Is the price tag justified for cancer drugs?

February is when cancer messages become more visible, with campaigns explaining how to prevent the disease, treat it, or live with it. And this is largely because the World Health Organization’s (WHO) Cancer Day falls in the first week of this month.

But this time, discussions on the illness received a shot in the arm from a technical report released by the WHO on the pricing of cancer medicines and its impact. And the report says quite simply that the pricing of cancer medicines by drug companies is not justified by their investments in research and development (R&D).

“Overall, the analysis suggests that the costs of R&D and production may bear little or no relationship to how pharmaceutical companies set prices of cancer medicines. 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. This pricing approach often makes cancer medicines unaffordable, preventing the full benefit of the medicines from being realised.”

The report also picks up the realities that patients with cancer, and their families, grapple with. The high cost of the medicine aside, even those who are able to pay are often left with the uncomfortable question of whether the drug did improve quality of life — and for how long.

Returns on research

The report pegs R&D spends at between $200 million and $2.9 billion, after adjusting for the probability of trial failure and opportunity costs. And the return on such investments was assessed through an analysis of sales incomes from cancer medicines approved by the United States Food and Drug Administration, from 1989 to 2017 for the originator companies.

“For the 99 medicines included in the analysis, the average income return by end-2017 was found to be $14.50 for every $1 of R&D spending.”

Äddressing the price to benefit relationship, the report says some targeted therapies did show substantial improvements in health outcomes, such as overall survival and quality of life, and have transformed patient care for several cancer types.

“However, literature indicates that a considerable proportion of targeted therapies approved in the past 15 to 20 years have data only for improvement in surrogate endpoints, such as change in tumour size, without evidence of a benefit in terms of survival or quality of life,” the report says.

The assessment of cancer medicine benefits needs “a comprehensive evaluation of all evidence by combining results across clinical trials and appraising the consistency of evidence in its totality,”the report says.

Big pharma

Large companies making cancer drugs referred to the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA’s) statement, as their response to the WHO report.

The report failed to analyse the unintended negative consequences of its policy recommendations, such as the impact of full price transparency on the capacity of companies to provide preferential prices to developing countries, the IFPMA said.

“It does not appropriately take into account the specificity of different national healthcare systems, particularly between developed and developing countries, and promotes policies that could be detrimental to many countries.”

Further, it says, “It relies on flawed methodology resulting in overstating the return on investment, suggesting that industry achieves a windfall 1,400% return on investment, contrary to a recent report that estimates R&D returns for biopharmaceutical companies have declined to 1.9%.”

The report takes a myopic approach to the assessment of R&D investments, ignoring that revenue from oncology treatments also supports and funds research into other devastating diseases, it added.

India landscape

In India, cancer drugs are largely paid for privately by patients and it causes a great deal of financial stress, says Leena Menghaney, with humanitarian organisation Médecins Sans Frontières or Doctors without Borders.

The report shows that drug pricing has more to do with marketing and distribution than with research and cost of production, she says, adding that developing and developed countries are faced with spiralling drug costs.

India needs a system to technically assess drugs independently so patients have information on their benefits and downsides, she says, citing instances where patients were prescribed three expensive patented drugs in a row, where the benefits are not clear.

An índustry representative counters that global companies have patient access programmes for cancer drugs in India, given the low penetration of insurance. Companies also have an India-specific pricing to make drugs affordable, says the representative.

This discussion being a contentious one, the WHO calls for a realignment of the R&D system, so limited resources are directed towards activities that deliver true innovation and value to patients, efficiently. Half-hearted attempts from Government and industry will only invite public “distrust and disengagement”, concludes the 171-page report.

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