Drug Costs: How high can they go?

8532826-a-prescription-pill-bottle-with-rolls-of-cash-in-it--concept-or-metaphor-for-cost-of-drugsPOST SUMMARY:Via the WSJ: The first of a promising new class of cancer drugs went on sale in Japan this week at an average annual cost of $143,000 a patient, a harbinger of hefty prices the new drugs are expected to command in the U.S. and Europe in coming months.  Bristol-Myers, which plans to market nivolumab in the U.S. if the FDA clears it for sale, declined to say how much it will charge. A spokeswoman said the company prices its medicines based on “the value they deliver to patients and society, the scientific innovation they represent and the investment required to support” drug research-and-development.

Higher prices for new cancer drugs have become an increasing concern for patients and their families, who often shoulder high copayments. At the same time, the PD-1 drugs “have the potential to be game-changers for a lot of people” because patients in studies have had “meaningful, long-term responses” to the drugs. PD-1 targeting drugs have shown strong cancer-fighting results in clinical trials.

 

Bristol-Myers, which plans to market nivolumab in the U.S. if the FDA clears it for sale, declined to say how much it will charge. A spokeswoman said the company prices its medicines based on “the value they deliver to patients and society, the scientific innovation they represent and the investment required to support” drug research-and-development. Bristol-Myers has been marketing another kind of cancer immunotherapy, Yervoy, as a melanoma treatment in the U.S. since 2011 at a cost of $120,000 a patient for a standard, complete course of treatment.

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However, new treatments are having an impact. The number of cancer survivors in the U.S. will grow to almost 19 million in 2024, according to a new report from the American Cancer Society. The report says there are currently 14.5 million cancer survivors living in the country. 64 percent of cancer survivors were diagnosed five or more years previously; 15 percent were diagnosed 20 or more years ago. Almost half of all cancer survivors are aged 70 years or older, while one in 20 is under age 40.

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Bringing life-saving drugs to market isn’t cheap – the capitalized cost of bringing a typical drug to market is around $1.2 billion and continues to grow every year. And thanks in no small part to heavy-handed FDA regulations, this cost is slated to keep growing, especially for new, highly targeted medicines for diseases ranging from cancer to type 2 diabetes.

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One thing is for certain, the cost of this new cancer drug, when approved in the US, is going to be front page news and bring more media coverage to an industry very much trying to get back in both patients and HCP’s good graces.

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