CANCER STORY: Success & Hard Truth

Extremely High Cost of Chemo-drugs


Cancer Treatments Are The Most Expensive Medical Therapies


Cancer treatments are the most expensive medical therapies in the United States.

The cancer treatment industry is a $210 billion annual enterprise. A steady stream of highly priced drugs has been pumped out by the pharmaceutical industry in recent years, and these medications tend to cost insurers and patients $2,000 to $5,000 a month, the panel said.

Cost of Survival: New Cancer Drugs Can Extend Life, But Come At A High Price  Source:

“Your money or your life?” Increasingly, that is the choice cancer patients are being offered. The cost for many new cancer drugs is almost unbelievable. Herceptin, a drug for breast-cancer patients, costs $3,200 a month. Avastin, for colorectal cancer, can cost $4,400 a month. Rituxan, for non-Hodgkin’s lymphoma, runs $13,000 to $25,000 for one cycle of treatment. Revlimid, a newly approved treatment for multiple myeloma, could cost up to $60,000 a year. And Erbitux, might exceed $110,000 a year.

What’s behind the enormous cost of cancer medicine? These days, cancer therapies have become the holy grail for profitability. Many new high-tech compounds don’t cure people, but they do extend lives. Drug companies often justify high prices by pointing to the expense of conducting research.

High Cost of New Medications Burdens Patients Source  Robert Bazell, NBC News. 14 March 2006.

They come with a huge price tag. Examples of the annual cost for some drugs:

Tarceva for lung cancer: $35,000

Herceptin for breast cancer: $38,000

Avastin for colon cancer: $54,000

Erbitux for colon cancer: $110,000

Why are the prices of cancer drugs so high? Drug companies refuse to talk about how they set prices, and under the law, they can charge whatever they want.

Cancer Drug Offer Hope, Not Cure BUT At A Huge Expense               Source: NEW YORK TIMES 2 July 2005, Alex Berenson

Avastin. Erbitux. Gleevec. Herceptin. Rituxan. Tarceva. These are among the first in a wave of new drugs giving hope to millions of cancer patients by treating the disease in new ways, like blocking the blood vessels that feed tumors. But they are all highly expensive, up to $100,000 for a course of treatment that lasts a few months. A year’s supply of the drug for an average colon cancer patient costs $54,000. Tarceva for lung cancer costs almost $90 a day, or $31,000 a year. A drug called Thalomid for treating multiple myeloma costs $25,000 year. That is hundreds of times the cost of older, more toxic cancer drugs.

The new cancer drugs help most patients only marginally, prolonging life by a few weeks or months. Drug companies say many factors drive the pricing of their drugs, including the high cost of research and development, complex and expensive manufacturing processes and the value the drugs provide for patients.

Cancer is a uniquely frightening disease, and people will pay almost any price for treatments. While some of the new drugs are difficult to make, their prices are unrelated to their manufacturing costs.

The upward spiral started in 1992, when Bristol-Myers Squibb began charging $4,000 a year for Taxol. Then in 1998, Genentech began charging $20,000 a year for Herceptin, another targeted therapy for breast cancer. The price attracted notice, but little criticism. Four years later, Bristol and ImClone Systems began charging as much as $100,000 a year for Erbitux, a drug for advanced colon cancer.

For drug makers, the high prices have been a boon. Cancer drugs will be the fastest-growing part of the drug market for the next five years. Every major drug maker is now investing heavily in oncology.

Dr. Richard A. Deyo, a professor at the University of Washington and co-author of “Hope or Hype: The Obsession With Medical Advances and the High Cost of False Promises,” said that most patients overestimate the value of the new drugs. “We’re talking about adding a few weeks or months of life for people who are very sick,” Dr. Deyo said.
Is The Chance For Several More Months of Life – maybe a year or more with luck – Precious Enough To Spend A Small Fortune?

