[Ip-health] FT: Price of cancer drugs vastly higher in US, according to study

Thiru Balasubramaniam thiru at keionline.org
Mon Jun 6 13:14:10 PDT 2016


June 6, 2016 12:43 pm

Price of cancer drugs vastly higher in US, according to study

David Crow in Chicago

Median cost of branded monthly treatment is more than three times higher
than in the UK

The price of cancer drugs in the US is vastly higher than in other nations,
according to new research that shines a light on how the cost of treating
the life-threatening disease differs considerably depending on where the
patient lives.

In the US, the median monthly price of branded cancer drugs, which are
still protected by patents, was almost $8,700, compared with about $2,600
in the UK, $2,700 in Australia and $3,200 in China, according to the study,
one of the largest of its kind.

Researchers looked at the list prices of 23 drugs, eight of which were
protected by patents, including four made by Roche, such as the blockbuster
medicines Herceptin and Avastin, as well as treatments marketed by Eli
Lilly, Takeda, Novartis and Bristol-Myers Squibb.

The study found wide differences in the retail price of drugs across six
countries. The median monthly price of branded cancer medicines in India
was $1,500, while in South Africa it was $1,700.

Generic copies of drugs that have lost patent protection were also more
expensive in the US, according to the study, which looked at the list or
“sticker” price for medicines and so did not factor in the discounts that
big pharmaceutical companies tend to offer.

The research was released on Monday at the American Society of Clinical
Oncologists in Chicago, the world’s largest gathering of cancer experts.
Traditionally, the conference has focused on science rather than cost but
in the past two years, doctors have discussed pricing amid fears that
“financial toxicity” could be hampering the battle against cancer.

Drug prices in the US have also become one of the main issues in the
campaign for the White House, after a string of egregious price hikes by
companies such as Turing Pharmaceuticals and Valeant sparked public outcry.
Donald Trump and Hillary Clinton have each pledged to crack down on costs
if elected president in November, prompting a sharp sell-off of
pharmaceuticals stocks.

US policymakers have long complained that American taxpayers and employers
are subsidising the cost of medicines elsewhere in the world, where many
countries have set up gatekeepers to demand lower prices in exchange for
access to their populations, like the National Institute for Health and
Care Excellence in the UK.

They claim that pharmaceutical companies are taking advantage of the
privatised US healthcare system, where drugs are priced according to what
the market will bear, to extract maximum profits and offset lower margins

“The US represents about 5 per cent of the global population but about a
third of the world’s drug revenue and somewhere between 50 per cent to 70
per cent of the world’s drug profitability,” said Dr Steve Miller, chief
medical officer of Express Scripts, a pharmacy group that is one of the
largest buyers of medicines in the US.

He added: “The US has been spending money to protect the world for decades
— we’re now being asked to essentially fund [the world’s] drug development.”

Steve Ubi, chief executive of Phrma, the trade association for US
drugmakers, said: “The US is subsidising the rest of the world, and we
should use tools like trade agreements . . . to move us to a more level
playing field.”

US officials negotiating the faltering Transatlantic Trade and Investment
Partnership with the EU had attempted to include provisions on drug prices
but the measures were rejected by their EU counterparts.

Roche said that in pricing its medicines, “we strive for the right balance
between ensuring people have access to the medicines they need, while
investing in future breakthroughs”. It also considers “local economic
situations and the unique healthcare needs and systems within each
country”, it said.

Looked at another way, however, the study showed that drugs were more
affordable in the US than some other nations, including developing
countries like India and China.

The study’s authors calculated the median monthly price of branded cancer
drugs as a percentage of gross domestic product per capita at purchasing
power parity (GDPcap), which was 313 per cent in India and 288 per cent in

Fast rising costs stand in way of effective cancer care

“The early introduction of generic medicines and competition in other
countries such as India has proven to help curb skyrocketing drug prices,”
said Tahir Amin, an attorney at IMAK, an advocacy group that challenges
pharmaceuticals patents.

“But in order to achieve this there needs to be a change in how branded
pharmaceutical companies are granted monopoly power, and part of that means
fixing the patent system,” he added.

Cancer drugs were most affordable in Australia and the UK, at 71 per cent
and 78 per cent of GDPcap respectively, but more affordable in South Africa
(157 per cent) than in the US (192 per cent).

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