The Grapevine

High Cost Of Cancer Drugs Is Damaging Patient Care: Oncologists Offer Solutions For Growing Problem

packet of pills
Unlike other products, cancer drugs do not work on a free market. Photo courtesy of Shutterstock

Despite advancements in cancer treatments, the high cost of drugs prevents many patients from receiving the treatment they need. The problem is especially bad in America, where patients pay nearly 50 to 100 percent more than patients worldwide. In a recently released study, oncologists explain why.

Not A Free Market

Drugs are one of the biggest money-making industries in the world, but unlike other products, drug prices are not based on the traditional supply and demand market.

"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," explained Dr. S. Vincent Rajkumar, one of the authors of the study, in a recent press release.

This means that, although there are five drugs on the market all used to treat the same incurable cancer, the drugs are not necessarily in competition with one another.

"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," Rajkumar added.

So no competition means little price control.

Reasoning Behind The High Cost Of Drugs

With each drug essentially owning a monopoly in cancer treatment, there’s no cap on what to charge. But how exactly are drug companies justifying the high cost of their treatments?

In the paper, the oncologists explain just how expensive it is to conduct research and develop drugs. Pharmaceutical companies will use the price of the drugs as a way to earn back their loses. Unfortunately, setting a price control on cancer drugs discourages companies from further drug innovation. As a result, cancer treatment is seriously expensive, with the problem being especially prevalent in the United States — and only getting worse.

According to the study, the average price of cancer drugs for about a year of therapy increased from between $5,000 to $10,000 before the year 2000, to more than $100,000 by 2012. This is beginning to mean that new cancer developments will only be available to those who can afford it, something that around 20 percent of people with health insurance are unable to do, as reported by CNN.

"We can now begin to talk about eliminating cancer as a major public health problem in the United States early in this new century. If we can pay for it," John Seffrin of the American Cancer Society told CNN.

Seeking To Solve The Problem

Along with explaining the reasoning behind the high cost of cancer treatment, the report shed light on potential ways to reduce the financial strain. For example, allowing Medicare to negotiate drug prices and allowing the Food and Drug Administration or physician panels to recommend target prices based on a drug's magnitude of benefit might help to bring the cost of cancer drugs down. Other recommendations include:

  • Develop cancer treatment pathways/guidelines that incorporate the cost and benefit of cancer drugs.
  • 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 for the interests of patients with cancer to balance advocacy efforts of pharmaceutical companies, insurance companies, pharmacy outlets, and hospitals.

Source: Kantarjian H, Rajkumar SV. Why Are Cancer Drugs So Expensive in the United States, and What Are the Solutions? Mayo Clinic Proceedings. 2015.

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