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Cancer drugs get even pricier

Posted on over 1 year ago by Gerry Kennedy

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Rising cancer drug prices have sparked outrage from patients, doctors and payers. Now, new information is adding fuel to the fire. Launch prices for cancer meds have increased over the years, and pharma continues to hike prices even after they’re approved for a broader patient pool, two new studies show.

In one study, researchers looked at 32 oral cancer meds and found that launch prices have spiraled upward, even after adjusting for inflation. Insurers and patients paid about $2,000 a month on average for a new cancer drug in 2000, but that number shot up to $11,325 in 2014, according to results published in JAMA Oncology.

Another study followed prices for two dozen cancer meds after they were launched, and saw that drugmakers on average jacked up prices 5% above inflation every year. The biggest hikes, of about 10%, were linked to a drug getting approved for additional indications, according to data published in Health Affairs.

Pharma has argued that high prices for cancer drugs are necessary to recoup R&D costs for making meds for smaller patient populations. But the trend seen in the latter study runs counter to this argument, Caroline Bennette, a health economist at the University of Washington in Seattle who led the Health Affairs study, told The Washington Post.

“You’d think it [the costs] would be distributed across all patients and be cheaper. I think the argument that they’re trying to recoup the research and development over 1,000 patients is not actually representative of what’s going on,” Bennette said.

Still, there were some limitations to the findings. Both studies focused on the amount patients and insurers together paid for the drug, which doesn’t reflect discounts negotiated between pharma companies and PBMs, the WaPo article points out.

And a variety of factors could contribute to rising cancer drug prices, including market competition and a med’s value to the healthcare system, Holly Campbell, spokeswoman for industry trade group PhRMA, told the newspaper. “For example, after a medicine comes to market, we may find out that it is more effective or has broader use than originally anticipated,” Campbell said.

But those arguments haven’t been enough to satisfy payers, many of which are striking back at pharma’s price hikes. PBM giant Express Scripts ($ESRX) has already rolled out a value-based price-fighting program that links payments for cancer drugs to their performance.