New cancer drugs are more expensive than ever. Just look at some of the recently approved products in the category: Dendreon's ($DNDN) prostate drug Provenge at $93,000; Pfizer's ($PFE) targeted lung-cancer treatment Xalkori at $115,000 a year; Bristol-Myers Squibb's ($BMY) melanoma drug Yervoy at $120,000 per year; and Roche's ($RHHBY) targeted melanoma med Zelboraf at $56,400 for a 6-month course.
But these price tags are running up against cost-cutting pressures from governments and private payers alike, not to mention patients, whose out-of-pocket costs can render cutting-edge treatment unaffordable. In the U.K., the National Institute for Health and Clinical Excellence routinely denies recommendations to pricey drugs, even after revising its assessment process for treatments for terminal illness. Drugmakers that offer discounts have a better shot at approval, but no guarantee. Elsewhere in Europe, budget-minded governments are cutting prices across the board and delaying the adoption of expensive new treatments, including cancer drugs.
And then there's India, which just ordered Bayer ($BAY) to grant domestic drugmaker Natco Pharma a license to produce and sell Nexavar at a small fraction of the branded cost. As Reuters points out in an analysis piece, Roche followed the government's move with its own voluntary price cuts on Herceptin and MabThera, under an alliance with Emcure Pharmaceuticals.
The question Reuters poses is one that every pharma executive has heard--and perhaps asked him- or herself: How long can drugmakers charge so much, even for lifesaving drugs? Some companies are betting that highly targeted drugs will create a new calculus for cancer, saving time on the development end, and, on the treatment side, restricting expensive drugs to patients genetically programmed to benefit. That still won't help poor people in developing countries, Reuters notes. And can cash-strapped payers foot the bill in the meantime?
- read the Reuters piece