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In 2003, Medicaid spent $33.7 billion on drugs (19% of national spending for drugs and more than 10% of the Medicaid budget)Medicaid expenditures ($ billions) for outpatient prescription drugsUS$Spend doubled in 4 years 1998-2002And cancer drugs are a key driver to rising costs
Confirmation in Europe: Cancer drugs budgets are doubling each 4 years Costs of anticancer drugs, France:2004 = 474 Million Euros2008 = 975 Million Euros
Perrin S. Therapeutic decision making in oncology. Hospital Pharmacy Europe. 2010 (Sept/Oct);52:36-37Spend doubled in 4 years 2004-2008
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The world spends more each year for cancer treatmentData: IMSGlobal spend on oncology drugs: projected for 2010-12Spend doubled in 4 years 2004-2008It is a worldwide problem
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Cancer drugs are associated with cancer cures! - Timeline of novel cancer drug approvalCarin A Uyl-de Groot et al. The Economics of Improved Cancer Survival Rates: Better Outcomes, Higher Costs. Expert Rev Pharmacoeconomics Outcomes Res. 2010;10(3):283-292
Association of novel drugs and cancer mortalityCarin A Uyl-de Groot et al. The Economics of Improved Cancer Survival Rates: Better Outcomes, Higher Costs. Expert Rev Pharmacoeconomics Outcomes Res. 2010;10(3):283-292
Cost of cancer drugs by year of approvalLimits on Medicare's Ability to Control Rising Spending on Cancer Drugs
Bach P. N Engl J Med 2009; 360:626-633Cancer drug costs rise 5x faster than other classes of medicineBach P. NEJM. 2009 Feb 7
Cost of treatment for metastatic colon cancer(Schrag D. NEJM. 2004;351:317-319)Cost of standard therapy has risen from $63 / 8 weeks to 30,675 / 8 weeks:500-fold rise in a decade
Planning for the future: what will happen to costs?USA Office of management and Budget. www.whitehouse.gov/ombmedical treatment drives cost inflation far more than the aging populationWhat is the driver for increased spending: ageing populations or medical treatment?
When will the health expenditure inflation bankrupt the US economy?
2% point gap: health care affordable only until 2020; over 75 years, 118.5% of real increase in per capita income devoted to health care (e.g., implausible)
1% point gap: health care is affordable until 2083; 54% of real increase in per capita income goes to health care
Michael E. Chernew, Richard A. Hirth, and David M. Cutler Increased Spending On Health Care: Long-Term Implications for The Nation. Health Affairs,September/October 2009, vol. 28, Number 5, pp. 1253- 1255.
A small effort to control the growth of expenditures NOW can sustain health service development to 2083!Failure to control expenditure now risks collapse within a decade
What are policy-makers trying to do?
What are policy-makers trying to do?Protect and improve the health of the populationAssure access to medical careAchieve efficient use of health care resourcesThey are doing what doctors want to do!
The key to the need to understand economics - Money doesnt always buy lifeLife expectancy at birth and health spendWHO. The World Health Report 20003 fold variation
The key to the need to understand economics - Money doesnt always buy health Relationship between spend and health is not always clear Disability-adjusted life expectancy relative to health expenditure per capita in USD in 191 WHO Member States, 1999WHO. The World Health Report 2000, p43US Dollars>10 fold variation
Cost constraints in cancer treatment:What can nations do?
We must accept that ration will occurRationing occurs either.by societys willingness to payby personal ability to pay
USA - one in five families used up all of their savings paying for cancer treatment
Cavallo J. The ASCO Post, February 15, 2011, Volume 2, Issue 3
European countries - with formal cost-effectiveness approvalAdapted and modified from Zentner et al, 2005societys willingness to pay is crucial to understand when setting priorities for a universal tax-funded or insurance based health serviceThe UK is not alone in wanting to control costs through formal state mechanisms
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