Even When Adjusting for Improved Survival, Newer Cancer Drugs More Expensive Than Older Ones

August 2014 Vol 7, Special Issue ASCO 2014 Payers' Perspectives in Oncology
Wayne Kuznar

Even after adjusting for improved outcomes, newer anticancer drugs are more expensive than older agents, said Rena Conti, PhD, Assistant Professor of Health Policy and Economics, University of Chicago, at ASCO 2014.

This conclusion came from an examination of the prices of 56 anticancer drugs approved between 1995 and 2013. The analysis measured the launch prices of the drugs using Medicare prices for oral and intravenous drugs, and adjusted the price (in 2013 dollars) based on survival data obtained from phase 3 clinical trials. For drugs approved on the basis of single-arm trials, modeling studies were used to estimate the survival benefit. The prices of the drugs represent the cost of a course of therapy based on the median duration of treatment in the clinical trials submitted to gain approval.

“The reason we did this study was to examine exactly how and if the launch prices of these were increasing at a rate over and above inflation, and also over and above their benefit in terms of survival,” said Dr Conti.

For each drug, the annual price of additional survival was calculated as the price per course of therapy divided by the survival benefit in years.

The average drug price in the sample was $78,600, and the average survival benefit was 0.45 years. Therefore, the average annual price of survival benefit was $185,000.

“We found that drug prices, after adjusting for survival, appear to be going up approximately 5% to 7% per year over time. These are inflation-­adjusted prices,” she said. “The only other consumer goods that we see that have this type of price trajectory appear to be luxury products, such as art and jewelry, but also college tuition.”

The price of an additional month of survival increased by $600 annually, Dr Conti noted. The model predicted that the launch price of a drug that extended median survival by 5 months would be $37,000 in 1995, but the same drug launched in 2010 would have been $84,000. A sensitivity analysis found no change in the results when controlling for side effects or quality of life.

Manufacturers are pricing their anticancer drugs as high as the market is willing to bear, with little pushback from insurers, hospitals, or physicians, Dr Conti said. “These are list prices,” she pointed out. “It reflects what insurers will pay, and also what patients will pay for these therapies. This is not what physicians, hospitals, and pharmacies pay to acquire these drugs, and we believe that there are quite substantial discounts in the marketplace for these therapies that are then baked into the list price over time.”

Expansion of the 340b drug pricing programs, which requires manufacturers to give discounts to eligible buyers, may have contributed to price increases for noneligible buyers, she added.

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Last modified: August 21, 2014
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