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Experts Explore the Reasons Behind the High Cost of Cancer Drugs in America

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Key Points

  • In the United States, patients with cancer pay 50% to 100% more for the same patented drug than patients in other countries.
  • The average price of cancer drugs for about a year of therapy increased from $5,000 to $10,000 before 2000 to more than $100,000 by 2012.
  • The authors rebut the major arguments used to justify the high price of cancer drugs, such as the expense of conducting research and drug development, and offer suggestions on how to help control and reduce costs.

Increasingly high prices for cancer drugs are affecting patient care, as well as the health-care system overall, in the United States. These findings were published in a special article by Rajkumar and Kantarjian in the journal Mayo Clinic Proceedings.

“Americans with cancer pay 50% to 100% more for the same patented drug than patients in other countries,” said S. Vincent Rajkumar, MD, of Mayo Clinic Cancer Center, one of the authors. “As oncologists, we have a moral obligation to advocate for affordable cancer drugs for our patients.”

Unprecedented Rising Costs

Dr. Rajkumar and his colleague, Hagop Kantarjian, MD, of The University of Texas MD Anderson Cancer Center, say the average price of cancer drugs for about a year of therapy increased from $5,000 to $10,000 before 2000 to more than $100,000 by 2012. Over nearly the same period, the average household income in the United States decreased by about 8%.

In their article, the authors rebut the major arguments the pharmaceutical industry often 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.

“Cancer drugs, for the most part, are not operating under a free market economy,” said Dr. Rajkumar. “The fact that there are five 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.”

According to Drs. Rajkumar and Kantarjian, 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 with other drugs.

Potential Solutions

The authors recommend a set of potential solutions to help control and reduce the high cost of cancer drugs in the United States, some of which are already in practice in other developed countries. Their recommendations include:

  • Allow Medicare to negotiate drug price.
  • Develop cancer treatment pathways/guidelines that incorporate the cost and benefit of cancer drugs.
  • Allow 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).
  • 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 against pharmaceutical companies, insurance companies, pharmacy outlets, and hospitals.

Dr. Kantarjian is the corresponding author of the Mayo Clinic Proceedings article.

The content in this post has not been reviewed by the American Society of Clinical Oncology, Inc. (ASCO®) and does not necessarily reflect the ideas and opinions of ASCO®.


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