Strong action needed to curb cancer drug prices
High prices for cancer drugs are harmful to patients. During the past 15 years, the average price of cancer drugs has increased five- to 10-fold to more than $120,000 as of 2014. A recent analysis in the Journal of Economic Perspectives showed prices have risen 10% every year (after inflation). Before 2000, the cost of a cancer drug was $52,000 for each additional year lived; by 2013 it increased to $207,000.
These trends are unsustainable considering the following: Cancer will affect one in three individuals in their lifetime; health plans are forcing significantly higher out-of-pocket expenses; all new approved cancer drugs in 2014 were priced above $120,000 a year; the average annual household income in the U.S. was about $54,000 in 2014.
For a patient who develops cancer and needs one drug that costs $120,000 plus per year, out-of-pocket costs could total $25,000 to $30,000, or roughly half the average household income. This results in major patient and family anxieties, disruption of family lives, hardships and difficult choices on how to spend limited resources to fight cancer. Hardships from high drug prices are even more critical and common among America’s seniors, who are more affected by cancers and often have lower annual incomes. This catastrophic situation is not a rare, unlucky occurrence; it affects millions of Americans and their loved ones, often repeatedly.
One cause for high cancer drug prices can be traced to the 2003 Medicare Prescription Drug, Improvement and Modernization Act, which prevented Medicare from negotiating directly with pharmaceutical companies. Since its implementation in 2006, the law leaves drug companies as the sole deciders on the pricing of new cancer drugs, following approval from the U.S. Food and Drug Administration. It has created a financial bonanza, reflected by the skyrocketing profits and CEO salaries and bonuses in the pharmaceutical sector.
This was not always the case. In 1950, George W. Merck, then president of the drug company that carries his family name, stated: “We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we remember that, they never fail to appear. The better we remember it, the larger they have been.”
For a long time, drug companies followed this principle, fulfilling their social-corporate responsibility and a dual mission of making discoveries that help patients, while still making reasonable profits. Deep and stable market penetration results in the largest number of patients with cancer living longer and taking the drugs continuously. This means significantly better and stable longer-term profits, compared with the short-sighted strategies of “high immediate profits” that harm patients and harm drug companies’ long-term profits. In essence, by doing good, drug companies do well.
Over the past three years, patients and cancer specialists have voiced protests against high cancer drug prices. But little has happened, even though the solutions are obvious. Such ideas include: creating a post-FDA drug approval mechanism to propose a fair price based on value; allowing Medicare to negotiate drug prices; allowing organizations such as the Patient-Centered Outcomes Research Institute, established under the Affordable Care Act, to include drug prices in assessing drug value; allowing importation of cancer drugs across borders for personal use (prices in Canada are often half those in the U.S.); passing legislation that prevents delayed access to generic drugs (called “pay-for-delay”) or prolonging patent protection unnecessarily (patent “ever-greening”).
The failure to achieve progress is because most parties involved in the discussions are part of the for-profit industry and defend their particular interests (drug and insurance companies, pharmaceutical distributors and outlets, hospitals, physicians, even some “patient advocate” networks). The most harmed and least engaged are cancer patients, because they are fighting for their lives and often do not have the luxury of contributing to such advocacy.
Families and friends of people with cancer should take a page from the HIV/AIDS advocacy strategies, which resulted in FDA approval of more than 35 HIV/AIDS drugs that allow individuals to live normal lives because of relatively affordable drug prices ($10,000 to $18,000 a year). A grass-roots movement led by cancer patients, their families and friends fighting high cancer drug prices can accomplish this. A petition protesting the harm of high cancer drug prices should seek to persuade our elected representatives in the federal government to serve the interests of American patients rather than interest groups.
Such a petition—titled “Protest High Cancer Drug Prices so all Patients with Cancer have Access to Affordable Drugs to Save their Lives”—has already been published online at Change.org. Please consider supporting it.