There are some great new cancer drugs. Too bad we can’t afford them.

Although my advanced prostate cancer hasn’t yet progressed to become castration-resistant prostate cancer (CRPC), there’s a good likelihood that it will at some point. So, I’m grateful that the FDA has approved a panoply of new drugs and treatments over the past five years to prolong the lives of men with CRPC.

It’s quite a variety. Jevtana is chemotherapy. Provenge activates the immune system to fight off the spread of cancer. Oral drugs, such as Zytiga and Xtandi, cut off sources of testosterone to halt cancer growth. The newest one, Xofigo, works to reverse the bone metastases that almost always accompany CRPC.

expensive_pillsThe arrival of these new drugs is good news indeed. With one enormous caveat: the drugs’ exorbitant price tags. A course of Jevtana costs about $50,000. Provenge immunotherapy is $93,000. Zytiga costs $5,000 per month; Xtandi $7,000. According to its maker, Xofigo will be in the same price range as Jevtana.

So, it’s worth asking: why are cancer drugs so expensive?

The prices of drugs are not set in stone. The government does not regulate them. Rather, prices are determined by pharmaceutical companies, which justify high costs as the only way to recover their enormous investments in R&D—much of which is spent in the lengthy clinical trials process. While there’s no question that pharmaceutical companies need to make a decent return on their investment, the actual story behind drug pricing is more complicated.

One industry defender asserts, “For one thing, competition works wonders in pricing.  As an example, I believe that the spate of new drugs to treat cancer that will be available in the coming years will result in lower costs” [1].

This prediction hasn’t yet been realized. If drug marketing operated in the normal competitive environment predicted above, we would have expected that the recent introduction of Xtandi—a direct competitor to Zytiga, introduced a year earlier—to result in lower prices for both, as they fought for market share. However, Xtandi’s maker, Medivation, priced their drug $2,000 per month higher than Zytiga.

In 2011, Andrew Kay, the chief executive of Algeta, the company that developed the latest CRPC drug, Alpharadin (now marketed as Xofigo) told the New York Times, “The pricing environment is encouraging and getting better for us,”[2].  He went on to say that his company originally planned to price a course of Xofigo at about $25,000. But after observing that its competitor, Jevtana, costs about $50,000, his company was considering pricing the new drug much closer to Jevtana.

As economists might put it, “high drug prices provide a pricing umbrella for other high priced drugs.”

In a 2010 article in the The Oncologist, Patricia M. Danzon and Erin Taylor identify one big reason why competitive pricing theory doesn’t work in the cancer pharmaceutical market: “Our current insurance reimbursement and cost-sharing arrangements for cancer drugs creates incentives for manufacturers to set relatively high prices and for plans to shift more costs to patients” [3].

As a solution, the authors recommend, “If payers evaluate comparative effectiveness and cost-effectiveness and make such information available to physicians and patients, this would enable more informed decision making.”  This sounds good in theory, but absent a stronger and enforceable prod to the pharmaceutical industry, it’s unlikely to be implemented anytime soon.

Besides, if you happen to have health insurance or Medicare that includes coverage for cancer drugs, you probably won’t notice the cost. Why should we patients care if insurance or Medicare ponies up $25,000 or $50,000?

We need to care because the population of aging baby boomer men means greater numbers of CRPC patients lurking just over the horizon. This demographic reality will only increase demand for these expensive cancer drugs—which may also explain why so many pharmaceutical companies are eagerly pursuing the CRPC treatment market. (And there’s nothing unique about prostate cancer.  The same forces are at work across the entire spectrum of cancer drugs.)

At some point rising demand will cause some government official somewhere in the Medicare bureaucracy to notice that too much money is being spent on extending lives of old men dying of prostate cancer. In light of unrelenting pressure to reduce Medicare costs, I believe this day will come sooner rather than later. And it’s pressure that will only increase as the Affordable Care Act (ACA) is implemented over the coming years.

So, do we simply deny men with CRPC access to these drugs?  Should we impose age cutoffs, asserting that only “younger men” (however that’s defined) should have access?

Or will cancer drugs become some kind of unachievable Holy Grail to the majority of men who are neither rich nor covered by insurance?  Will we see the emergence of a “1%” of cancer patients mirroring the growing disparity of wealth?

What’s the solution? Do we ration these drugs via lottery?  Do we figure out how to reduce the cost and length of clinical trials, perhaps by using different end points than “overall survival” which requires the patients in the trial to die first?

Or should we patients, doctors, insurance companies and government policy-makers behave as rational consumers and say to the pharmaceutical industry, “OK, We’re just not paying your ridiculous prices any more.  We know we may not get all these wonderful new therapies in your pipeline as soon as we like, or maybe even ever.  We’re willing to take our chances with what we have already.”

That would take some courage.  But change only happens when courageous people act.

What would you do?  What should I, as a cancer patient, do?


  1. says

    Thanks, Craig, for raising this issue. The challenge is to drive the waste and unnecessary costs of health care out of the system so there’s ample money for stuff that really does work. See the latest from the NY Times
    And then there are all the prostate cancer “improvements” that cost vastly more money but have no better outcomes than cheaper therapies. Did I mention proton beam therapy?

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