News & Commentary

Value Lags Price For Cancer Drugs

Clinical benefits associated with new cancer therapies do not justify the high prices for the medications, and some value-based payment system is needed, according to a study published in the Journal of Oncology Practice in March.

That’s especially true regarding incremental costs, which researchers at the University of Toronto define as the difference in total drug price between the novel medications and standard treatment used to treat the condition taking into account the duration to treatment.

To calculate prices, the Canadian researchers used average wholesale prices and median treatment duration in the randomized controlled trials used for FDA approval.

Their results show that the monthly price of oncology drugs more than doubled ($7,103 to $15,535) from 2006 to 2015. When the researchers looked at incremental prices over the same time span, they identified a fivefold increase ($30,447 to $161,141).

It could be argued that it is money well spent if the new drugs delivered major clinical benefit; for example, cancer patients lived a lot longer and were healthier during that time. The Canadian research team, led by Ronak Saluja at the Sunnybrook Health Sciences Centre in Toronto, explored that issue by measuring clinical bene­fit with two scales—the American Society of Clinical Oncology’s Value Framework and the European Society of Medical Oncology’s Magnitude of Clinical Benefit Scale. In stark contrast to climbing prices, they found that clinical benefit as measured by those scales did not increase with time. Moreover, there was no correlation between price and clinical benefit using a variety of statistical techniques (Spearman and regression analyses).

Their opinion (which is consistent with conventional wisdom): The pricing of the new oncology drugs “may simply reflect what the market is willing to bear, rather than the clinical value of these medications.”

And this: “Our findings suggest that clinical benefits of many new therapies do not justify their high cost. In fact, given the significant increase in cost without the corresponding increase in benefits over time, the value of novel oncology drugs, with respect to the cost relative to the benefit, is decreasing” [emphasis added].

One major limitation of the study is that average wholesale prices don’t reflect what was actually paid for the medications once rebates and discounts are factored in. Also the study doesn’t include the current crop of CAR-T and other drugs now hitting the market. They might (or might not) alter the cost–benefit imbalance these researchers identified.


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