Caitlin Owens, Bob Herman January 25,
2019
Data: Prasad et al.,
2017, “Research and Development Spending to Bring a Single Cancer Drug to
Market and Revenues After Approval”; Chart: Chris Canipe/Axios
The World
Health Organization says the cost of developing new cancer treatments doesn’t
seem to justify those drugs’ high prices, as the pharmaceutical industry
argues.
The big
picture: "The costs of R&D and production may bear little or no
relationship to how pharmaceutical companies set prices of cancer medicines,”
WHO officials said in a recent research
paper.
The report says
new cancer treatments have translated into better survival rates, but that high
prices are the main factor limiting access to those life-saving drugs.
- And it sharply
contradicts the industry’s argument that those prices are necessary to
recoup the cost of developing new drugs — including the money they spend
on products that fail.
- “Pharmaceutical companies set prices
according to their commercial goals, with a focus on extracting the
maximum amount that a buyer is willing to pay for a medicine,” the report
says. “This pricing approach often makes cancer medicines unaffordable,
preventing the full benefit of the medicines from being realized.”
The other
side: “The report is wrong on the facts and deeply flawed,” a
spokeswoman for the Pharmaceutical Research and Manufacturers of America said.
“The report’s narrow scope fails to properly account for the value that cancer
medicines provide to patients, health care systems and societies.”
- And the WHO report does
say that government price-setting doesn’t always work.
- “In some countries, cost-containment
measures ... have resulted in reduced, delayed and even cancelled
treatment,” the report says.
By the
numbers: Even after accounting for failed clinical trials and other
opportunity costs, drug companies saw a median return of $14.50 for every $1
they spent on research and development, the paper says, citing earlier researchpublished
in the Journal of the American Medical Association.
- By the end of 2017, 5 cancer drugs had
each accumulated more than $60 billion in lifetime sales. (The top 3 are
all manufactured by Roche, followed by Amgen and Novartis.)
The report also
questions whether some new drugs are adding value commensurate with
their price.
- A product that extends a patient’s life by
a few weeks or months, for example, means a lot to the patient but perhaps
shouldn’t be priced like a bigger breakthrough.
The bottom
line: “We’re spending a lot, but maybe we should expect more from
those dollars that we’re spending,” said Stacie Dusetzina, a professor at the
Vanderbilt University School of Medicine.
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