The Ever-Rising Costs of Cancer Drugs

by Mary DeLucco

Cancer drugs like Genentech’s Avastin fall into a category known as specialty drugs, biotech medications that treat chronic diseases, including cancer, kidney disease, rheumatoid arthritis, and multiple sclerosis. Not only are these drugs usually much more expensive than traditional medications (ranging from approximately $6,000 to $300,000 per patient, per year), but lesser-priced generic equivalents are rarely available.

Of the drugs that fall into this category, cancer drugs are the most expensive. For example, Avastin has been approved as a treatment for metastatic breast cancer at a cost of just under $100,000 a year. Genentech’s other blockbuster cancer drug, Herceptin, costs around $48,000 per year.

When you consider that most of these drugs are taken in combination with at least one other expensive drug, the costs can be staggering.

In fact, Express Scripts, a pharmacy benefit manager, predicts that spending on these drugs will reach $99 million by 2010, nearly double the $54 million spent in 2006. One in four dollars of prescription drug spending will go toward specialty drugs by 2010, according to Express Scripts.

In 2006, several pharmaceutical and biotech companies—including Merck and Genentech—announced plans to price their drugs according to their value to patients. BCA described this as “social value pricing,” because it means pricing on the basis of, among other things, what the market will bear and the companies’ interpretation of the drugs’ perceived value to patients and society.

A poll released in March, which was conducted by USA Today, Kaiser Family Foundation, and the Harvard School of Public Health, found that 79 percent of Americans say the cost of prescription drugs is unreasonable, and 70 percent believe that pharmaceutical companies are more concerned with making profits than with helping people. When you consider “social value pricing,” you realize the majority, in this case, is right.

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