Mayo docs join the revolt against rising cancer drug prices

Anyone who follows the pharma industry knows just how much cancer drug prices have increased as of late--Mayo Clinic oncologists among them. And they've got their own ideas on how to turn that around, though they're not necessarily ideas pharma would favor.

In a new paper, a group of Mayo cancer docs note that the average cost for a year of cancer therapy had soared to $100,000-plus by 2012. Before 2000, the average yearly price was $5,000 to $10,000, the Mayo oncologists say.

And then the docs take aim at the reasons drugmakers use to explain their meds' high costs. Expensive R&D? They're not buying it. And the well-worn argument that price controls stifle innovation isn't enough to justify such huge increases in drug costs, they say. 

S. Vincent Rajkumar

Then there's the argument that the free market will work its magic on cancer drug prices, just as it does for other products. The way Mayo Clinic Cancer Center's S. Vincent Rajkumar sees it, oncology drugs "actually represent a monopoly for the large part," he said in a companion video to the paper.

Patients with pneumonia have many antibiotics to choose from, and if one of them works, they don't need the others. "There's genuine competition, and that keeps prices low," he figures. But with cancer meds, "if a particular cancer has 5 drugs that can be used to treat, the fact that you use one drug does not mean that the other four are not necessary," he said.

Often, cancer meds are used in sequence; one works for awhile, and then patients have to move on to another--or a couple of others--to keep getting results. And in that situation, each drug "really represents a monopoly," Rajkumar says.

So what do the paper authors want to do about it? Their solution is multifold, and includes some of pharma's least-favorite buzzwords. Value-based pricing--a la Germany's IQWiG and the U.K.'s NICE--is a big one. Eliminating pay-for-delay schemes and allowing Medicare to negotiate drug prices are also on the list.

But as the pharma industry has seen more and more lately, if it doesn't do something to curb high prices, other players are going to take matters into their own hands. In 2012, three doctors at Memorial Sloan-Kettering Cancer Center announced in The New York Times that their hospital wouldn't be using Zaltrap, a brand-new colorectal cancer drug from Sanofi ($SNY)--a move that spurred the French drugmaker to slash its price by half.

More recently, PBMs have shown that they've got some serious power, too. Late last year, local pricing critic and Express Scripts ($ESRX) CMO Steve Miller touched off a pricing war when it negotiated an exclusive deal with AbbVie ($ABBV) to provide its hep C treatment Viekira Pak over Gilead's ($GILD) pricey Sovaldi. And Miller says he's ready to take the strategy into other fields, too--cancer included.

- watch Mayo's video

Special Report: The top 10 most expensive drugs of 2013

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