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Cancer Drug Price Rises Shown Unrelated to Competition

Chemotherapy vials

(National Cancer Institute)

1 November 2017. An analysis of cancer drugs shows their prices steadily increased over 16 years despite competition from newer drugs on the market. The analysis was carried out by researchers in the U.S. and Israel, and appeared in the 10 October issue of Journal of Clinical Oncology.

The team led by cancer specialist Daniel Goldstein at Emory University in Atlanta and Rabin Medical Center in Petah Tikva, Israel, sought to document the the path taken by cancer drug prices after their approval and launch in the U.S. Prices charged for medications, and cancer drugs in particular, are receiving more scrutiny because of their high price tags, with hundreds of thousands of dollars charged for a single course of treatment in some cases. The pharma industry says high cancer drug prices are due to the high costs of developing these drugs, although a recent study questions that claim for some treatments.

Goldstein and colleagues looked at a different factor that should affect cancer drug prices, the role of competition from new entries on the market. The team notes that high price tags on cancer drugs take their toll on patients, citing studies that show high prices are associated with reduced adherence to the drugs and more financial hardship, as well as economic burdens on payers: insurance companies and public health agencies like Medicare and Medicaid.

The authors tracked not only the initial prices for the drugs after their launch in the U.S. market, but also their rise or fall after introduction. Prices for 24 injectable cancer drugs approved by the Food and Drug Administration were tracked from 1996 through 2012, using the average prices published by Centers for Medicare and Medicaid Services in the U.S. Medicare part B covers infusible and injectable drugs administered in outpatient settings and physician offices. In 2014, cancer drugs accounted for 42 percent of Medicare part B spending.

The researchers found prices for these 24 drugs rose by 18 percent over this period, when adjusting the prices for inflation. Prices for two drugs stood out to the team, rituximab and trastuzumab, both synthetic antibodies. Rituximab, approved to treat chronic lymphocytic leukemia and some types of non-Hodgkin’s lymphoma, rose by nearly half (49%) over this period, while trastuzumab used to treat some types of metastatic breast cancer rose almost as much (44%).

The authors also documented the introduction of new drugs that compete with the 24 target drugs during this time, to find the influence of competition on their prices, from data in the CenterWatch and Micromedex drug databases. Those sources report not only new drugs, but new off-label uses for existing drugs. The team employed a statistical linear regression model to compute associations between competition and changes in drug prices.

The results show prices of most cancer drugs increased steadily year after year, in patterns that appear unrelated to the introduction of competition in the marketplace. The authors note that their findings conflict with a similar study conducted last year on oral, not injected, cancer drugs that show more sensitivity to competitive pressures, including the introduction of similar drugs on the market.

The researchers conclude that competitive pressures alone do not seem to influence the rising prices for cancer drugs, and recommend more regulatory scrutiny for drug prices, particularly since Medicare and other public authorities are prohibited from negotiating volume discounts for the drugs.

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