CRANBURY, N.J.--(BUSINESS WIRE)--Rising drug prices continue to vex consumers and policy makers alike, yet few understand how prices are set. A study just published in The American Journal of Managed Care® asks yet another question in this debate: why are cancer drugs so much more expensive than others?
Inmaculada Hernandez, PharmD, PhD, and her co-authors pursue this question through an interesting lens: they studied the prices of all monoclonal antibodies approved by the US Food and Drug Administration between 1997 and 2016. The term “monoclonal antibody” might not be well-known to the average consumer, but most Americans know a few brand names of these manufactured proteins, designed to take aim against their targets in the body.
The idea for monoclonal antibodies was first conceived more than a century ago, with the objective of directing a toxin against syphilis. But the drugs gained traction in the 1980s when scientists developed a “human” antibody that did not produce so many harsh side effects. Some of the best-known specialty drugs on the market today—Humira for rheumatoid arthritis, or Avastin for many types of cancer—are monoclonal antibodies. So are PCSK9 inhibitors, the powerful drugs to fight cholesterol that gained notice with their $14,000-a-year price tags.
Controlling for routes of administration, time on the market, and even their chemical structure, Hernandez and her co-authors made an interesting discovery: while monoclonal antibodies might all work the same basic way, the ones that fight cancer cost about $100,000 more per year to use. The median price for oncology and hematology drugs was $142,833 per year, followed by immunology drugs (median, $53,969). After adjusting for multiple factors, the annual price of cancer drugs was $149,622 higher than those used for cardiovascular or metabolic disorders and $128,856 higher than those used in infectious disease.
The authors had some thoughts on these pricing patterns: To recover development costs, “manufacturers set higher prices for drugs used for a short period of time or for drugs indicated in rare conditions,” they wrote. For example, the most expensive drug in the study, which has an annual price of $600,000, was originally developed for a disease that affects only 5,000 patients in the United States.
“Duration of treatment is usually shorter in cancer, where drugs are commonly used for weeks or months, than in other disease states where drugs may be used for years,” they wrote.
Finally, in cancer, patients and clinicians have fewer options for treatment—so price may be less of a deterrent. Moreover, policies that require Medicare Part D plans to pay for all cancer drugs feed this behavior, the authors suggest.
“As the prices of prescription drugs and particularly, of specialty drugs, continue to grow, it will be especially important to implement some value framework where pharmaceutical prices are justified on the benefits they bring to patients,” said Hernandez.
About The American Journal of Managed Care®:
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