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Cancer Care Leaders Demand Drug Pricing Reforms

Tony Hagen @oncobiz
Published: Thursday, Jul 23, 2015

Hagop M. Kantarjian, MD

Hagop M. Kantarjian, MD

A slate of 118 well-known cancer experts have signed their names to a list of recommended drug pricing reforms in hopes of curbing the soaring costs of cancer care and spurring a grassroots movement to combat the trend.

“There is no relief in sight because drug companies keep challenging the market with even higher prices,” the petitioners wrote in a commentary they co-authored in the journal Mayo Clinic Proceedings.

The group is hoping that patients and grassroots groups will step into the breach and advocate loudly for pricing reforms, because doctors, insurance companies, pharmaceutical distributors and many hospitals are often “conflicted” over the issue, the commentary said. It recommends an advocacy movement be modeled after the HIV/AIDs activism of the late 1980s and 1990s, when, with many lives at stake, the gay community and its supporters worked to spur faster drug development and broaden access to promising experimental drugs.

“A cancer patient-based grassroots movement that advocates against the high price of cancer drugs can accomplish a great deal,” the cancer leaders wrote in the Mayo report.

Such support from the patient community could then be “used by advocates, lobbyists, and others to advocate against the aforementioned harms generated by the high price of cancer drugs,” they wrote.

Prominent names attached to the article include Hagop Kantarjian, MD, of the University of Texas MD Anderson Cancer Center; S. Vincent Rajkumar, MD, of the Mayo Clinic; and Laurence Baker, DO, of the University of Michigan Health System.

Among their recommendations, the group suggested that fair price proposals be incorporated into FDA drug approval reviews; Medicare receive the power to negotiate drug prices; importation of cheaper drugs from abroad be allowed; and legislative means be employed to stop drug companies from stalling the introduction of cheaper generics into the US market.

Other recommendations include changing the patent system so that it cannot be used to extend product exclusivity; encouraging the incorporation of drug and treatment costs into treatment guidelines; and, lastly, allowing the Patient Centered Outcomes Research Institute, which evaluates the benefits of new treatments, to include drug prices in assessments of treatment value.

“High cancer drug prices are affecting the care of patients with cancer and our healthcare system,” lead author Ayalew Tefferi, MD, a hematologist at Mayo Clinic, said in a press statement. “The average gross household income in the US is about $52,000 per year. For an insured patient with cancer who needs a drug that costs $120,000 per year, the out-of-pocket expenses could be as much as $25,000 to $30,000—more than half their average household income.”

Average annual cancer drug prices reached more than $100,000 in 2012 after soaring $8500 a year on average, according to a 2015 study that was cited in the journal article. Changing trends in insurance coverage now leave patients with out-of-pocket costs of as much as 20% to 30% of their cancer treatment costs, the report said.

This leaves many patients, particularly senior citizens who are on fixed incomes, in the position of having to make hard decisions about what to spend their limited funds on and what to do without. The group said families are sometimes going without treatment so that they can afford necessities such as food, housing, and education; and in some cases individuals are liquidating assets to pay for what they consider necessary, they said.

Medicine is often the item that is sacrificed, they said. “It is documented that the greater the out-of-pocket cost for oral cancer therapies, the lower the compliance. This is a structural disincentive for compliance with some of the most effective and transformative drugs in the history of cancer treatment.”

The physicians and others signing the demand for pricing reforms said drug costs are soaring so high and so fast that it is debatable whether manufacturers are pricing according to development and production cost or according to “what prices the market can bear.”

They said they are willing to allow drug manufacturers to earn a reasonable profit on their products, and they noted that there are many effective new drugs that are under development. “The unfortunate news, also acknowledged by some of the pharmaceutical leadership, is that the current pricing system is unsustainable and not affordable for many patients.”

The group described its list of recommendations, many of which have been suggested by others, as being practical and capable of implementation.

“Although some economic experts lament the difficulty of finding solutions, simple and measured incremental actions can improve the situation and allow market forces to work better,” they wrote.
 
In other remarks, they argued that the per-capita benefit from healthcare spending in the United States is inferior to what those in various other industrialized nations receive—even though US spending on healthcare is very high.
 
“In the United States, healthcare is delivered in a profit-driven marketplace that commands 18% of our gross domestic product, compared with 4% to 9% in other industrialized nations. Despite the 2- 3-fold higher spending per capita, the United States is not “number 1” in health care parameters compared with other industrialized nations that spend far less per capita. Rather, the United States often ranks well below average in several comparative studies that assess a number of measures of healthcare quality,” the group report said.

Howard DH, Bach PB, Berndt ER, Conti RM. Pricing in the market for anticancer drugs. J Econ Perspect. 2015; 29(1):139-162.



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