Oncologists decry high cost of cancer drugs

Volume 4, Issue 2, 2015

Summary

Medicare negotiations and value-based pricing are among solutions to control prices.

Photograph of S. Vincent Rajkumar, M.D.

S. Vincent Rajkumar, M.D.

The increasing cost of cancer drugs is affecting patient care in the U.S. and the American health care system overall, say the authors of a special article published online in the May 2015 issue of the journal Mayo Clinic Proceedings.

"Americans with cancer pay 50 to 100 percent more for the same patented drug than patients in other countries," said co-author S. Vincent Rajkumar, M.D., a hematologist at the Mayo Clinic Cancer Center. "As oncologists, we have a moral obligation to advocate for affordable cancer drugs for our patients."

Before 2000, the average cost of a cancer drug for a year of therapy ranged from $5,000 to $10,000 in the U.S. By 2012, the average annual cost had increased to more than $100,000. Over the same period, the average household income in the U.S. decreased by about 8 percent.

The authors also rebut the major arguments the pharmaceutical industry uses to justify the high price of cancer drugs: the expense of conducting research and drug development; the comparative benefits to patients; the idea that market forces will settle prices to reasonable levels; and concern that price controls on cancer drugs will stifle innovation.

The article also explores other reasons for the high cost of cancer drugs, including 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 with other drugs.

Solutions that could help control the cost of cancer drugs — some of which are already in place in other countries — could include:

  • Allowing Medicare to negotiate drug prices
  • Developing cancer treatment pathways and guidelines that incorporate the cost and benefit of cancer drugs
  • Allowing the U.S. Food and Drug Administration or physician panels to recommend target prices based on a drug's magnitude of benefit (value-based pricing)
  • Eliminating 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
  • Allowing the importation of drugs from abroad for personal use
  • Allowing the Patient-Centered Outcomes Research Institute and other cancer advocacy groups to consider cost in their cancer care recommendations
  • Creating 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