Cancer’s Cruel Economics

Billions of dollars are spent developing cancer drugs, but precious few get approved. Is the FDA part of the problem?

by Catherine Arnst

Dr. Oleg Loran treats kidney cancer, but he doesn’t have much to offer his patients. They have a 60% chance of surviving five years if the disease is caught early, but more than a third are diagnosed after the cancer is well advanced, when their chances of reaching the five-year mark drop as low as 11%. So Loran was relieved in April when a radically new treatment for kidney cancer was approved. Oncophage, developed by Manhattan-based startup Antigenics (AGEN), is a vaccine that recruits the patient’s immune system to fight off cancer cells. It may keep the cancer from recurring for up to two years. "This is undoubtedly a major victory," says Loran.

Perhaps, but not for Americans. Dr. Loran practices in Moscow, and Russia is the only country that has approved Oncophage. The data was not conclusive enough to convince the U.S. Food & Drug Administration; Antigenics will have to mount another clinical trial before the agency will consider approving it for stateside applications. Such a trial would likely take 8 to 10 years and cost at least $500 million, well beyond the means of Antigenics, which has no other products and a stock trading at just over $2 a share. And that, in a nutshell, illustrates the quandary of cancer drug development.

The U.S. government has doled out more than $75 billion for oncology research since President Nixon declared his War on Cancer in 1971. Outlays by the pharmaceutical industry have been far greater. Yet the death rate from cancer has dropped only about 7% in the past three decades, with most of the progress in the last few years. The disease continues to strike 1 in 3 Americans, and it kills 1 in 4. That averages out to 1,500 deaths every day, at an annual cost to the nation of $210 billion and climbing. Cancer is expected to become the nation’s biggest killer within a decade, surpassing heart disease…

Only the Sickest Patients

Not all patients agree that Pazdur [head of the FDA’s cancer drug division] has their best interests at heart. Some advocacy groups, angry at the lack of new cancer drugs, went all the way to the U.S. Supreme Court last year in an attempt to force the FDA to let people buy almost any experimental cancer drug being tested in humans. The Court refused to hear their appeal, but the groups haven’t relented. On May 30, the FDA will face a nationwide protest led by CareToLive, a nonprofit advocacy group angered by the agency’s rejection last year of Provenge, a controversial prostate cancer vaccine made by Dendreon (DNDN). It would have been the first new drug for prostate cancer in 20 years, and an outside panel of cancer experts chosen by the FDA recommended approval, but the agency asked for another clinical trial.