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Paying for cancer drugs based upon their performance

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WESTWOOD, Kan. -- Americans spent more than 40 billion dollars on cancer drugs last year. Some of the most expensive drugs improve survival by only months. Now those who manage drug benefits for insurers and employers are proposing that the price be based on how well the drug works.

Pay for performance. It's how athletes are paid. With a record of 21 and 3 last year, Dodgers pitcher Clayton Kershaw earns the most in baseball, 30 million dollars a year. Now pay for performance could come to the very different arena of cancer treatment. Express Scripts wants pricing for drugs to be based on how well a drug performs.

Consider the drug Abraxane. It costs roughly $25,000 for four months of treatment regardless of the type of cancer it's used for. It's least effective for lung cancer, lengthening life by only a month on average. Insurers could pay the manufacturer less for that use and pay more for its use in advanced breast cancer where it's a little more effective.

"I think we need to look outside the box and think about different options," said Michelle Rockey, coordinator of the KU Cancer Center pharmacy.

She says pay for performance could also extend to patients who would have to pay more out-of-pocket for a drug that research has shown is less effective for their cancer.

"It still may be effective for this patient. We may not know that until we try it. It could deter people from therapy that might be beneficial if they can't afford it, but it also makes that conversation be had - is there something else that might work better?" she said.

Rockey says it's an important conversation that cancer patients should have with their care providers.

Some drug companies say they are looking into pricing based upon the value of medicines for different indications.