Using competition to reduce drug prices has worked in the real world, with drugs that fight, for instance, diabetes, as Reuters reports. In that case, health insurers can bargain with several drug companies that sell products with somewhat similar efficacy.
That’s not happening in the case of immunotherapies, though, where some of the oncologic drugs can cost $250,000 a year. Demand is high. The number of cancer drugs in the approval pipeline expanded by 63% between 2005 and 2015, according to QuintilesIMS Institute. The global market? Forget it. That’s expected to grow to $75.8 billion by 2022, from $16.9 billion in 2015, according to GlobalData.
Steve Miller, CMO at Express Scripts, tells Reuters that “for cancer drugs in general ... it is hard for us to drive down cost.”
It’s like this, says Aaron Kesselheim, MD, a researcher at Harvard Medical School and author of several studies of drug pricing: “Cancer drugs don’t compete on price. Drug companies have market exclusivity and we require payers to cover cancer drugs—Medicare has six protected classes, including cancer.”