Cancer Drug Waste Costs $3 Billion Per Year

“One size fits all” cancer drug vials have resulted in Medicare and private health insurers wasting nearly $3 billion every year, according to a study published in BMJ.

Many cancer drugs come in packaging that contains more quantity than necessary for treatment. Most patient’s body sizes do not match the quantity of the drug in the vial, resulting in leftovers being discarded, the study found.

If drug manufacturers made smaller quantities of drug vials, it could help cut down on medication spending waste, the researchers noted.

“Drug companies are quietly making billions forcing little old ladies to buy enough medicine to treat football players, and regulators have completely missed it,” study co-author Peter B. Bach told the New York Times. “If we’re ever going to start saving money in health care, this is an obvious place to cut.”

The researchers evaluated 20 cancer drugs that are dosed according to body size and packaged in single dose vials.

The results of the study estimated that total US revenue in 2016 from these drugs was $18 billion. Approximately $1.8 billion, or 10%, were discarded drugs.

The quantity of drugs left over varied from 1% to 33%. Although some of the percentages are small, it can still lead to large costs.

Data in the October 2015 Medicare Average Sales Price files shows that 1 dose of ipilumumab could cost $29,000. The “small” 7% that’s left over would generate an additional $2000 in revenue for each vial.

By increasing the amount of drugs sold per treated patients, it can increase doctor and hospital profits as well. The system nicknamed “buy and bill” allows doctors and hospitals to buy single dose vials and bill insurers or patients when used. This bill includes a percentage base markup that can vary, but even low percentages can result in large sums of money, since most drugs can cost thousands per vial.

The analysis showed that approximately $1 billion was spent on markups to hospitals and doctors.

The study reports that Velcade, which is used for the treatment of lymphoma and multiple myeloma, is only sold in 3.5 milligram vials that cost $1,034 each. This vial holds enough medicine to treat a person weighing 250 pound and stands at 6 feet 6 inches tall. The leftover vial is thrown away for anyone smaller.

Currently Velcade is sold in 1 milligram and 3.5 milligram vials in Britain. If the United States were to offer another vial size of 0.25 milligrams, it could significantly reduce waste by 84% and reduce Velcade’s sales in the United States by $261 million a year.

“You have these incredibly expensive drugs, and you can only buy them in bulk,” study co-author Leonard Saltz told the Times. “What’s really interesting is they’re selling these drugs in smaller vials in Europe, where regulators are clearly paying attention to this issue.”

Although nurses can use leftover drugs on other patients, it can only be used within 6 hours and in specialized pharmacies.

The FDA believes that the excess medicine does not pose an issue unless it leads to medication errors or safety issues, because of multiple dosing, according to the study.

The skyrocketing drug prices continue to raise concerns, with the average annual price of $190,217 for the last 10 approved cancer drugs before July 2015.

The industry has argued that the high cost of cancer drugs is necessary for funding research, but The New York Times found that Pfizer and Merck financial statements show that 17% of revenues were spent on finding new drugs, while a much greater amount goes to marketing and profits.