the impact of high cost oncology drugs
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The Impact of High Cost Oncology Drugs
Joshua Jacob
MSci Human Genetics, University College London
Introduction • Targeted cancer therapies are at a high cost – why?
• How have they affected the political system, health service and public consumer?
• What future strategies should be undertaken to rationalise and reassess these costs?
How much is spent on oncology drugs?
Spending in Leading Therapy Areas in the United States, 2011
Oncology spending by area
2014 >$25Bn
Oncology spending by area
Why the high cost?
Drug / Approval Year
Manufacturer Indication Route Price
Herceptin Approved: 1998
Roche Breast cancer I.V. $70,000 / course
Glivec Approved: 2001
Novartis Chronic myeloid leukemia
Oral $70,000 / course
Yervoy Approved: 2011
Bristol-Myers Squibb
Melanoma I.V. $120,000 / course
Zytiga Approved: 2011
Janssen Prostate cancer Oral $40,000 / course
Stivarga Approved: 2012
Bayer Colorectal Cancer
Oral $9,500 / month
Kadcyla Approved: 2013
Roche Breast Cancer Oral $94,000 / course
Price of FDA-approved Oncology Drugs
Reasons behind high costs
• Drug development costs
– Preclinical studies
– Phase 1, 2, 3 clinical trials
– Regulatory Approval
• Difficulty in curing cancer with reduced range of treatments
“Cancer treatments are generally representing a monopoly”
Dr S. Vincent Rajkumar (Haematologist), Mayo Clinic
• No generic price check
• Willingness to pay for cancer treatments
Patent Protection and Expiration
• Patent-protection grants market exclusivity
• Last 10-20 years before expiration
• Patent expiration has a major impact on sales
– Patents on pharmaceuticals with sales of >$260Bn will expire in the next decade – Patent Cliff
– Accounts for 40% becoming available as generic medicines
• Generic medicines can generate huge savings potential
– 2012-2016: €30Bn saved through brand medicines going off-patent in 7 EU Member states, including UK
– Source: European Commission 2012
100% <25% share in only 6 months
How does all this affect the political system and
healthcare service?
• Recent report: Indian Supreme Court rejected a 6-year long plea by Novartis to patent an updated version of its cancer drug, Glivec.
– Generic companies can continue to sell copies of the drug at lower prices
• “Drug companies are motivated by financial gain, in the interest of their shareholders and for investment into research.” – Dr. Angus Patterson, Clinical Oncologist, Antrim Area Hospital,
Northern Ireland
Public Health & Affordability Research and
Innovation
Drug / Approval Year
Manufacturer Indication Route Price
Herceptin Approved: 1998
Roche Breast cancer I.V. $70,000 / course
Glivec Approved: 2001
Novartis Chronic myeloid leukemia
Oral $70,000 / course
Yervoy Approved: 2011
Bristol-Myers Squibb
Melanoma I.V. $120,000 / course
Zytiga Approved: 2011
Janssen Prostate cancer Oral $40,000 / course
Stivarga Approved: 2012
Bayer Colorectal Cancer
Oral $9,500 / month
Kadcyla Approved: 2013
Roche Breast Cancer Oral $94,000 / course
Price of FDA-approved Oncology Drugs
• Recent report: Indian Supreme Court rejected a 6-year long plea by Novartis to patent an updated version of its cancer drug, Glivec.
– Generic companies can continue to sell copies of the drug at lower prices
• “Drug companies are motivated by financial gain, in the interest of their shareholders and for investment into research.” – Dr. Angus Patterson, Clinical Oncologist, Antrim Area Hospital,
Northern Ireland
Public Health & Affordability Research and
Innovation
Strategies and implications for the future • 2014: Launch of an obligatory value-based pricing for new
medicines, replacing the current PPRS (Pharmaceutical Price Regulation Scheme) – Price decisions based on treatment value, innovation, impact on
society and unmet needs – Aided by HTA (Health-technology Assessment)
– Pricing flexibility: price changes based on real-world evidence, e.g. patient-reported outcomes
• Oncology drug development is changing – Personalised treatments
• Need for collaboration/partnerships
• Changes in supply chains and delivery of drugs
Closing Comments
• Cancer incidence is increasing, with treatments shifting from acute to more chronic care.
• We must find a balance between healthcare affordability and innovatory research
• Generics may be the way forward
Public Health & Affordability
Research and Innovation
Thank You