'Socially Owned' Cancer Drugs Proposed in US

A Solution to Runaway Prices?

Nick Mulcahy

August 22, 2019

A publicly funded cancer drug industry in the United States could develop new drugs and own the resulting products, allowing for lower prices and greater equity in treatment than the current private-industry model. This is the novel idea proposed in an essay published online July 18 in JAMA Oncology.

Spiraling cancer drug prices are "unsustainable," writes Ian Neff, MS, and PhD candidate, Oregon Health & Science University–Portland State University School of Public Health.

Thus, "the question is not whether to control prices but how," he argues.

Neff says that there are three "main avenues of regulation" that can reduce cancer drug prices: establishing price ceilings, getting rid of patent protection, and replacing for-profit drug research.

Neff says the first two ideas are flawed.

Price ceilings (ie, capping prices at an affordable level) would allow more patients to access treatments, but have the shortcoming of reducing profits and thus money for further research. That's not a good option for cancer, which needs a lot of research funding, suggests Neff.

Abolishing patent protection is unlikely to strongly spur price reform, says Neff. And that's not because it would kill the incentive to innovate. Currently, drug companies often invest in new products "that mimic existing drugs" rather than in risk-taking, he says. Patents are not quite the tool we think they are, he suggests.

The third idea is Neff's winner.

Developing cancer drugs, he says, could be transferred from the pharmaceutical industry to the public sector.

The idea currently has logistical and popular support, he says.

"The National Cancer Institute and public universities already generate much of the basic research on which drug developers rely," writes Neff.

Further, "over 70% of Americans support increasing federal spending on cancer research, even if it adds to the deficit or raises taxes," he says, citing a 2017 public survey funded by the American Society of Clinical Oncology.

Phasing out the pharmaceutical industry would be an economic boon for cancer patients, he says. "Eliminating expenses from advertisement, executives, and shareholder profit could make socially owned drugs affordable to any patient," Neff writes.

A major criticism of his proposal, he envisages, is that "eliminating the profit motive will disincentivize the best and the brightest from researching cancer treatments."

Neff argues that people in white lab coats — and not those with white collars — will be the ones rewarded in the new scheme.

"The chief executive officers and shareholders who benefit most from windfall profits are not the scientists making life-saving breakthroughs," he writes. "We should recognize researchers who benefit humanity, but we should reward scientists rather than executives."

Such a system would be a first, Neff told Medscape Medical News. "I'm not aware of any countries or regions with socially funded and owned R&D," he said in an email.

Americans "ought to insist on a more just pricing system," he argues.

Neff concludes his essay with great optimism: "Social investment in cancer treatment would be politically popular, remove the profit-driven misalignment of research priorities, and promote both equity and innovation in cancer care."

What does the drug industry think of Neff's idea? Medscape Medical News asked the Pharmaceutical Research and Manufacturers of America (PhRMA) to comment via email.

Andrew Powaleny, PhRMA spokesperson, responded with a series of statements about the biopharmaceutical industry, some of which were cancer specific. Last year, new drugs to treat prostate, breast, and lung cancers were approved by the Food and Drug Administration as part of a wider record-setting year in terms of novel new medicine approvals.

The pharmaceutical industry is "significantly responsible for developing new medicines," stated PhRMA. For example, 58% of drug discovery milestones and 73% of development milestones came from the private sector, according to a 2016 study. PhRMA does not want to "focus on policies that could chill innovation or reduce patient access."

Ten Years Ago: A Radical Proposal, Now Mainstream

The high price of cancer drugs has been of huge concern for some years now, which even some drug company executives have acknowledged.

Ten years ago, Medscape Medical News reported a chorus of experts complaining about the price of cancer drugs, especially for agents with marginal benefits.

"There is a shocking disparity between value and price, and it's not sustainable," said Roy Vagelos, MD, at the time. In 2009, Vagelos was the chief executive officer at Merck and chair of two biotech companies, Regeneron and Theravance.

At that time, in an essay published in 2009, Tito Fojo, MD, PhD, of the National Cancer Institute, and an academic colleague proposed that the United States adopt a spending threshold for cancer drugs — akin to the way the United Kingdom pays for cancer drugs within the National Health Service.

The proposal, which pegged reimbursement to performance, was so provocative that Fojo, who is now at Columbia University in New York City, told only his wife — and not any colleagues at the NCI — about its inclusion in the essay.

Today, that concept of value-based pricing for cancer drugs is hardly radical and is much discussed.

Earlier this year, when Medscape Medical News again reported on the high price of cancer drugs, another American clinician summarized the current state of affairs, which sound a lot like the state of affairs 10 years ago. However, Erin Aakhus, MD, Division of Hematology-Oncology, Perelman School of Medicine at the University of Pennsylvania in Philadelphia, also said that the issue of financial toxicity of cancer drugs is becoming more pressing.

"This is a topic that's been warming up in the oncology community for a while now, and in the United States, we've have a lot of interest in this from both the patient advocacy side and the pharma side for reimbursement of expensive new oncology drugs," she told Medscape Medical News. "This is a controversial topic. The costs of new treatments are going up at a very high rate...It's a marvelous time in oncology, but overall, the cost of caring for the population is getting really out of control."

Neff has disclosed no relevant financial relationships.

JAMA Oncol. Published online July 18, 2019. Essay

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