How Have We Got It So Wrong?

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John F. Smyth, MD

John F. Smyth, MD

The past 20 years have seen an unprecedented increase in the development of effective drugs for the management of cancer. The advent of immunotherapy offers even the promise of cure for some previously highly resistant diseases. The science is brilliant, the need is ever increasing—but the cost is unaffordable! How have we got this so wrong?

It is easy to criticize and blame those involved in the separate components of drug development, but I suggest that ultimately, this is a responsibility for the whole of society to address. Innovation comes from academia and the pharmaceutical industry; we have developed excellent partnerships, and the time from bench to bedside has been considerably reduced. The latter has been helped by genuine cooperation between clinical researchers and regulators, especially the U.S. Food and Drug Administration (FDA) and the European Medicines Agency (EMA), in designing trials that are much more likely to result in regulatory approval than was the case in the past. However, the biggest hurdle is post licensing, when payers and health technology assessors have to decide whether the price is acceptable to achieve value for money—and the crunch is to assign that concept of “value” to a new intervention, in comparison to alternatives and the opportunity cost/loss when budgets are limited, which they always will be.

Defining Value on Both Sides of the Atlantic

In 1892, Oscar Wilde famously defined a cynic as “a man who knows the price of everything and the value of nothing.” I do not think that any of us needs to be cynical about the costs of new medicines, but we do need to better define “value.”

In an excellent article by Hagop M. Kantarjian, MD, in The ASCO Post,1 he addresses the U.S. position as to whether the Trump administration’s plan to reduce cancer drug prices will work. Dr. Kantarjian quotes that the average price of a cancer drug ranges from $10,000 per year to $170,000 between the years 2000 and 2017.2 With so many new medicines being approved, it was hoped that market forces would push prices down, but this has not happened. Dr. Kantarjian quoted the U.S. Department of Health and Human Services Secretary Alex Azar as saying the drug industry’s repeated mantra that it must make large profits to pay for research and innovation was a tired point, and he maintained that the biggest problem was simple: drug prices are too high.

One of Dr. Kantarjian’s proposed solutions is to follow the European Union (EU) practices based on objective benefit (value-based pricing). However, in Europe, we still have far too much variation in what we call “value.”3

In most, but not all, countries in the EU, following an approval from the EMA, a new project is subject to health technology assessors. In the UK, the National Institute for Clinical Excellence (NICE) decides for all (except Scotland, where we have our own Scottish Medicines Consortium). Recently, the latter rejected chimeric antigen receptor T-cell therapy with tisagenlecleucel for adults with diffuse large B-cell lymphoma, despite a positive approval for the rest of the UK by NICE—extraordinary!

The challenge facing health technology assessors is enormous, and the very success of research across many areas of medicine compounds this problem when faced with fixed budgets. Our National Health Service in the UK is more than creaking at the seams for many reasons, and the shameful arguments over Brexit will only compound this. However, we have to find more acceptable ways to agree on “value for money” to allow the right patients access to potentially curative treatment (in this example).

Difficulty in Assessing New Cancer Treatments

Great progress has been achieved in the past decade by regulators, especially at the FDA and EMA. In a thoughtful “perspective” in The New England Journal of Medicine, published in February 2019,4 Tatiana Prowell, MD, and colleagues used the example of neoadjuvant treatment of breast cancer to highlight the difficulties for everyone involved in assessing new agents for a cancer where there are so many other possible influences on overall survival. They highlighted the

The actual cost of developing an individual drug is difficult to determine, but, surely, we need to rebalance the ambition of needing to reward shareholders with the cost of new medicines.
— John F. Smyth, MD

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development of protocols that use increasingly complex, expensive, multidrug regimens, which expose patients to overtreatment with unnecessary toxicities, both in the short and long term—the very antithesis of what precision medicine seeks to avoid.

The development of biomarkers and genetic profiling has led to the concept of smaller, well-characterized groups of patients being selected for pivotal trials to facilitate smaller and faster regulatory submissions. This challenges the statisticians5 but “should” result in both better patient outcomes and reduced financial burden for patients and society. But is this happening? There is little evidence to date that it is.

‘One of the Greatest Challenges of Our Time’

Ultimately, it is for the highly profitable pharmaceutical industry to reduce the costs of medicines, and there “are” ways to achieve this without losing support from shareholders. This is where society as a whole needs to play its part in refining what we mean by “value” and perhaps accepting a lower return on investment across the health-care spectrum.

Late in 2018, ASCO and the European Society for Medical Oncology published a joint assessment of their value frameworks, highlighting concordance but also revealing significant discordance.6 The latter is attributed to using different approaches to the evaluation of relative and absolute gains for overall survival, and progression-free survival, crediting the tail of the curve gains and assessing toxicity.6 It is hoped that the development of robust tools to assess “value” will help balance the argument for pricing vs the opportunity cost in allocating budgets for health care.

I believe that this issue of how we value health care poses one of the greatest challenges of our time. Continued successful research will only compound our choices, but tough decisions must be made. The actual cost of developing an individual drug is difficult to determine, but, surely, we need to rebalance the ambition of needing to reward shareholders with the cost of new medicines. This past year, in an interview with the Financial Times, the chief executive of a major pharmaceutical company was quoted as saying quite openly that, “their primary responsibility was to their shareholders”; there was no mention of patients or the needs of health-care deliverers at all! Surely, we can do better than that.

Reducing Cost of New Agents: A Benefit for All?

Of course, we need investment in the pharmaceutical industry—its products are essential, and despite the costs of failure, the rewards make it one of the most successful area for investors. Businesses increasingly wish to be credited with an ethical approach. I am therefore suggesting that for sustainability and above all to make good medicines available to those most in need, there may be a case globally for being less ambitious about returns that impact directly on cost. Since everyone eventually needs health care, is it beyond the realm of possibility that investors and shareholders, who represent an important sector of society, could accept smaller gains than they currently expect and thereby help the “market forces” argument to reduce the cost of new medicines? Would it not be to everyone’s benefit to do so? 

Dr. Smyth is Professor Emeritus of Medical Oncology at the University of Edinburgh, Scotland.

DISCLOSURE: Dr. Smyth has served as an advisor/consultant for Bristol-Myers Squibb, Merck, and Northwest Biotherapeutics (NWB); and has stock ownership in NWB and AstraZeneca.


1. Kantarjian HM: Will the Trump administration’s plan to reduce cancer drug prices work? The ASCO Post. December 25, 2018.

2. Kantarjian H, Patel Y: High cancer drug prices four years later: Progress and prospects. Cancer 123:1292-1297, 2017.

3. National Institute for Health and Care Excellence: Cost/Benefit of Cancer Drugs. November 5, 2018. Available at Accessed May 22, 2019.

4. Prowell TM, Beaver JA, Pazdur R: Residual disease after neoadjuvant therapy: Developing drugs for high-risk early breast cancer. N Engl J Med 380:612-615, 2019.

5. Vogl SE: The risks of drug approval based on shaky evidence. The ASCO Post. March 25, 2019.

6. Cherny NI, de Vries EGE, Dafni U, et al: Comparative assessment of clinical benefit using the ESMO-Magnitude of Clinical Benefit Scale version 1.1 and the ASCO Value Framework Net Health Benefit Score. J Clin Oncol 37:336-349, 2019.