Special article
Why Are Cancer Drugs So Expensive in the United States, and What Are the Solutions?

https://doi.org/10.1016/j.mayocp.2015.01.014Get rights and content

Abstract

High cancer drug prices are a worsening trend in cancer care and are affecting patient care and our health care system. In the United States, the average price of cancer drugs for about a year of therapy increased from $5000 to $10,000 before 2000 to more than $100,000 by 2012, while the average household income has decreased by about 8% in the past decade. Further, although 85% of cancer basic research is funded through taxpayers’ money, Americans with cancer pay 50% to 100% more for the same patented drug than patients in other countries. Bound by the Hippocratic Oath, oncologists have a moral obligation to advocate for affordable cancer drugs. In this article, we discuss the high cost of cancer drugs, the reasons for these high prices, the implications for patients and the health care system, and potential solutions to the problem.

Section snippets

Should Cancer Drug Prices Be Determined by Market Forces or by Fair Pricing?

This trend of unaffordable cancer drug prices brought into question the justum pretium, the “just price” (or fair price) of a cancer drug vs “what the market bears.”5, 6 In a New York Times editorial, Paul Krugman7 relates the story of the Middle Ages Crusades to conquer the Holy Land being considered as Deus vult—“God wills it!” Today, the free market (a modern god) will offer, through its forces, the best economic solution—mercatus vult, “the market wills it.” We know today the consequences

Moral and Social Corporate Responsibilities of Pharmaceutical Companies When Establishing Cancer Drug Prices

George W. Merck, onetime president of the large pharmaceutical company Merck & Co. and the son of the founding family, said “Medicine is for the people. It is not for the profits.”14 Dr Rashi Fein said, “Decent people—and we are decent people—are offended by unnecessary pain and suffering; that is, by pain and suffering for which there is a treatment….”15 These views reflected historically the mission and vision of pharmaceutical companies, whose aims were to develop treatments that help

Unaffordable Cancer Drug Prices May Harm Patients

With out-of-pocket expenses of 20% to 30%, the financial burden for a patient with cancer for one drug would be $20,000 to $30,000 a year, nearly half of the average annual household income in the United States (about $52,000 in 2013).4 This financial burden is worse for seniors who rely on Medicare (average annual income per person, $23,500), and these are the individuals who are more likely to have cancers.16 About 10% to 20% of patients may decide to compromise on their therapy or to not

Should Oncologists Be Involved in This Discussion?

Physicians are bound by the Hippocratic Oath, which emphasizes 2 important tenets: protecting patients from harm and injustice both at the personal and social level. High drug prices make them unaffordable and inaccessible, thus causing harm to patients and injustice when differential therapies are applied on the basis of affordability. Oncologists thus have a moral obligation to advocate for affordable cancer drugs.

Justifications for High Cancer Drug Prices—Are the Reasons Offered Valid?

Pharmaceutical companies and their spokespersons routinely justify high prices with 4 arguments: (1) high cost of research and drug development, (2) comparative benefits to patients, (3) mercatus vult—market forces will settle prices to reasonable levels, and (4) controlling prices stifles innovation. We believe that none of the 4 reasons, offered after every protest about the announced shocking price of a new cancer drug, are convincing or ethically justifiable.

First, an objective evaluation

Americans Pay More for Cancer Drugs Than Populations Anywhere Else

The foregoing discussion brings into question the unfair burden of high drug prices paid by Americans vs the rest of the world. Although 85% of cancer basic research is funded through taxpayers’ money (drug companies spend only 1.3% revenues on basic research, net of taxpayers’ subsidies of company research and development costs), Americans with cancer still pay 50% to 100% more for the same patented drug than patients in other countries despite the fact that much of the research is subsidized

Factors That Perpetuate High Cancer Drug Prices

Is there a clear trigger for the recent skyrocketing of cancer drug prices? Influenced by the pharmaceutical lobby, the 2003 Medicare Prescription Drug, Improvement, and Modernization Act introduced legislation that forbade Medicare from negotiating drug prices.28 In addition, the Medicare expansion in 2006 included prescription drug benefits (Medicare Part D). This change resulted in drug companies and distributors being the only parties that decide the prices of the drugs that must be

Possible Solutions

Potential solutions to control and reduce cancer drug prices include the following: (1) allow Medicare to negotiate drug prices, (2) develop cancer treatment pathways/guidelines that incorporate the cost-benefit of cancer drugs (drug “value”), as occurs today in many other countries,41, 42, 43, 44 (3) allow the US Food and Drug Administration or physician panels to recommend target prices based on the magnitude of benefit (value-based pricing), as is practiced in many other developed countries,

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