Oncologists: astronomical cancer drug costs need to come back to earth

With the average price of new cancer drugs having steadily increased to more than $100,000 per year, a group of 118 oncologists released a commentary in the Mayo Clinic’s Proceedings, calling on patients, family members, and health care professionals to join a patient-based grassroots movement advocating against skyrocketing prices for cancer drugs.  The physicians, who state that they are “engaging in contemporary methods to address a contemporary crisis,” are encouraging individuals to join internet and social media campaigns on sites such as Change.org and Facebook to express their support for cancer drug cost control.

Cancer’s costs

According to the physicians, it is estimated that one in three individuals will be affected by cancer in his or her lifetime. Along with threats to physical health, a diagnosis of cancer can also pose serious threats to financial health.  A study in the Journal of Economic Perspectives that examined the cost of cancer drugs found that the average price has increased by 10 percent, or $8500, each year for the past 15 years. A Kaiser Family Foundation study concluded that the out-of-pocket burden on patients is increasing as well,  rising to 20 to 30 percent of the total drug cost. With the average annual gross household income in the U.S. being around $52,000, under such estimates, a patient who needs just one cancer drug costing $120,000 a year, will have to foot a bill as high as $25,000 to $30,0000. The physicians argue that such patients face a terrible choice of foregoing potentially life-saving treatments or paying for household essentials such as food and housing. This difficult choice may be more commonly faced by senior citizens, who are more likely to face cancer and have restricted incomes. Pointing to estimates that 10 to 20 percent of all cancer patients forego prescribed treatments due to the costs, the physicians argue that this cost conundrum is “a structural disincentive for compliance with some of the most effective and transformative drugs in the history of cancer treatment.”

 Drug price negotiation

The physicians point to the 2003 Medicare Prescription Drug, Improvement, and Modernization Act prohibition of a Medicare negotiating drug prices as responsible for making drug companies the sole decision makers in setting cancer drug prices. As we recently reported, a study has suggested that Medicare Part D could be savings billions if it had price negotiating power. The physicians see no relief in sight as drug companies keep raising the prices of medications. As a result, the physicians question whether cancer drug prices are based on a reasonable expectation of investment return, or, rather, based on what the market can bear.

New drugs

The physicians point out that 900 new drugs are under development, including many for the treatment of rare cancers, which is a rate of development faster than ever seen in the past. However, they argue, the current pricing system makes drugs unaffordable for many patients.


The group made several recommendations for improving the cancer drug pricing system:

(1) A post-approval review process should be established that proposes fair prices for the treatments that are based on the “value to patients and health care”;

(2) Medicare should be allowed to negotiate drug prices;

(3) Allow the Patient-Centered Outcomes Research Institute (PCORI), created by Section 6301 of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148), and similar organizations to consider the prices of new treatments in assessing their value;

(4) Individuals should be permitted to import cancer drugs for personal use;

(5) Legislation should be passed that prevents drug companies from delaying generic drug access;

(6) The patent system should be reformed to make unnecessarily prolonged product exclusivity more difficult; and

(7) Organizations that represent cancer specialists and patients should be encouraged to consider the overall value of drugs and treatments when formulating guidelines for treatment.

The group is hoping that, with proper support, pharmaceutical companies will focus on the problem and elected representatives can advocate for their “most important constituents among the stakeholders in cancer—American cancer patients.”