You are here

Mayo Clinic Identifies Reasons for High Costs of Cancer Drugs

Company monopolies are part of the problem (Sept. 30)

A virtual monopoly held by some drug manufacturers — partly because of the way treatment protocols work — is among the reasons cancer drugs cost so much in the U.S., according to a September 30 announcement from the Mayo Clinic in Rochester, Minn. Value-based pricing is one potential solution, researchers say.

The findings were published in the October issue of the Mayo Clinic Proceedings.

"Cancer care is not representative of a free-market system, and the traditional checks and balances that make the free-market system work so efficiently in all other areas are absent when it comes to most cancer treatment," said authors Mustaqeem Siddiqui, MD, an oncologist, and Vincent Rajkumar, MD, a hematologist.

For example, when it comes to antibiotics to treat a given infection or over-the-counter painkillers, a physician or patient can choose between multiple drugs that do the same thing. But cancer drugs are administered to patients sequentially or in combination, creating a virtual monopoly for each drug. This is one of the principal reasons for the high cost of cancer therapy.

Other factors include the expense of drug development; the high price that patients and insurers are willing to pay for even modest improvement in outcomes; and a lack of regulations, such as a cost-effectiveness analysis, to account for economic and value-based considerations in the drug approval and pricing process, the physicians write.

Solutions the authors recommend include:

  • Value-based pricing that includes discrete metrics, such as an incremental cost-effectiveness ratio per quality-adjusted life-years (QALYs) gained, as a result of a particular treatment. QALYs are an estimate of the number of years added to a patient's life by a specific drug intervention, adjusted for quality of life.
  • An FDA mandate requiring drug companies to submit a value dossier when seeking drug approval. This information would give patients and physicians the ability to make better-informed decisions about treatment.
  • Centers for Medicare and Medicade Services (CMMS) powers to negotiate payments for cancer drugs.
  • Improved national cancer guidelines providing evidence-based analysis of quality of life, mortality data, benefits, risks, and cost for all possible treatment options.
  • Monopoly rules to determine whether a particular drug will operate in a monopoly situation. Such drugs would be subject to legally mandated or voluntary price controls in exchange for expedited approval or other remedies.
  • Nonprofit generic drug companies to manufacture and distribute generic cancer drugs at a low cost.

For more information, visit the Mayo Clinic Web site.

Recent Headlines

Despite older, sicker patients, mortality rate fell by a third in 10 years
Study finds fewer than half of trials followed the law
WHO to meet tomorrow to decide on international public heath emergency declaration
Study of posted prices finds wild variations and missing data
Potential contamination could lead to supply chain disruptions
Declining lung cancer mortality helped fuel the progress
Kinase inhibitor targets tumors with a PDGFRA exon 18 mutation
Delayed surgery reduces benefits; premature surgery raises risks
Mortality nearly doubled when patients stopped using their drugs