(Corrects funding source for treatment in 23rd paragraph.)
March 12 (Bloomberg) -- Zhu Guizhen, a Chinese mother of a high school senior, says she was preparing to give up her fight with an aggressive form of breast cancer when she learned of a possible lifeline.
Zhu, 40, heard on the radio a year ago that she could buy Herceptin, an expensive, breakthrough drug shown to improve survival by more than a third, at a 75 percent discount, thanks to a cost-sharing deal between her provincial government and Swiss drugmaker Roche Holding AG. After 11 months of treatment, her cancer has stopped spreading and she’s back hawking children’s wear from a market stall in Jiangsu province’s capital, Nanjing.
“I was so relieved to get the medicine for less money, and even then I had to borrow from family and friends to pay for it,” said Zhu, who earns about 3,000 yuan ($490) a month and said she will pay 32,500 yuan for the full 14-vial course of Herceptin, down from 130,000 yuan before the Jiangsu government’s subsidy kicked in. That’s still more than the average Chinese city-dweller’s disposable income of 26,955 yuan in 2013.
Zhu owes her improved prognosis to a new approach Basel-based Roche is testing in parts of China to make one of its most effective cancer medicines affordable for millions of patients, instead of a handful. The approach isn’t just a boon for patients like Zhu; it may also enable Roche to avoid competition from cheaper, copycat versions governments are seeking to bolster access.
With low- and middle-income nations carrying the greatest cancer burden, governments in developing counties are under increasing pressure to ensure more of their people benefit from lifesaving oncology drugs. In 2012, China accounted for 22 percent of new cancer cases globally and 27 percent of cancer deaths, the International Agency for Research on Cancer in Lyon, France, said last month.
Of all drugs sold globally, those that fight tumors generate the highest sales: $61.6 billion in 2012, according to researcher IMS Health. For many developing countries, the economic costs of cancer treatment threaten to overwhelm health systems and budgets, according to the World Health Organization.
In India, where a person dies from cancer every 50 seconds, the health ministry has sought cheaper versions of Herceptin and at least three other cancer medicines from alternative suppliers. Natco Pharma Ltd., a Hyderabad-based drugmaker, was awarded India’s first so-called compulsory license in March 2012 to make a copy of Nexavar, Bayer AG and Onyx Pharmaceuticals Inc.’s patented treatment for advanced kidney and liver cancer, at a 97 percent discount. That followed similar measures in Thailand.
World Trade Organization rules allow compulsory licenses to improve access in the case of national emergencies. The U.S., European Union and most of those regions’ drugmakers don’t like them. They lose money because they can’t sell the higher-priced versions of the drugs, which are protected by patents.
Roche, the world’s biggest maker of cancer medicines and diagnostic tests, is trying to avoid that. It introduced a lower-cost Herceptin packaged by a local pharmaceutical firm for the Indian market in August 2012, heading off competition from a copycat version slated for release early this year. Roche declined to comment on whether it’s making money on the lower-cost version.
Since August 2011, Roche has donated eight vials of Herceptin to patients in China’s eastern province of Jiangsu once they have bought six vials of the drug. Last year, the Jiangsu government began subsidizing the price the patient pays, picking up three-quarters of the cost.
Herceptin, which targets a certain protein produced in about 20 percent of breast tumors, isn’t yet covered nationally by public health insurance in China. Roche won’t disclose the drug’s cost in China, saying only that the list price is about the same as its wholesale price tag in the U.S., where seven months’ treatment for metastatic breast cancer, like Zhu’s, costs about $36,200, and a year’s treatment for an early-stage tumor costs about $62,500.
The Roche-led subsidies program is bolstering sales in China. One other province besides Jiangsu is subsidizing the cost of Herceptin, Daniel O’Day, Roche’s head of pharmaceuticals, told investors on a Jan. 30 conference call.
