Have cancer drugs hit a cost ceiling?

Ask any Big Pharma CEO these days which drugs offer the most promise for future earnings, and the likely answer will be oncology meds. Indeed, as the patents on other blockbusters expire, there's been a headlong rush toward cancer treatments to fill in the revenue gaps. It's not just that these meds bear big price tags, but also because there's less need for advertising and marketing support. As one analyst told Business Week, to sell oncology drugs, "You don't need thousands of sales reps, you just need good data."

But drugmakers may find themselves rushing headlong into a wall. Witness the reluctance of British regulators to pay for expensive treatments that often add only months to a patient's life. As you know, Roche recently slashed the price of its lung cancer treatment Tarceva, just to get the Brits to pay for it. Experts say this pushback against prices is just the beginning. "At some point--and that point will come sooner rather than later--payers are not going to approve spending $100,000 for someone to live an extra six months," Erik Gordon, director of biomedicine at Stevens Institute of Technology, told BW. Another expert said that as insurers increasingly scrutinize cancer drugs, "many will never reach their markets."

- read the BW article

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