Catalyst for Payment Reform

Do the cost of cancer drugs have you worried? Us too.

Do the cost of cancer drugs have you worried? Us too.

We spend a lot of time at CPR thinking about rising pharmacy prices.  Today, let’s look specifically at cancer drugs. According to the American Society of Clinical Oncology (ASCO), new cancer treatments regularly cost more than $100,000 per year. And cancer drug prices are expected to increase at a rate of 20% per year over the next several years. This is simply unaffordable for many patients. In fact, people with cancer are twice as likely to declare bankruptcy as those who don’t have it.

While clinical oncologists can work to make sure that the right patients get the right drugs at the right time, which minimizes waste, they cannot control prices. How can we enhance affordability without slowing the progress the industry has been making in fighting a growing number of cancers—a danger if drug manufacturers don’t see a strong potential ROI for developing new, potentially life-saving drugs?

ASCO proposes that a diverse group of stakeholders from across health care need to work together to 1) identify, prioritize and test potential solutions to address the affordability of cancer drugs; and 2) help define a standard approach to assessing the value of drugs that can inform pricing and reimbursement.

The price of cancer drugs often bear no relationship to their effectiveness. ASCO believes the price of drugs should reflect the ability to address patient’s medical needs—their clinical effectiveness. One of their recommendations is to push the Food and Drug Administration to prioritize meaningful clinical outcomes in the assessment of drugs, as defined by experts, rather than incremental improvements that in large clinical trials are able to achieve statistical significance.

Various approaches could address the high prices of many kinds of drugs and could work for cancer drugs too, including:

  • Assessing the appropriate use of drugs by providers as a quality measure to help control utilization of high-priced drugs
  • Creating indication-specific pricing that varies the price with how well the drug can address the specific patient’s indication
  • Outcomes based pricing that varies reimbursement based on how a drug impacted patient outcomes, to use of generics and biosimilars
  • Greater transparency for patients and providers on drug prices

For cancer, as well as for other clinical areas, we all need to put our heads together to ensure that patients have access to the drugs they need, without making health care simply unaffordable for all.

Some of these drugs fall into the specialty pharmaceutical bucket, to learn more about specialty pharmaceuticals, CPR developed a guide for purchasers about what they need to know.

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