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Study Finds Oncology Drug Pricing Models ‘Not Rational’

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Key Points

  • Cancer drug prices are rising faster than the prices in other sectors of health care, and the annual cost of a new oncology drug now routinely exceeds over $100,000.
  • There was no difference in the median price per year of treatment between the 30 next-in-class drugs and the 21 novel drugs approved over the past 5 years.
  • There was no significant relationship between cancer drug cost and the percentage improvement in survival endpoints.

A statistical analysis of 51 oncology drugs approved by the U.S. Food and Drug Administration (FDA) between January 1, 2009, and December 31, 2013, has found that cancer drug prices are rising faster than the prices in other sectors of health care and that the high cost of the drugs is not justified due to their limited efficacy. The results, according to the study, suggest that current pricing models are not rational, but are a reflection of what the market will bear. The study by Mailankody et al is published in JAMA Oncology.

Study Methodology

The researchers identified 51 drugs in oncology for 63 indications approved by the FDA from January 1, 2009, to December 31, 2013, during which time nine drugs received more than one approved indication. The drugs were approved based on improvements in overall survival, disease response rate, or progression- or disease-free survival. The cost of a full course or 12 months of treatment was estimated from the average wholesale price obtained from the most recent edition of Red Book Online, which lists drug-pricing information.

Of the 51 drugs approved, 21 (41%) used a novel mechanism of action, while 30 (59%) are next-in-class drugs. Among 63 unique indications for approval, 22 drugs (35%) were approved based on response rates, 22 (35%) were based on progression-free survival, and 19 (30%) were based on overall survival. There was no difference in the median price per year of treatment between the 30 next-in-class drugs ($119,765) and the 21 novel drugs ($116,100; P = .42).

Study Findings

The researchers found that drugs approved based on disease response rate were priced the highest, with median costs per year of treatment of $137,952. This was greater than the price of drugs approved on the basis of overall survival (median cost = $112,370; P = .004) and drugs approved on the basis of progression-free survival (median cost = $102,677; P = .002).

The researchers evaluated for a relationship between the percentage improvement in progression-free survival or overall survival and drug price, and found that there was no significant relationship between cost and the percentage improvement in endpoint (progression-free survival, β =214.4; 95% confidence interval [CI] = −42.4 to 471.1; P = .10; overall survival, β = 942.5; 95% CI = 143.0–2028.1; P = .09), and correlation coefficients were low (progression-free survival, R2 = 0.132; overall survival, R2 = 0.165).

“Cancer drug prices are rising faster than the prices in other sectors of health care, drawing concern from patients, physicians, and policy researchers,” concluded the researchers. “We found little difference in the median wholesale price of 21 novel drugs and 30 next-in-class drugs approved over a 5-years period (next-in-class drugs, $119,765; novel drugs, $116,100; P = .42). Our results suggest that the price of cancer drugs is independent of novelty. Additionally, we found little difference in price among drugs approved based on time-to-event endpoints and drugs approved on the basis of [response rate]. Our results suggest that current pricing models are not rational, but simply reflect what the market will bear.”

Vinay Prasad, MD, MPH, of the Medical Oncology Service, National Cancer Institute, is the corresponding author for the JAMA Oncology article.

The study authors reported no conflicts of interest.

The content in this post has not been reviewed by the American Society of Clinical Oncology, Inc. (ASCO®) and does not necessarily reflect the ideas and opinions of ASCO®.


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