to all,
looks like this is the reason for the slide, sure hope they will the marketing campaign.
gw
interactive.wsj.com
A New Pap Test Will Cost More,
But Some Question if It's Worth It
By LAURA JOHANNES
Staff Reporter of THE WALL STREET JOURNAL
Is an improved Pap test worth an extra $15? That depends on whom you
ask.
For two years, Cytyc Corp. salesman Craig Sands tried to persuade the
country's largest medical insurer to cover his company's new high-tech test
to screen women for cervical cancer.
Last spring, Mr. Sands met yet again with Arnold W. Cohen, Aetna/U.S.
Health Care's medical director for women's health. This time, highlighted in
yellow in the research paper he handed to Dr. Cohen, was this: Cytyc's
test, ThinPrep, detected 55% more "high-grade" -- or serious --
precancerous lesions than the traditional Pap test.
The doctor remained unswayed. The study was "too small a sample," he
says, to convince him the test was worth the price. ThinPrep, which relies
on a new method of sample taking and preparation, costs $15 to $20
more than the standard Pap. "There are 50 million Pap smears done a
year," Dr. Cohen says. "So we're talking about a billion additional dollars
for a technology that has yet to be proven to improve people's lives."
Early Promise
Cytyc's future looked promising in May 1996, when the test got U.S.
Food and Drug Administration approval. Six months later, the FDA
deemed it "significantly more effective" than the ubiquitous standard Pap
test, invented by George Papanicolaou and essentially unchanged since its
introduction 50 years ago.
But Cytyc is finding that concerns over cost and efficacy have colored
views of what constitutes a major medical advance. After more than two
years on the market, and despite early optimism, Cytyc's test accounts for
only 5% of the Pap smears being done in the U.S. And although the FDA
and many specialists regard ThinPrep as a significant improvement in early
cancer screening, most health insurers do not.
Only about 12% of the nation's insurers are willing to pay at least $15
extra for the test, says Cytyc's Chief Executive Patrick J. Sullivan. Insurers
-- and ThinPrep competitors -- have raised basic questions about how
much more effective the test is in the first place. One
insurance-company-funded analysis on ThinPrep uses an increasingly
common methodology: calculating how much it costs per year of life
saved. Its author, Stanford University economist Alan Garber, says annual
use of ThinPrep would cost more than $300,000 -- borne mostly by
insurers -- for every year it prolongs a woman's life, compared with
$27,000 per year saved with a conventional Pap test.
'Incremental Technologies'
"We have many incremental technologies coming along that give small
benefits and are very expensive," Dr. Garber says. "It's not going to be
feasible in the long term to say 'yes' to everything that may be better and
ignore the costs."
This stance was recently bolstered by the American College of
Obstetricians and Gynecologists. The influential doctors' group
acknowledged that ThinPrep finds more potentially precancerous
abnormalities, but declined to recommend it as a standard of care, citing
high costs and noting that clinical trials haven't proven that the earlier
detection actually saves lives.
Proving this is a tall order. Cervical cancer grows slowly, often taking 10
years or more from the first signs to the invasive stage. So even if a woman
gets one faulty Pap reading, her diseased cells will likely be detected in
time to save her life if she returns the next year for screening. ThinPrep
hasn't been proven any better than the standard Pap in detecting full-blown
cancer.
Many insurers say they are better off spending their limited dollars on
reminding women to get the standard low-tech test regularly. Cytyc
charges laboratories $9.75 for each kit, plus $40,000 for the machine to
process it. The company says it's worth the money, as early detection
allows women to get treatments that are less invasive and less expensive.
Opposing Efforts
Thus Cytyc, which has yet to turn a profit, has waged a major lobbying
and public-relations effort in support of its main product, to try and win
over doctors, insurers, legislators and women's groups. It has funded
research that duels with research critical of ThinPrep. Meanwhile,
competitors, struggling for the same scarce insurance dollars, are trying to
get the test's FDA approval revoked.
The conventional Pap -- in which physicians smear a sample scraped from
the cervix onto a slide, then spray a fixative on it -- has dramatically
reduced the incidence of cervical cancer, which now kills about 5,000
women a year. It is one of the most common screening tests for women.
