[Ip-health] Wall Street Journal: Doctors Object to High Cancer-Drug Prices

Thiru Balasubramaniam thiru at keionline.org
Thu Jul 23 03:47:25 PDT 2015


July 23, 2015 12:01 a.m. ET


They are the latest to target high prices. Members of Congress have
demanded that pharmaceutical companies justify the pricing of hepatitis C
medication, which costs tens of thousands of dollars per patient. Sen.
Bernie Sanders has advised the Department of Veterans Affairs to break the
patents on hepatitis C drugs so that generics companies can manufacture
them more cheaply for ailing veterans.


Amid the growing clamor, cancer medication has drawn particular ire. The
average price of new cancer drugs in the U.S. increased five- to tenfold
over 15 years, to more than $100,000 a year in 2012, according to the Mayo
Clinic journal editorial. Some of the newest therapies, including those
that harness a patient’s immune system to fight tumors, cost about $150,000
per patient a year. A top physician from Memorial Sloan Kettering recently
warned that as doctors prescribe more cancer drugs for use in combination,
the annual price could approach $300,000 per patient a year.

“What we’re fighting is the greed. The greed and the additional maneuvering
that is being exercised after you’ve already recouped what you’ve invested.
There is no control, no regulation,” Ayalew Tefferi, a hematologist at Mayo
Clinic and the first signator on the new editorial, said in an interview.


Yet critics increasingly question whether the industry’s U.S. pricing truly
reflects the value and R&D costs of medication, or simply what the largely
unregulated market will bear. In most other countries, including Canada and
European nations, single-payer health-care systems bargain hard with
pharmaceutical companies, sometimes refusing to pay for drugs they deem
unreasonably expensive. As a result, prices are often far lower in these

The U.S., by contrast, finds it hard to say no. “The U.S. has always taken
a very hands-off attitude, that patients are going to have access to new
medical treatments regardless of the cost,” said David Howard, a professor
of health policy and management at Emory University’s Rollins School of
Public Health. For a big payer like Medicare to refuse to cover a drug
would be “a highly unprecedented situation,” he said.


Some U.S. payers are getting tougher with drug companies, demanding large
discounts and more evidence that drugs are clinically effective enough to
justify their price. They’ve also steered patients and doctors to more
affordable medications by setting lower copayments for cost-effective drugs.

But in their Mayo Clinic editorial, the physicians say much more could be
done to control prices. They recommend allowing Medicare to negotiate
pricing directly with pharmaceutical companies, something the federal
insurance program is barred from doing under a 2003 law. That law leaves
the negotiating to private insurance companies and pharmacy-benefit
managers that administer the Medicare drug benefit—a policy critics say
deprives Medicare of the ability to use its buying power to drive down
prices. The Centers for Medicare and Medicaid Services declined to comment
on the physicians’ recommendation.

The doctors also propose changing U.S. law to allow patients to import
cancer drugs for personal use from other countries including Canada;
reforming the patent system to make it more difficult to prolong product
exclusivity; and using better regulation to prevent branded pharmaceutical
companies from striking any deals with generic-drug companies that would
delay the market launch of lower cost generics. The editorial alsolinks to
a petition seeking signatures in support of the proposals.

Members of Congress and other officials have voiced support for some of
these measures in the past. Sens. John McCain (R., Ariz.) and Amy Klobuchar
(D., Minn.) have supported legislation that would allow consumers to import
prescription drugs from Canada, a proposal that is popular with many
elderly voters. And many Democrats, including President Obama, support
giving Medicare the right to negotiate prices.

Others have called for the pharmaceutical industry to justify rising prices
by disclosing more about its R&D and manufacturing costs. Legislators in
states including California and North Carolina have introduced legislation
recently calling for these disclosures. The California bill calls for a
detailed breakdown of costs including clinical trials, regulatory expenses,
manufacturing, acquisition costs, and others, for drugs that have an annual
wholesale price of $10,000 or more.

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