In the Journals

Oncologists examine rising costs of cancer drugs

The rising costs of cancer drugs are detrimental to patient care and must be addressed, according to the authors of a special article published in Mayo Clinic Proceedings.

Hagop Kantarjian MD, chair of the department of leukemia in the division of cancer medicine at The University of Texas MD Anderson Cancer Center, and S. Vincent Rajkumar MD, professor of medicine at the Mayo Clinic Cancer Center in Rochester, Minnesota, described the consequences of rising costs, disagreed with justifications for costly cancer treatments and offered solutions to control drug costs.

Hagop Kantarjian, MD

Hagop Kantarjian

“Americans with cancer pay 50% to 100% more for the same patented drug than patients in other countries,” Rajkumar said in a press release. “As oncologists, we have a moral obligation to advocate for affordable cancer drugs for our patients.”

The average price of cancer drugs in the United States increased from $5,000 for about a year of therapy to $10,000 before 2000 and then skyrocketed to more than $100,000 by 2012, Kantarjian and Rajkumar wrote. However, the average U.S. household income has decreased by 8% in the last decade.

Further, out-of-pocket expenses for cancer drugs in the United States are between 20% and 30% of costs, which in most instances would equate to about half of the average U.S. household income ($52,000) based on 2013 data. This burden would increase further for seniors who rely on Medicare, who on average earn $23,500 a year.

Unjustifiable increases

The exponential rise in cancer drug costs for American patients has often been justified by pharmaceutical companies by the expense of drug R&D, the comparative benefit to patients and a self-correcting market, according to the report.

Kantarjian and Rajkumar rebutted each of these standard explanations.

Objective research has shown drug R&D is about 10% of the $1 billion figure pharmaceutical companies have previously reported. Further, although companies have argued that higher costs are warranted for more beneficial drugs, studies have shown that one drug may prolong life by years and another by days, and yet each have comparable costs.

The authors said cancer drug prices will invariably be much higher when there are so few players setting the prices for the products.

“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,” Rajkumar said. “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.”

Pharmaceutical companies also have argued that limiting drugs costs would reduce R&D for future novel agents; however, according to the authors, a small amount of profits made from sale of these drugs is directed toward future research.

Additional factors perpetuating higher drug costs include “patent evergreening,” in which minor variations to a drug can extend or renew its patent, and “pay-for-delay” strategies that delay the introduction of affordable generics in the United States.

For example, imatinib (Gleevec, Novartis) — a kinase inhibitor most often used in the treatment of leukemia — costs $92,000 annually in the United States compared with $46,000 annually in Canada and $29,000 in Mexico. Novartis was able to delay the release of the more affordable generic form of imatinib from July 2015 until February 2016, Kantarjian and Rajkumar wrote.

Possible solutions

At the top of the list of solutions, Kantarjian and Rajkumar wrote Medicare should be able to negotiate drug prices. The 2003 Medicare Prescription Drug, Improvement and Modernization Act introduced legislation that forbade Medicare from doing so, and the 2006 Medicare expansion included prescription drug benefits, and therefore, allowed only drug companies and distributors to control drug prices.

Additionally, the authors suggested costs can be controlled through the development of cancer treatment guidelines that incorporate the cost–benefit of certain drugs, as is done in many other countries, and through the addition of cost concerns in cancer advocacy group recommendations.

Further, the FDA should recommend target prices, as other global regulatory agencies do; drugs should be able to be imported from other nations; and the pay-for-delay strategy should be eliminated, the authors wrote.

Kantarjian and Rajkumar also called for the creation of grassroots organizations to advocate for patients with cancer.

“The only real advocates for patients may be the patients themselves (and hopefully, more recently, oncologists and cancer organizations),” Kantarjian and Rajkumar wrote. “Perhaps the best strategy to advocate for affordable cancer drug prices is to organize patient-based grassroots movements … to pressure our elected representatives to represent patient interests and to control cancer drug prices.” – by Anthony SanFilippo

Disclosure: Kantarjian and Rajkumar report no relevant financial disclosures.

