Cancer's Cruel Economics

Editor's note: For a CBS Evening News report on the challenges confronting new cancer drug approvals, which was made in collaboration with BusinessWeek, click here.

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.

Death and Disappointment

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.

There are many plausible reasons for so much disappointment, not least the complexity of the disease. But more and more researchers, companies, and patients lay part of the blame on the FDA. They complain that the agency is using outmoded and overly rigorous methods for evaluating a new generation of cancer treatments, rather than doing everything possible to get better drugs to sick patients.

The Vioxx Effect

Since 2005 the FDA has approved 18 new cancer drugs, many of them breakthrough products. But the pipeline contains hundreds more that will never get to market because corporate developers aren't able, or willing, to come up with the money, time, and patients necessary to establish acceptable data. A Tufts University review found that only 8% of experimental cancer drugs end up receiving FDA approval, compared with 20% of medicines for all other diseases.

The FDA knows there's a problem. In 2004 it announced with much fanfare an effort, dubbed the Critical Path Initiative, to make clinical trials more productive. But the initiative never got much funding and little has been heard since. Outside the agency, academic and industry researchers who come up with creative ideas for evaluating drugs routinely complain that the FDA is too conservative to embrace new methods.

The agency's caution may be prudent. But its critics say regulators are too wary of congressional scrutiny in the wake of the debacle involving Merck's (MRK) painkiller Vioxx. Ever since that drug was pulled off the market in 2004 amid safety concerns, the FDA has come under withering attacks in Washington, and overall drug approvals have plummeted. "It's always far easier to say no to a drug than yes,"says Dr. David Kessler, director of the FDA from 1990-97 and now a professor at University of California at San Francisco. "But there are times when the public interest requires that the agency step out of its role solely as a policeman and put into practice those things that might advance the public health."

Kessler believes the agency should overhaul its methods for reviewing cancer drugs much as it did in the late 1980s and 1990s for AIDS drugs. Protease inhibitors and other breakthrough treatments were rushed through the approval process under a new expedited review process put in place to improve patients' access to potentially life-saving medicine. We ended up with a class of drugs that changed the face of the disease," says Kessler. "Even I was struck by how fast it happened, and I was living it."

Kessler and others want a similar push for new cancer drugs, one that would include major changes in human testing. The clinical trial process now is a three-part, years-long effort that effectively kills off all but a handful of once-promising drugs. Medical journals and conferences regularly report on alternative approaches, such as altering a trial's criteria once the first results are in, using mathematical models to predict safety and efficacy, and setting targets that take months to reach instead of years. Pharmaceutical companies would especially like to be able to break down drug-trial results into subsets of participants, so they can establish which groups responded best.

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