But by varied estimates, 15% to 40% of women with cellular abnormalities
test normal. In a 1995 study, Yale University researchers estimated that of
a large sample of cervical-cancer cases they studied, 21% occurred in
women whose slides had been misread.
With Cytyc's test, the cervical sample is taken with a spatula that is then
immersed in a vial of preservative fluid -- assuring that no cells are lost --
as some are when the spatula is thrown out in a standard Pap. The vial is
sent to a laboratory, where a machine removes blood and mucus and
spreads the cells evenly onto a slide. Many technicians find it easier to
read than a regular Pap, which is often cluttered by debris.
'The Ones You Don't Want to Miss'
When the FDA approved ThinPrep, Cytyc stock more than doubled to
$33.75 a share, giving the company a value of $459 million. Cytyc hired a
sales force of 30 to call on doctors, and got support from prominent
opinion leaders such as Columbia University pathologist Ralph Richart. Dr.
Richart, initially skeptical, says he changed his mind after seeing evidence
that the test found more high-grade abnormalities. "Those are the ones you
really don't want to miss because they are likely to become cancer," he
says.
The first inklings of how tough the sales job would be came in September
1996, four months after FDA approval. Mr. Sands, medical director
James Linder and two other company officials went to see Dr. Cohen in
Blue Bell, Pa., armed with a slick poster presentation to convince the
insurer not only to convert to ThinPrep, but also to feature it in ads aimed
at women.
A few minutes into the meeting, the Cytyc team realized it was in trouble.
Dr. Cohen wasn't impressed that Cytyc's test detected 19% more
abnormalities than the standard Pap. Dr. Cohen saw Cytyc's advantage in
its capacity to discern "low-grade" problems, which often disappear
without treatment, Mr. Sands said. "He basically came out and said 'I
don't care about the results of low-grade. You've got no cancers here, and
I don't see how this is going to save a woman's life and it's going to cost
me $40 million. Thank you very much, goodbye,' " Mr. Sands says.
This was before the later study homed in on ThinPrep's ability to detect
high-grade precancerous lesions. (Dr. Cohen maintains that study isn't
convincing and says he is focusing his limited funds on a letter campaign
reminding women to get regular Paps. That campaign has increased
compliance 16% this year, he says.)
In the same period, a Cytyc-funded study by Quintiles Transnational
Corp., a research firm, concluded that ThinPrep will save money by
detecting abnormalities earlier and by reducing the number of unreadable
tests, which must be redone.
FDA Boost
Cytyc then got a big boost when the FDA gave the company the right to
call its test "significantly more effective" in detecting precancerous
abnormalities. United HealthCare Corp., the nation's second-largest
insurer, decided to cover it, and by Nov. 21, 1996, Cytyc stock rose to
$28 a share, from $12 earlier that month, when the stock was down from
its May high, largely on profit-taking by original investors.
But in March 1997, a negative "Physician's Alert" was sent to
gynecologists across Ohio by medical-malpractice underwriter P.I.E.
Mutual Insurance Co., Cleveland. The report warned that government
regulations allow technicians to read twice as many ThinPrep slides daily
as standard Paps and pointed out that human error from overquick
readings had been one cause of undetected cancers in the past. "While the
ThinPrep process may increase laboratory productivity," the report
concluded, "it may do so at the cost of patient harm and at the cost of
increased liability."
P.I.E. retracted its comments in an April 11 press release. P.I.E., which
Cytyc sued for defamation in U.S. District Court in Cleveland, says it
stands by the truth of the original report and only retracted it in an attempt
to avoid litigation. The lawsuit is pending, as is a separate suit in U.S.
District Court in White Plains, N.Y., against competitor Neuromedical
Systems Inc., and its then chief executive, Mark Rutenberg. Cytyc alleges
that the report was prepared with help from Neuromedical, which sells a
computer rescreening service called PapNet.
