Lowering the cost of cancer drugs in the US

US dollars

Photo by Petr Kratochvil

Increasingly high prices for cancer drugs are affecting patient care and the overall healthcare system in the US, according to authors of an article in Mayo Clinic Proceedings.

The authors noted that the average price of cancer drugs for about a year of therapy increased from $5000 to $10,000 before 2000, and to more than $100,000 by 2012.

Over nearly the same period, the average household income in the US decreased by about 8%.

“Americans with cancer pay 50% to 100% more for the same patented drug than patients in other countries,” said author S. Vincent Rajkumar, MD, of the Mayo Clinic in Rochester, Minnesota.

“As oncologists, we have a moral obligation to advocate for affordable cancer drugs for our patients.”

Dr Rajkumar and co-author Hagop Kantarjian, MD, of MD Anderson Cancer Center in Houston, Texas, rebutted the major arguments the pharmaceutical industry uses to justify the high price of cancer drugs; namely, the expense of conducting research and drug development, the comparative benefits to patients, that market forces will settle prices to reasonable levels, and that price controls on cancer drugs will stifle innovation.

“One of the facts that people do not realize is that cancer drugs, for the most part, are not operating under a free market economy,” Dr Rajkumar said. “The fact that there are 5 approved drugs to treat an incurable cancer does not mean there is competition.”

“Typically, the standard of care is that each drug is used sequentially or in combination, so that each new drug represents a monopoly with exclusivity granted by patent protection for many years.”

Drs Rajkumar and Kantarjian said other reasons for the high cost of cancer drugs include legislation that prevents Medicare from being able to negotiate drug prices and a lack of value-based pricing, which ties the cost of a drug to its relative effectiveness compared to other drugs.

The authors recommended a set of potential solutions to help control and reduce the high cost of cancer drugs in the US. Some of their recommendations are already in practice in other developed countries. Their recommendations include:

• Allow Medicare to negotiate drug prices
• Develop cancer treatment pathways/guidelines that incorporate the cost and benefit of cancer drugs
• Allow the Food and Drug Administration or physician panels to recommend target prices based on a drug’s magnitude of benefit (value-based pricing)
• Eliminate “pay-for-delay” strategies in which a pharmaceutical company with a brand name drug shares profits on that drug with a generic drug manufacturer for the remainder of a patent period, effectively eliminating a patent challenge and competition
• Allow the importation of drugs from abroad for personal use
• Allow the Patient-Centered Outcomes Research Institute and other cancer advocacy groups to consider cost in their recommendations
• Create patient-driven grassroots movements and organizations to advocate effectively for the interests of patients with cancer to balance advocacy efforts of pharmaceutical companies, insurance companies, pharmacy outlets, and hospitals.

Dr Kantarjian has organized a petition, which is available on change.org, asking the federal government to implement these changes.

US dollars

Photo by Petr Kratochvil

Increasingly high prices for cancer drugs are affecting patient care and the overall healthcare system in the US, according to authors of an article in Mayo Clinic Proceedings.

The authors noted that the average price of cancer drugs for about a year of therapy increased from $5000 to $10,000 before 2000, and to more than $100,000 by 2012.

Over nearly the same period, the average household income in the US decreased by about 8%.

“Americans with cancer pay 50% to 100% more for the same patented drug than patients in other countries,” said author S. Vincent Rajkumar, MD, of the Mayo Clinic in Rochester, Minnesota.

“As oncologists, we have a moral obligation to advocate for affordable cancer drugs for our patients.”

Dr Rajkumar and co-author Hagop Kantarjian, MD, of MD Anderson Cancer Center in Houston, Texas, rebutted the major arguments the pharmaceutical industry uses to justify the high price of cancer drugs; namely, the expense of conducting research and drug development, the comparative benefits to patients, that market forces will settle prices to reasonable levels, and that price controls on cancer drugs will stifle innovation.

“One of the facts that people do not realize is that cancer drugs, for the most part, are not operating under a free market economy,” Dr Rajkumar said. “The fact that there are 5 approved drugs to treat an incurable cancer does not mean there is competition.”

“Typically, the standard of care is that each drug is used sequentially or in combination, so that each new drug represents a monopoly with exclusivity granted by patent protection for many years.”

