The World Health Organization says the cost of developing new cancer treatments doesn’t seem to justify those drugs’ high prices, as the pharmaceutical industry argues.
The big picture: "The costs of R&D and production may bear little or no relationship to how pharmaceutical companies set prices of cancer medicines,” WHO officials said in a recent research paper.
The report says new cancer treatments have translated into better survival rates, but that high prices are the main factor limiting access to those life-saving drugs.
- And it sharply contradicts the industry’s argument that those prices are necessary to recoup the cost of developing new drugs — including the money they spend on products that fail.
- “Pharmaceutical companies set prices according to their commercial goals, with a focus on extracting the maximum amount that a buyer is willing to pay for a medicine,” the report says. “This pricing approach often makes cancer medicines unaffordable, preventing the full benefit of the medicines from being realized.”
The other side: “The report is wrong on the facts and deeply flawed,” a spokeswoman for the Pharmaceutical Research and Manufacturers of America said. “The report’s narrow scope fails to properly account for the value that cancer medicines provide to patients, health care systems and societies.”
- And the WHO report does say that government price-setting doesn’t always work.
- “In some countries, cost-containment measures ... have resulted in reduced, delayed and even cancelled treatment,” the report says.
By the numbers: Even after accounting for failed clinical trials and other opportunity costs, drug companies saw a median return of $14.50 for every $1 they spent on research and development, the paper says, citing earlier research published in the Journal of the American Medical Association.
- By the end of 2017, 5 cancer drugs had each accumulated more than $60 billion in lifetime sales. (The top 3 are all manufactured by Roche, followed by Amgen and Novartis.)
The report also questions whether some new drugs are adding value commensurate with their price.
- A product that extends a patient’s life by a few weeks or months, for example, means a lot to the patient but perhaps shouldn’t be priced like a bigger breakthrough.
The bottom line: “We’re spending a lot, but maybe we should expect more from those dollars that we’re spending,” said Stacie Dusetzina, a professor at the Vanderbilt University School of Medicine.