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(Reuters) – The annual price of a newly-launched cancer drug in the United States averaged $283,000 last year, a 53% increase from 2017, according to a new report from U.S. Democratic Representative Katie Porter, a consumer bankruptcy law professor running for re-election in California.
Cancer is the second leading cause of death in the United States, oncology treatments are nearly four times as costly as other therapies and are largely paid for by taxpayer-funded programs like the government’s Medicare plan for people over age 65, the report notes.
Reuters reported in August on the record-high launch prices of new drugs in 2022 versus 2021 – an area that has driven drugmaker profits as they limited year-over-year price increases on existing drugs due to pressure from lawmakers and the public.
This new analysis is a first look at the degree to which cancer drugmakers rely on high launch prices, an area left out of the Medicare pricing limits set out in the Inflation Reduction Act (IRA) signed by U.S. President Joe Biden in August.
The IRA focuses on Medicare price negotiation for older drugs and caps on price increases. It also limits annual out-of-pocket drug costs for beneficiaries to $2,000, which means the Medicare plan will be responsible for costs over that amount.
By law, Medicare is required to cover all cancer medications.
“Launch prices are an important issue and one that is not touched by the IRA,” Stacie Dusetzina, an associate professor of health policy at Nashville’s Vanderbilt University Medical Center who studies drug costs told Reuters. “I do think there is a possibility we see launch prices go up,” she said.
Cancer drugs set to get costlier https://graphics.reuters.com/US-DRUGS/xmpjkgqnrvr/chart.png
Porter, who championed inflation-based caps on drug prices, is calling for additional national legislation to link launch prices to how well a drug works. And, in the case of drugs approved under the Food and Drug Administration’s accelerated pathway, limiting prices until there is sufficient data to show the drugs are effective.
“The trend toward ever higher launch prices is ongoing and accelerating. And I think we should expect it to continue unless we do something about it,” Porter told Reuters.
The Pharmaceutical Research and Manufacturers of America, the drug industry’s main trade group, has maintained that “government price setting has a devastating impact on biopharmaceutical research and development and places an additional barrier between patients and innovative medicines.”
CANCER PILLS ROSE NEARLY 26% IN FIVE YEARS
Many of the newer cancer drugs are biologics that need to be given as an infusion by a healthcare professional, but an increasing number are self-administered pills or tablets.
The report found that the average launch price of a self-administered cancer drug, after adjusting for inflation, rose by nearly 26% to $238,000 between 2017 and 2021.
U.S. cancer drug launch prices in 2017 https://graphics.reuters.com/US-DRUGS2017/akpeqgygjpr/chart.png
U.S. cancer drug launch prices in 2021 https://graphics.reuters.com/US-DRUGS2021/lbpggryrdpq/chart.png
The analysis excluded an ultra-expensive class of treatments called CAR-T, which involve drawing white blood cells from a patient, processing them in the lab to target cancer and infusing the cells back into the patient.
In 2017, the most expensive new cancer tablet was Celgene (NASDAQ:CELG)’s Idhifa at $298,465 a year. Celgene was later acquired by Bristol Myers (NYSE:BMY), which said in 2020 that a study of Idhifa, approved to treat a subset of leukemia patients, failed to show that it improved survival compared to standard care.
No other new drug launched in 2017 had an annual price over $200,000.
By 2022, six out of the eight newly-launched oral cancer drugs had prices over $200,000 per year. These included lung cancer pills such as Takeda Pharmaceutical’s Exkivity at $299,995, Merck KGaA’s Tepmetko at $250,775 and Amgen Inc (NASDAQ:AMGN)’s Lumakras at $214,800.
Based on current trends, the report calculated that by 2026, when Medicare will first be able to negotiate drug prices, the average self-administered cancer drug launch price will be nearly $325,000 per year and over $525,000 for pills and biologics.