Drs Rajkumar and Kantarjian said other reasons for the high cost of cancer drugs include legislation that prevents Medicare from being able to negotiate drug prices and a lack of value-based pricing, which ties the cost of a drug to its relative effectiveness compared to other drugs.

The authors recommended a set of potential solutions to help control and reduce the high cost of cancer drugs in the US. Some of their recommendations are already in practice in other developed countries. Their recommendations include:

• Allow Medicare to negotiate drug prices
• Develop cancer treatment pathways/guidelines that incorporate the cost and benefit of cancer drugs
• Allow the Food and Drug Administration or physician panels to recommend target prices based on a drug’s magnitude of benefit (value-based pricing)
• Eliminate “pay-for-delay” strategies in which a pharmaceutical company with a brand name drug shares profits on that drug with a generic drug manufacturer for the remainder of a patent period, effectively eliminating a patent challenge and competition
• Allow the importation of drugs from abroad for personal use
• Allow the Patient-Centered Outcomes Research Institute and other cancer advocacy groups to consider cost in their recommendations
• Create patient-driven grassroots movements and organizations to advocate effectively for the interests of patients with cancer to balance advocacy efforts of pharmaceutical companies, insurance companies, pharmacy outlets, and hospitals.

Dr Kantarjian has organized a petition, which is available on change.org, asking the federal government to implement these changes.

US dollars

Photo by Petr Kratochvil

Increasingly high prices for cancer drugs are affecting patient care and the overall healthcare system in the US, according to authors of an article in Mayo Clinic Proceedings.

The authors noted that the average price of cancer drugs for about a year of therapy increased from $5000 to $10,000 before 2000, and to more than $100,000 by 2012.

Over nearly the same period, the average household income in the US decreased by about 8%.

“Americans with cancer pay 50% to 100% more for the same patented drug than patients in other countries,” said author S. Vincent Rajkumar, MD, of the Mayo Clinic in Rochester, Minnesota.

“As oncologists, we have a moral obligation to advocate for affordable cancer drugs for our patients.”

Dr Rajkumar and co-author Hagop Kantarjian, MD, of MD Anderson Cancer Center in Houston, Texas, rebutted the major arguments the pharmaceutical industry uses to justify the high price of cancer drugs; namely, the expense of conducting research and drug development, the comparative benefits to patients, that market forces will settle prices to reasonable levels, and that price controls on cancer drugs will stifle innovation.

“One of the facts that people do not realize is that cancer drugs, for the most part, are not operating under a free market economy,” Dr Rajkumar said. “The fact that there are 5 approved drugs to treat an incurable cancer does not mean there is competition.”

“Typically, the standard of care is that each drug is used sequentially or in combination, so that each new drug represents a monopoly with exclusivity granted by patent protection for many years.”

Drs Rajkumar and Kantarjian said other reasons for the high cost of cancer drugs include legislation that prevents Medicare from being able to negotiate drug prices and a lack of value-based pricing, which ties the cost of a drug to its relative effectiveness compared to other drugs.

The authors recommended a set of potential solutions to help control and reduce the high cost of cancer drugs in the US. Some of their recommendations are already in practice in other developed countries. Their recommendations include:

• Allow Medicare to negotiate drug prices
• Develop cancer treatment pathways/guidelines that incorporate the cost and benefit of cancer drugs
• Allow the Food and Drug Administration or physician panels to recommend target prices based on a drug’s magnitude of benefit (value-based pricing)
• Eliminate “pay-for-delay” strategies in which a pharmaceutical company with a brand name drug shares profits on that drug with a generic drug manufacturer for the remainder of a patent period, effectively eliminating a patent challenge and competition
• Allow the importation of drugs from abroad for personal use
• Allow the Patient-Centered Outcomes Research Institute and other cancer advocacy groups to consider cost in their recommendations
• Create patient-driven grassroots movements and organizations to advocate effectively for the interests of patients with cancer to balance advocacy efforts of pharmaceutical companies, insurance companies, pharmacy outlets, and hospitals.

Dr Kantarjian has organized a petition, which is available on change.org, asking the federal government to implement these changes.