Row over US drug prices flares up again

The affordability of medicines has hit the headlines once again after a 60 Minutes show aired in the US suggesting cancer doctors are in open revolt about the cost of cancer drugs.

The 60 Minutes programme – which featured as the video of the week on pharmaphorum’s Facebook page – did not really cover much new ground, but has brought the polarised debate on drug pricing into sharp focus.

Gastrointestinal oncologist Leonard Saltz of the Memorial Sloan Kettering Cancer Center told the programme that a cancer diagnosis is now “one of the leading causes of personal bankruptcy” in the US, suggesting that the term “financial toxicity” is now being used to describe another side effect of drug therapy.

Saltz pointed out that new cancer drugs typically cost $100,000 a year – and are added onto the existing cost of therapy so the price can be $250,000 “just to get started – which he believes is too high even when the high cost of developing new therapies is taken into account.

Saltz rose to prominence in the pricing debate in 2012 when he directed Memorial Sloan Kettering to use Roche’s Avastin (bevacizumab) off-label in place of Sanofi’s Zaltrap (aflibercept) for treating colon cancer because it was half the price and seemed equally effective.

Sanofi reduced the price of its drug – via a physician rebate – shortly afterwards, although as this approach did not reduce any out-of-pocket expenses for patients another outcry ensued, and eventually a price reduction was implemented across the board.

Picking up on the theme, Memorial Sloan Kettering’s Peter Bach tells the show’s presenter Lesley Stahl that it is untenable that unlike just about every other country in the world the US does not negotiate the price of drugs with manufacturers.

“We have a pricing system for drugs which is completely dictated by the people who are making the drugs,” adds Bach, who says pricing policy is often down to “corporate chutzpah” as the FDA does not take pricing into consideration when reviewing a new medicine.

That is not to say that pricing is not a hot topic in Europe as well, with the European Commission recently saying that while it has serious concerns about the affordability of new therapies it has limited powers to intervene.

Insurance companies and wholesalers in the frame

Fingers were also pointed in the programme about the mark-up enjoyed by private practice oncologists when they prescribe drugs – bought from drugmakers at wholesale prices – to patients at the retail price.

Giving the pharma perspective, John Castellani of the Pharmaceutical Research and Manufacturers of America (PhRMA) said the impact on patients of prices is inflated by the insurance companies’ policy of requiring co-pays of 20% on medicine costs, and the costs of new medicines.

Comments on pharmaphorum’s Facebook page reveal how heated the debate has become. Cancer patient advocate Jack Whelan said the 60 Minutes show was: “an incredible political statement against free enterprise, using a justifiably sad emotional response about the cost of cancer drugs.” He said the programme offered no solution except “let the government fix it.”

Another commentator queries why – as discussed in the programme by leukaemia specialist Hagop Kantarjian of MD Anderson Cancer Centre – the price of Novartis’ cancer drug Gleevec has tripled since its first launch.

A commentary written by Forbes’ columnist Matthew Herper points out that there are good reasons why some drugs are so expensive – developing new medicines is an expensive business and without profits new medicines will not be developed – but argues that pharma has to start dealing with the affordability issue before matters are taken out of their hands.

The chief executives of some companies – notably Novartis’ Joe Jimenez – are acknowledging there is a problem that needs to be addressed, says Harper, who points out that while some new drugs may be worth $100,000 a year, that should not be a default setting for any new cancer therapy.

Either way, the issues raised by 60 Minutes seem to be striking a chord among oncologists. A statement issued by the American Society of Clinical Oncology (ASCO) commended the programme for raising awareness of the “fast-rising costs of cancer drugs.”

“We believe that the value proposition must take into account the combination of treatment benefits, side-effects and costs as different treatment options are considered by patients and their physicians,” it says.

ASCO is developing a tool which it says doctors will be able to use with patients in daily clinical practice to assess and discuss the relative value of treatment options.

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