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Forward Look

The Impact of Rising Drug Costs

Higher prices of oral medicines may affect financial well-being. By Chris Palmer

Cancer drugs taken by mouth cost considerably more in their first year on the market after adjusting for inflation than oral cancer drugs launched 15 years ago. In addition, many older drugs are seeing yearly cost increases. These increases can contribute to the financial hardship that often follows a cancer diagnosis.

 
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A study published in JAMA Oncology in July 2016 found the average monthly cost of newly approved oral cancer drugs adjusted for inflation grew from $1,869 in 2000 to $11,325 in 2014. That year, prices for some recently approved oral drugs, including Lynparza (olaparib), used to treat ovarian cancer, and Zykadia (ceritinib), used to treat a type of lung cancer, exceeded $12,000 per month. Health insurance often covers most of the cost of these drugs, but some health plans require patients to pay a fixed percentage of the total cost of each drug. (For a $12,000 drug, a fixed 10 percent co-pay would require a patient to pay $1,200.)

“Right now, there’s no legal accountability,” says Stacie Dusetzina, a pharmacoepidemiologist at the University of North Carolina at Chapel Hill who carried out the study.

The prices of older oral cancer drugs often rise to match the prices of new drugs, Dusetzina says. Gleevec (imatinib), for example, cost $3,346 a month when Novartis first introduced it in 2001. Over the next seven years, two competing drugs, also taken by mouth, were approved: Sprycel (dasatinib), priced at $5,093 a month, and Tasigna (nilotinib), priced at $6,608 a month. By 2014, all three drugs were priced at about $8,300 a month. Asked about Gleevec’s price, a Novartis spokesperson says the increase represents the company’s commitment “to a consistent level of research and development spending.”

A study led by Scott Ramsey, director of the Hutchinson Institute for Cancer Outcomes Research in Seattle, published in Health Affairs in May 2016 found that each time a cancer drug already on the market was approved to treat another type of cancer, its price went up an average of nearly 10 percent. Ramsey says a cancer drug’s price also tends to increase a few years before the patent expires.

Previous studies have found that about 40 percent of cancer patients face severe financial distress. To pay for cancer medications, “people are mortgaging their homes, using up all their assets or borrowing money from friends,” says Ramsey. “It’s a terrible burden.”

Financial hardship may also lead patients to take less than the prescribed amount of medication or completely avoid filling prescriptions. Dusetzina’s research on Gleevec suggests that some patients with high out-of-pocket costs begin skipping doses or not filling prescriptions just six months after their cancer diagnosis.

Pending legislation that would allow the federal government to aggressively negotiate with drug companies and deny coverage for expensive drugs that are not more effective than cheaper alternatives could help control costs, Ramsey says. But though this bill might lower prices, it would also limit the availability of certain drugs. “That’s something patients in the U.S. have historically had a hard time with,” adds Ramsey. “[But] at some point we have to decide as a society how much we want patients to have to spend on their care.”

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