Cancer is a prevalent and frightening disease. There are more and more therapies under development, most of which are very expensive. That cost is a challenge to the system. A report from IQVIA details the cancer therapy pipeline. (IQVIA Report) 15 new compounds were approved by the FDA last year and 57 since 2014. Many of these are immune therapies and 450 immuno-oncology drugs are in the pipeline, so the spending pressure isn’t likely to relent. Total spending on cancer drugs in 2018 was $150 billion worldwide, up 13% from 2017. The median annual cost of a new oncology drug was $149,000. The top 38 cancer drugs by use accounted for 80% of all spending. And IQVIA anticipates that spending will grow by 11% to 14% annually over the next 5 years. In addition, use of many cancer therapies is guided by genetic testing or use of other biomarkers that add to the total cost of treatment.
Many of these new therapies have led to substantially better outcomes for patients, which is good news, but the cost, much of which is borne by those patients, causes significant anxiety. Payers have tried a variety of methods to limit costs, including ensuring that the therapies are only used by patients most likely to benefit and using whatever leverage they can to reduce prices. But the patent system allows manufacturers to basically charge whatever they want. CMS should use its authority in regard to the Medicare program to force manufacturers to disclose the actual cost of developing and manufacturing a drug. Then we can see the kind of outrageous margins that are being put on these therapies. And if necessary, Congress should use leverage under the patent system to force reductions in prices or the length of a patent will be shortened dramatically. It is great that we are seeing new therapies, but it is inexcusable to allow a government created patent system to facilitate extortionate pricing.