The rising costs of cancer drugs are detrimental to patient care and must be addressed, according to the authors of a special article published in Mayo Clinic Proceedings.

Hagop Kantarjian MD, chair of the department of leukemia in the division of cancer medicine at The University of Texas MD Anderson Cancer Center, and S. Vincent Rajkumar MD, professor of medicine at the Mayo Clinic Cancer Center in Rochester, Minnesota, described the consequences of rising costs, disagreed with justifications for costly cancer treatments and offered solutions to control drug costs.

Hagop Kantarjian, MD

Hagop Kantarjian

“Americans with cancer pay 50% to 100% more for the same patented drug than patients in other countries,” Rajkumar said in a press release. “As oncologists, we have a moral obligation to advocate for affordable cancer drugs for our patients.”

The average price of cancer drugs in the United States increased from $5,000 for about a year of therapy to $10,000 before 2000 and then skyrocketed to more than $100,000 by 2012, Kantarjian and Rajkumar wrote. However, the average U.S. household income has decreased by 8% in the last decade.

Further, out-of-pocket expenses for cancer drugs in the United States are between 20% and 30% of costs, which in most instances would equate to about half of the average U.S. household income ($52,000) based on 2013 data. This burden would increase further for seniors who rely on Medicare, who on average earn $23,500 a year.

Unjustifiable increases

The exponential rise in cancer drug costs for American patients has often been justified by pharmaceutical companies by the expense of drug R&D, the comparative benefit to patients and a self-correcting market, according to the report.

Kantarjian and Rajkumar rebutted each of these standard explanations.

Objective research has shown drug R&D is about 10% of the $1 billion figure pharmaceutical companies have previously reported. Further, although companies have argued that higher costs are warranted for more beneficial drugs, studies have shown that one drug may prolong life by years and another by days, and yet each have comparable costs.

The authors said cancer drug prices will invariably be much higher when there are so few players setting the prices for the products.

“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,” Rajkumar said. “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.”

Pharmaceutical companies also have argued that limiting drugs costs would reduce R&D for future novel agents; however, according to the authors, a small amount of profits made from sale of these drugs is directed toward future research.

Additional factors perpetuating higher drug costs include “patent evergreening,” in which minor variations to a drug can extend or renew its patent, and “pay-for-delay” strategies that delay the introduction of affordable generics in the United States.

For example, imatinib (Gleevec, Novartis) — a kinase inhibitor most often used in the treatment of leukemia — costs $92,000 annually in the United States compared with $46,000 annually in Canada and $29,000 in Mexico. Novartis was able to delay the release of the more affordable generic form of imatinib from July 2015 until February 2016, Kantarjian and Rajkumar wrote.

Possible solutions

At the top of the list of solutions, Kantarjian and Rajkumar wrote Medicare should be able to negotiate drug prices. The 2003 Medicare Prescription Drug, Improvement and Modernization Act introduced legislation that forbade Medicare from doing so, and the 2006 Medicare expansion included prescription drug benefits, and therefore, allowed only drug companies and distributors to control drug prices.

Additionally, the authors suggested costs can be controlled through the development of cancer treatment guidelines that incorporate the cost–benefit of certain drugs, as is done in many other countries, and through the addition of cost concerns in cancer advocacy group recommendations.

Further, the FDA should recommend target prices, as other global regulatory agencies do; drugs should be able to be imported from other nations; and the pay-for-delay strategy should be eliminated, the authors wrote.

Kantarjian and Rajkumar also called for the creation of grassroots organizations to advocate for patients with cancer.

“The only real advocates for patients may be the patients themselves (and hopefully, more recently, oncologists and cancer organizations),” Kantarjian and Rajkumar wrote. “Perhaps the best strategy to advocate for affordable cancer drug prices is to organize patient-based grassroots movements … to pressure our elected representatives to represent patient interests and to control cancer drug prices.” – by Anthony SanFilippo

Disclosure: Kantarjian and Rajkumar report no relevant financial disclosures.