High Price of Cancer Drugs 'One of Biggest Issues in Healthcare'

Zosia Chustecka

May 23, 2013

In This Article

Shock at High Prices

In the past 10 years, there has been a dramatic increase in the price of cancer drugs, Dr. Kantarjian pointed out.

"If you look at the history of patented cancer drug prices, the average price was about $5000 before 2000.... By 2005, the average drug price ranged from $30,000 to 50,000, and in 2012, nearly all of the new drugs for cancer are priced over $100,000 in the United States," he said.

These recent newcomers include 3 drugs for chronic myeloid leukemia (CML) that were launched in 2012: ponatinib (Iclusig, Ariad) which costs $138,000 per year; omacetaxine (Synribo, Teva), which costs $28,000 for induction and $14,000 for a maintenance course; and bosutinib (Bosulif, Pfizer), which costs around $118,000 per year.

These new drugs "are priced at astronomical levels," the experts write in their paper.

"These high prices were shocking," Dr. Kantarjian added, "especially because I was intimately involved in the development of all 3 of these drugs, and I know that the cost of development of these drugs was not as high as industry claims they are."

The widely quoted estimate of $1 billion for developing a new drug, taking into account the prototypes that fail on the way and infrastructure and salaries, "is a myth," he said. "The true cost is only about 10% of that — around $100 million."

So you can't help but wonder if new drugs could be priced at 10% of their current cost, he added.

In addition, the new CML drugs were entering an already crowded market. They joined 3 other similar drugs already available; the original breakthrough product imatinib (Gleevec, Novartis) was launched in 2001; this was followed in 2010 by the launch of nilotinib (Tasigna, Novartis) and dasatinib (Sprycel, Bristol-Myers Squibb).

Dr. Kantarjian said he argued with the manufacturers of the newer entrants about the high prices. He explained to them that they were likely to gain only a very small market share in an already crowded field, and that they could increase their share substantially if they dropped the price. In addition, because these drugs are all broadly similar, hematologists would opt for the cheaper option.

The argument fell on deaf ears, however; no company would budge on the price, he told Medscape Medical News.

Another shock came in January 2013, when the price of imatinib, which had cost around $25,000 a year, suddenly shot up to $90,000 per year. This is despite the fact that the development costs were recouped years ago, and that new indications have since been approved for the drug, increasing sales volume, Dr. Kantarjian reported. There was a huge outcry from both patients and doctors at this price hike, but to no avail.

It was these 2 events that sparked the idea for the paper, Dr. Kantarjian said. He proposed a first draft at a meeting of leukemia experts, and the idea snowballed from there.

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