Study suggests cancer drug prices highest in US, but least affordable in India, China

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(Ref: CNBC, U.S. News & World, Financial Times)June 6th, 2016
By: Anna Bratulic

Study findings presented Monday at the American Society of Clinical Oncology (ASCO) annual meeting found that the US has the highest prices for cancer drugs in the world, and while the treatments tend to be less expensive in lower income countries, they are also less affordable there. The analysis, which looked at seven countries, revealed that the lowest prices for cancer drugs are in India and South Africa, but when price was calculated as a percentage of wealth adjusted for the cost of living, people in India and China were found to be least able to afford the medications.
The research focused on 15 generic and eight branded cancer drugs, including Roche's Herceptin and Avastin, as well as treatments by Eli Lilly, Novartis, Bristol-Myers Squibb and Takeda. Investigators obtained list prices from government websites in Australia, China, India, Israel, South Africa, the UK and the US, and estimated affordability by calculating the median monthly cost of the cancer drugs as a percentage of gross domestic product per capita based at purchasing power parity (GDPcapPPP). The study did not take into account discounts or rebates to list prices.
Researchers found that the median monthly price of branded cancer medicines was nearly $8700 in the US, compared with roughly $3200 in China, $2700 in Australia, $2600 in the UK, $1700 in South Africa and $1500 in India. Median prices for generic cancer drugs were also highest in the US, at $654, and lowest in India and South Africa, at $159 and $120, respectively.
However, after factoring in the affordability measure, the authors found that cancer drugs were most affordable in Australia and the UK, where the average monthly price of patented therapies was 71 percent and 78 percent of those countries' respective GDPcapPPP values. In the US, branded cancer drugs were 192 percent of its GDPcapPPP, while generics were found to be priced at 14 percent of wealth adjusted for the cost of living. Meanwhile, the same measure applied to branded treatments in China and India amounted to 288 percent and 313 of their GDPcapPPP values, respectively, and was 48 percent and 33 percent for generics.
Lead author Daniel Goldstein pointed out that the governments in some developed countries have intervened to regulate drug prices, resulting in a better value for their citizens. However, he said that while the US is the wealthiest nation, "its drug prices are significantly higher, so much so that cancer medications are less affordable [there] than developed countries like England or Australia." Goldstein suggested that the US system "is lacking any assessment of value," adding that while "the FDA approves a drug based on safety and efficacy…there's no consideration for cost or value."
Steve Miller, chief medical officer of Express Scripts, estimated that "the US represents about 5 percent of the global population, but about a third of the world's drug revenue and somewhere between 50 percent and 70 percent of the world's drug profitability." He further remarked that the country "has been spending money to protect the world for decades…we're now being asked to essentially fund [the world's] drug development." Meanwhile, Roche stated that it prices its drugs by "[striving] for the right balance between ensuring people have access to the medicines they need [and] investing in future breakthroughs," adding that "local economic situations and the unique healthcare needs and systems within each country" are also considered.
The pharmaceutical industry has come under increased pressure in the US over the pricing issue, with presidential candidates Donald Trump and Hilary Clinton each pledging to lower prescription drug costs if elected in November. For related analysis on the US drug pricing controversy, see Spotlight On: US politicians sharpening their pitchforks – and policies.