Mr. Rutenberg says he did meet with the report's author, P.I.E. medical
director Richard Ludgin, prior to preparation of the report, but that the
doctor "did his own investigation" of the competitor's flaws. He says he
initially met with Dr. Ludgin prior to publication of the report to discuss
PapNet's potential role in lessening malpractice risks. Subsequently, Mr.
Rutenberg says, the doctor called him with questions about competitor
ThinPrep, "and I referred him to certain papers written about Cytyc's
technology." Dr. Ludgin, named in the Ohio suit, stands by the report, his
attorney says.
In July last year, seven petitions, largely from people with links to Cytyc
competitors, were filed asking the FDA to review its decision to approve
ThinPrep. The FDA is still considering the petitions, which came at a
critical time for Cytyc in Washington. There, Medicare officials were
deciding whether to cover ThinPrep. Cytyc's Mr. Sullivan traveled
regularly to the capital, asking key health-care staffers to support
Medicare reimbursement. Lobbyist Mimi Mager helped get women's
groups to write letters supporting coverage.
Meanwhile, in the Northeast, where new medical techniques are often
adopted first, Cytyc launched an ad campaign. "Since I have to have a
Pap test," the woman in the ad said, "I want the one that improves
detection."
In December, Harvard Pilgrim Health Care, the largest health-maintenance
organization in New England, decided to cover the test. "This is a women's
health issue -- potentially inflammatory -- and we pride ourselves on our
reputation for women's health care," says Roberta Herman, who heads a
committee that reviews which technologies the HMO will cover.
Earlier last fall, an influential group of female gynecologists, Women's
Health Connecticut, sent out a letter asking insurers to cover the new test.
All the state's major insurers subsequently approved coverage.
Medicare also decided to cover the test, effective Jan. 1. President Clinton
highlighted the decision to cover the "lifesaving technology" in a holiday
radio address. But that was only the beginning of the battle, since
Medicare allows regional administrators to set payment rates, which are
used to set a national rate at the end of a year's time. Cytyc shifted its
focus to getting a high coverage price, hiring lobbyists in a handful of
critical states, including Texas, Florida and California.
Cards of Protest
James E. Alexander Jr., Medicare medical director for Blue Cross and
Blue Shield of Texas, originally had planned to allot $7 for each ThinPrep
-- the same as a regular Pap -- but soon found his mailbox full of protest
postcards from doctors, who had mailed them at Cytyc's urging. He also
got a letter from U.S. Rep. Bernice Johnson, a Democrat from Dallas,
arguing that the $7 rate would "severely limit access" to the test, and an
angry call from Raheelah Ashfaq, director of cytopathology at the
University of Texas Southwestern Medical Center.
Dr. Ashfaq, who helped test ThinPrep, says Dr. Alexander argued that the
real cervical-cancer problem is that women don't get Paps often enough.
She replied, "all the more reason why they should get the best available
test we can give them when they do come in." Recently, Dr. Alexander
raised the rate to $14.50 -- still below the $20 to $25 labs say they need
to break even.
In mid-1997, Cytyc doubled the number of salesmen calling on insurers to
six and hired 15 more to call on doctors. It also decided to pay 450
Bristol Myers Squibb Co. salesmen to pitch ThinPrep with their other
products. Then, in February of this year, came another blow: The study,
funded by the Blue Cross and Blue Shield Association's Technology
Evaluation Center, and written by Dr. Garber, the Stanford economics
professor.
Circulated to about 40 insurers, the study determined that ThinPrep would
add only about five hours to the average woman's life if used every year
instead of the traditional Pap. Cytyc, which disputes the accuracy of Dr.
Garber's report, is keeping up the pressure. One of its lobbyists recently
convinced a Pennsylvania state representative to file a bill that would
require insurers in the state to cover ThinPrep. And Cigna Corp., after
numerous pitches, decided last month to cover the test. "We're seeing a
light at the end of the tunnel," says Mr. Sullivan.
If so, the glow is intermittent. On the day of Cigna's decision came the
American College of Obstetricians and Gynecologists' decision not to
endorse ThinPrep as a standard of care. "New," says Stanley Zinberg,
vice president of the doctors' group, "does not necessarily always mean
better."
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