticancer agents. This implies that overall financial costs of treatment will
be lower if parenteral administration can be avoided. Few if any studies,
however, have systematically evaluated the financial impact of oral
chemotherapy. As such, there are very few data to evaluate, and this discussion
of economic considerations is necessarily general and exploratory in nature.

So What Does It Cost?

The economic impact of a particular chemotherapy will vary
depending upon whether it is viewed from the perspective of the patient, the
doctor, the insurer, or the pharmaceutical manufacturer. In attempting to
understand these costs, it may be useful to step back and define some terms.
When we look at costs, we have to consider the direct medical costs, the direct
nonmedical costs, and the indirect costs of an individual therapy (Table

Direct Costs: Direct costs refer to money spent directly on
medical care. When we talk about the direct cost of chemotherapy, we are talking
about far more than just the cost of the actual drug. There are costs involved
in the facilities and equipment used to administer the drugs. We need tubing, we
need needles, and we need infusion bags. We need a chair for the patient to sit
in and we need a place to put that chair. There are real estate costs for the
square footage that is needed for chemotherapy storage, preparation, and
administration, whether it is in a doctor’s office or hospital or clinic.
Then, there are labor costs (physicians, nurses, technicians, secretaries,
support staff, facility maintenance, etc.). There are also nursing costs
involved in the follow-up of the patients, and so on. These are the direct costs
of chemotherapy. In our current environment, most of these direct costs for
chemotherapy are largely borne by third-party payers.

 Indirect Costs: Indirect costs of chemotherapy are much more
difficult to identify. An example would be the costs incurred because the
patient does not have the same earning potential that he or she once did. In
addition, their caregivers must expend considerable time and effort in bringing
them for chemotherapy treatments and other medical interventions, and so the
family caregivers encounter lost wages as well. These costs are absorbed largely
by the patient and by society in terms of the lost productivity of the patient.
These indirect costs, while potentially quite substantial, are rarely taken into
account from the physician or third-party payer’s point of view, yet they may
be of paramount importance to the patient.

Nonmedical Direct Costs: Nonmedical direct costs are the
costs that the patient directly incurs as a result of the treatment, but are not
directly due to the treatment itself. These include the costs of transportation,
parking, childcare, and meals while making these trips for treatment, etc. Such
costs are directly related to the length and number of office or hospital
visits. They are difficult to quantitate, and are largely absorbed by the
patient. They also do not figure into most economic analyses, yet from a patient’s
point of view, they may be an enormous burden.

Estimating the Cost of Chemotherapy for Colon Cancer

For the purposes of this discussion, the direct medical costs of
parenteral vs oral treatment will be considered. Drug prices used in this
estimation are the currently published average wholesale price (AWP). These may
not necessarily reflect actual prices paid, but serve as a useful approximation
for comparison purposes.

For parenteral 5-fluorouracil (5-FU), a 5,000-mg vial sells for
$28.70. The AWP for leucovorin is $85.75 for 350 mg, which translates to
approximately $0.245 per mg. For the purposes of this analysis, let’s look at
a hypothetical patient who has a body-surface area of 2 square meters (2.0 m2).
Using the Roswell Park schedule of weekly 5-FU at 500 mg/m2 and leucovorin at
500 mg/m2 for 6 weeks followed by a 2-week rest, the drug costs (rounded to the
nearest dollar) over an 8-week cycle will be $34 for the fluorouracil and $1,470
for the leuco-vorin (500 mg/m2 ´ 2.0
m2 ´ $0.245/mg ´
6 doses = $1,470).
(This is assuming a large practice with bulk usage of leucovorin; otherwise, the
actual leucovorin cost will be the cost of three vials, or $257 per week, or
$1,542 per cycle). Thus, in this hypothetical case, the total chemotherapy cost
for 5-FU plus leucovorin works out to $1,504 for the 8-week cycle.

If the leucovorin dose is reduced to 20 mg/m2/week, then the
leucovorin dose works out to $10 per dose, or $60 per 8-week cycle. If we choose
instead to skip the leucovorin and use a protracted infusion of 300 mg/m2 of
5-FU daily, over the same 8-week period, the drug cost would be $193.

Recall, however, that, as we discussed, the direct costs include
more than drugs alone (not to mention that there are other drugs, such as
antiemetics, to be considered). The costs of drug administration vary
considerably, but the Medicare-allowable drug administration charges can serve
as a useful barometer for comparisons.
For example, if 5-FU is given by a brief (< 1 hour) infusion, as is typical
for lower doses of leucovorin, then the allowable charge is $82.51 (CPT code
96410, chemoinfusion, first hour). If the leucovorin is given over 2 hours, as
is done in some centers with the
500 mg/m2 dose, then the charge increases to $144.60 per week, or $867.60 over
the 8-week cycle.

Rental charges for ambulatory pumps or cost of disposable ones
vary considerably, but usually bring the cost of protracted 5-FU chemotherapy to
the range between the high-dose and low-dose leucovorin regimens.

Costs of Oral Fluorinated Pyrimidine Therapy

At the time of this writing, capecitabine (Xeloda) is the only
oral fluorinated pyrimidine on the market in the United States, so it is the
only one for which we have any actual cost data. The AWP of a 500-mg tablet of
capecitabine is $6.40. Using our hypothetical 2.0 m2 patient, and the
recommended dose of 2,500 mg/m2/day for 14 days followed by a 7-day rest, the
cost of drug for a 3-week cycle would be $64 per day ´
14 days of treatment =
$896. Factoring this out over an 8-week period to permit comparisons with the
5-FU regimens above, the drug cost of 8 weeks of capecitabine would average out
to $2,389.

Professional Costs: Professional costs are a bit harder to
anticipate, since so many variables are unknown. How often will doctors’
visits be required and how often will nursing interventions be needed? It is
clear that oral chemotherapy is complex enough that patients will require
considerable education and guidance. This takes professional time, and that
costs money. Largely unresolved is the question of how much intervention doctors
will think is needed, and what portion of that will third-party payers be
willing to reimburse.

If oral agents turn out to require fewer medical office visits
and interventions than when parenteral agents are used, then these expenses will
drop, but it is far from clear that such a decrease in the need for medical
interventions can be expected. More real-world experience with the use of oral
fluorinated pyrimidines in clinical practice will be needed to better quantitate
the need for doctor and nurse interventions when these oral agents are employed
instead of parenteral administration.

 Oral vs Parenteral Drugs: Drug costs alone for capecitabine
(the only oral fluorinated pyrimidine on the market in the United States at the
time of this writing) are higher than for 5-FU. However, some high-dose
leucovorin regimens have drug costs that equal or exceed the costs of
capecitabine. Administration costs and equipment associated with protracted
venous infusion also appear to bring the drug and supply costs to a range
comparable to that of the oral agent. A full pharmacoeconomic analysis, however,
would have to consider all the other direct medical costs discussed previously.
In addition to these direct medical costs, the direct nonmedical costs and the
indirect costs, which are very difficult to calculate, would need to be
considered. Furthermore, the anticipated cost of follow-up care would need to be
assessed, because the various toxicities and other disease-related events would
need to be taken into account.

A full outcomes analysis, therefore, would require consideration
of all of these economic factors: the full cost of administration, management,
value of benefits in terms of productivity, as well as the clinical outcomes and
the humanistic outcomes. To make it even more complicated, there is tremendous
variability in reimbursement, which makes identification of the final costs very


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