Congressional control of cancer drug costs

The price of cancer drugs is soaring and patients often pay thousands of dollars out of pocket to afford the drugs, according to a new story in The New England Journal of Medicine.

According to the report, current laws make it hard--impossible even--for the government to control medication costs for cancer treatment, which resulted in a 267 percent increase in spending from 1997 to 2004.

Programs like Medicare and Medicaid cover most of the costs, and now the government might step in with tighter controls on what it pays for. To that end, the House of Representatives is debating a stimulus package that includes the possible creation of a "comparative effectiveness center" for medications to help determine which medications deliver the most bang for the buck. 

What is unique about cancer drugs is that Medicare must pay for all cancer drug uses, even if the FDA has not approved the drug yet. However, the increase in expenditure does not necessarily correlate to any treatment benefit.

Using information about effectiveness and cost means that, when drugs work equally well, the government will be in a position to negotiate based on price to bring health care costs down. Currently, Medicare cannot negotiate prices with pharmaceutical companies, but the creation of a center for comparative effectiveness might change the way Medicare looks at reimbursement, although the likely limitation on treatment options might make it a tough sell for patients and physicians.

Early detection is most likely to bring the expenses down, but most insurance companies don't cover the costs entirely.

- read the full story in USA Today
- see what BusinessWeek said
- here's the Wall Street Journal blog entry