HEALTH NEWS

Price of Cancer Drugs Has Skyrocketed Since 2000

Written by David Mills on April 28, 2016

drug cost skyrocketing

For some cancer patients, taking a new cancer drug is simply a matter of buying time.

It turns out, though, they are paying a lot for those extra months and years.

A study published today in JAMA Oncology reports that new cancer drugs taken in pill form have become dramatically more expensive in their initial year on the market than other drugs launched 15 years ago.

drug costs skyrocket

In addition, the researchers say, the prices of those drugs increase rapidly even after their first year on the market.

Dr. Alan Venook, an oncologist at the University of California, San Francisco, notes that many of these drugs are not even cures. They simply delay the progression of cancer.

“It’s beyond me. I guess they do it [raise prices] because they can do it,” Venook told Healthline. “It’s a big, big problem.”

Read More: You Survived Cancer. Now How Do You Pay Your Bills? »

The Price of Treatment

Researchers looked at 32 orally administered drugs introduced since 2000.

They said the average monthly cost of the drugs approved in that year was $1,869.

That figure rose to $11,325 a month for new drugs introduced in 2014. That’s a sixfold increase, even after adjusting for inflation.

One of the drugs highlighted in the research was imatinib, also known by the brand name Gleevec. When it was launched in 2001, the average monthly cost was $3,346. In 2014, that monthly cost had risen to $8,479. That’s an average annual increase of 7.5 percent.

The researchers said the amount paid by health insurance companies was factored into the cost. They also pointed out that many patients are now paying a higher percentage of these expenses than they were 15 years ago.

"Patients are increasingly taking on the burden of paying for these high-cost specialty drugs as plans move toward use of higher deductibles and co-insurance — where a patient will pay a percentage of the drug cost rather than a flat copay," said study author Stacie Dusetzina, Ph.D., an assistant professor at the University of North Carolina, in a press release.

Officials at the Pharmaceutical Research and Manufacturers of America (PhRMA) said the dramatic improvements in cancer treatment over the past decade have helped people live longer, healthier lives.

They noted the cancer death rate in the United States has fallen 23 percent since its peak and two of three patients diagnosed with cancer now live at least five years after diagnosis.

They added there has been a rapid rise in healthcare plans with high deductibles for medicine.

"Focusing solely on the list prices of medicines is misleading,” Holly Campbell, senior director of communications for PhRMA, told Healthline in an email. " A new report from the IMS Institute found net prices for brand medicines increased just 2.8 percent in 2015, down from 5.1 percent the prior year as discounts and rebates negotiated by payers rose sharply. Similarly, CVS Health and Express Scripts recently reported actual medicine spending growth in 2015 was less than half from the prior year. This is due to a competitive marketplace for medicines where large, powerful purchasers negotiate aggressively."

Read More: Uninsured Get Slammed for High Cost of Breast Cancer Treatment »

Is It Worth It?

The price increases bring up two questions.

Who can afford the drugs, and are they getting their money’s worth?

Venook said cancer patients are sometimes put into the position of deciding if they want to drain their finances to slow the progression of their disease.

He has one patient who has been taking Gleevec for years. It’s been effective, but the woman recently decided to take the pill only four times a week to save money.

Venook said the prices also put doctors in a predicament. They want the best for their patients, but that might not always involve taking the latest cancer drug, especially if it’s uncertain how well it will work on a particular patient.

Venook said Gleevec can have good results, so it may be worth the cost.

“It’s a very effective drug,” said Venook. “With that one, they should be able to charge a premium.”

Some of the newer drugs for hepatitis C have also been effective. In some cases, they have cured the disease and allowed patients to forgo expensive treatments such as liver transplants.

“That makes a world of difference to patients,” Venook noted.

Read More: Rating System Unveiled for Cancer Costs, Treatment »

Price Based on Value?

Venook said perhaps the best way to regulate the situation is to approve policies that require companies to set prices based on how much benefit certain drugs provide.

He suggested that perhaps a new drug could be given to a patient for free for two months. If it’s effective, then a company could start charging for it.

“The only fair way is to price drugs according to their value,” said Venook.

Dr. Len Lichtenfeld, deputy chief medical officer for the American Cancer Society, said that’s what’s happening in some countries in Europe and other places.

He told Healthline that some European nations will pay a company more for a drug if it’s effective.

He added Medicare officials in the United States are considering a plan to set payments for drugs based on how effective they are against certain diseases.

If a drug works well in treating lung cancer, for example, the pharmaceutical company would be paid more when it’s used on lung cancer patients than when it’s used less effectively on, say, colon cancer patients.

“The solutions are not going to be simple,” said Lichtenfeld. “There has to be a balance.”

Cancer Drugs Aren’t the Only Ones

Cancer drugs aren’t the only pharmaceuticals with a spotlight on them.

On Wednesday, Michael Pearson, the outgoing chief executive officer of Valeant Pharmaceuticals International, told a Senate committee that his firm was too aggressive in raising prices on its drugs.

Valeant acquired the rights to the cardiac-care drugs Isuprel and Nitropress last year. They quickly raised the medications’ prices by 525 percent and 212 percent, respectively, according to the Wall Street Journal.

In addition, the prices of 16 Valeant drugs have increased this year.

The company is under investigation by the Security and Exchange Commission (SEC) and other agencies, the Wall Street Journal reported.

Pearson told the Senate Special Committee on Aging that Valeant has spent $1 billion to help patients afford the cardiac drugs.

However, he acknowledged Valeant’s strategy of acquiring drugs that needed hefty price increases was a mistake.

His testimony came less than three months after Martin Shkreli, the former chief executive of Turing Pharmaceuticals, refused to answer questions at a House committee hearing on the rising price of drugs.

Turing made the news last year when the company bought the rights to the drug Daraprim and then raised the price per pill from $13 to $750.

Another pharmaceutical company, Gilead, made news in 2014 when it started selling the drug Sovaldi for $84,000 for a 12-week treatment regimen.

The drug has a 95 percent cure for hepatitis C.

These and other price hikes have led many consumer advocates to question why some prescription drugs cost so much and others don’t.

This spring the Federal Drug Administration (FDA) quietly started a program to speed up the drug approval process to help avoid future price gouging.

The goal is to bring more drugs onto the market, thus increasing competition and forcing down the prices of prescriptions.

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