The cost-sharing arrangement was partly responsible for a quadrupling in the number of patients on Herceptin in China in 2012, said Daniel Grotzky, a Roche spokesman. The company won’t quantify the number of beneficiaries. Herceptin sales surged about 40 percent in China last year, according to Roche. Worldwide, the medicine generated 6.08 billion Swiss francs ($6.92 billion) in revenue in 2013.
Although patient access programs such as Roche’s can lower the cost of certain treatments, investing in prevention may be more cost-effective for developing countries, said Christopher Wild, director of the International Agency for Research on Cancer.
“I would look at what I could spend on some of the easy prevention strategies, such as reducing smoking, early screening, access to vaccines,” he said. “These are all an order of magnitude less expensive than some of the latest anticancer drugs.”
Roche has sought to tap the Chinese market in partnership with reinsurer Swiss Re by offering private insurance for cancer. It had 20 million clients by the end of last year, far exceeding a target of 12 million enrollments.
Zhang Ya’nan, Zhu’s doctor at the Zhongda Hospital in Nanjing, says about 1 in 10 patients who would be eligible for Herceptin can’t afford it even with the government subsidy.
“They choose chemotherapy because it’s the only economical option for them, and some of them describe the feeling as a pain worse than death,” said Zhang, a doctor since 1984 who says she’s seen the rate of breast cancer double in the past decade.
Zhu, who’s forking out almost the equivalent of a whole year’s income on Herceptin, said she’d rather deplete her savings and borrow money to pay for the treatment than endure the nausea and vomiting from chemotherapy that kept her bedbound for weeks in 2009, when she was first diagnosed with breast cancer.
“I really didn’t want to get back on chemotherapy,” Zhu said over the telephone on Feb. 17. “The treatment has been much easier this time around. I’m not feeling nausea or pain like when I was on chemo.”
There are probably more than 2,000 patients in Jiangsu who could potentially benefit from the Herceptin subsidy, said Luke Miels, Roche’s Shanghai-based head of Asia-Pacific. The province had a population of 79.4 million at the end of 2012, of which about 50 percent were women, according to government statistics. To facilitate access, doctors must understand how to use the medicine and identify the subset of breast cancer sufferers who will benefit from it, he said.
Drugmakers introduced a tiered or differential pricing system for low- and middle-income countries to extend access to antiretroviral medicines for HIV patients. A similar system may be more effective at broadening access to certain cancer medicines, said Felicia Knaul, director of the Harvard Global Equity Initiative, a Boston-based research program aimed at understanding and promoting equitable development.
Knaul herself was treated with Herceptin in Mexico, paid through private insurance. For individuals and families in Mexico without any other form of insurance, the medicine is available free through the nation’s universal health insurance system that her husband Julio Frenk, dean of the Harvard School of Public Health and a former minister of health in Mexico, helped establish.
China sent a delegation to Mexico to study the system in 2006, she said, and now Knaul is leading a project at the Harvard School of Public Health on cancer education in China.
‘Life and Death’
“Maybe Roche’s scheme isn’t the scheme that I would ideally recommend, but this is a drug where finding innovative schemes is key,” said Knaul, who wrote a book about her own experience as a breast cancer patient. “It’s pretty important to try to find some way of getting this drug to women where it really does mean a cure. It’s a difference between life and death.”
Ideally, patients should be able to get access to cancer medicines without giveaways from drugmakers, said Rohit Malpani, director of policy and analysis at Doctors Without Borders.
His Geneva-based group would rather see Roche sign licensing agreements with generic-drug makers to sell a lower-priced version of Herceptin than to become the gatekeeper of affordability through subsidies, Malpani said.
“These are just stopgap measures that are not ensuring that companies are developing sustainable models,” Malpani said in a telephone interview. “This just really isn’t the way for any government or treatment provider to operate effectively.”
For cancer sufferer Zhu, the model has enabled her to continue working 10 hours a day, and is giving her more time to support her 19-year-old son, who will sit for China’s annual university entrance exams in June.
“I have to keep on working,” she says. “I need to pay back what I borrowed, and I want to send my son to a good university to give him a better life.”