Source: CBS News, 12 August 2006

More than a third of Americans now would want “everything possible” done to save their lives. For many on the brink of death, the choice of desperate measures is hardly a choice at all. “It’s better to pay the money than sleeping with the worms,” said Jake Rogers, 62, of Chicago.

The trouble with many treatments, though, is that average patients gain only several more months of life, studies have found. Take the example of the new biotech drug Avastin, which treats colon cancer for about $4,400 a month. Effectiveness? It is proven to extend average life by up to five months. In a survey this year, only one-fourth of 139 cancer doctors felt that represents “good value.”

CBS, ABC Attack Companies on Cancer Drug Costs  Source: Business & Media Institute. 12 July 2006, Ken Shepherd

ABC and CBS evening newscasts attacked the pharmaceutical industry for expensive drugs for cancer treatment. “Some of the most expensive drugs may only extend the patient’s life a few months or a year,” CBS’s Regan noted during her story as she introduced a cancer specialist. “That’s really, I think, the crux of the problem. That for a modest improvement, there’s a huge increase in cost,” Dr. Leonard Saltz of the Memorial Sloan-Kettering Cancer Center told Regan. Regan lamented that “drug companies are reaping the benefits” in strong profits.

According to the Pharmaceutical Research and Manufacturers of America, the average cost of developing one new prescription drug costs $800-million in research over 10-15 years.

A Cancer Drug’s Big Price Rise Is Cause for Concern   Source: NEW YORK TIMES, March 12, 2006

On Feb. 3, Joyce Elkins filled a prescription for a two-week supply of nitrogen mustard, a decades-old cancer drug used to treat a rare form of lymphoma. The cost was $77.50. On Feb. 17, Ms. Elkins, returned to her pharmacy for a refill. This time, following a huge increase in the wholesale price of the drug, the cost was $548.01.

After years of defending high prices as necessary to cover the cost of research or production, industry executives increasingly point to the intrinsic value of their medicines as justification for prices. When a medicine does not have a good substitute, its maker can charge almost any price.

And once a company sets a price, government agencies, private insurers and patients have little choice but to pay it. The Food & Drug Administration does not regulate prices. The result has been soaring prices for some drug classes, notably cancer treatments.

In 1992, Bristol-Myers Squibb faced protests for its plans to charge $4,000 a year for Taxol, a breast cancer treatment. Now, most new cancer treatments are priced at $25,000 to $50,000 annually.  Last year, Genentech raised the price of Tarceva, a lung-cancer drug, by about 30 percent, to $32,000 for a year’s treatment.

In an interview last month, Dr. Susan Desmond-Hellmann, the president of product development for Genentech, said that the company had raised Tarceva’s price because the drug works better than Genentech had anticipated. Tarceva was a more powerful and more active agent than what we understood at the time of launch, and so more valuable, she said.  

High Cost of Drugs Has Little to Do With Innovation

The drug industry staunchly defends high prices as essential to fund critical drug research and development. How valid is the drug industry’s claim that high profits are necessary to support medical progress? In his new book, The $800 Million Dollar Pill, Merrill Goozner sets out to provide some answers. The title refers to what drug manufacturers claim it costs them to get a new drug approved by the FDA – an estimate that is considerably exaggerated.

Goozner asserts that drug prices aren’t based on the actual cost to invent them. Goozner argued that the private drug industry investment has not been the most important factor in the discovery and development of important new therapies. The success of the drug industry in developing new, life-saving treatments has been largely dependent on government sponsored research and researchers. The result is that American taxpayers end up paying twice: first through their tax dollar support of the National Institutes of Health and of academic research – and then again by paying high prices when they need the drugs.

The author profiles companies such as Amgen, which has made a success by bringing Epogen and Neupogen – the artificial versions of naturally occurring enzymes, to market during the past 20 years. Amgen has earned $5 billion in sales of the two drugs since 2002, a full third of that being profit. However, the technology on which those drugs are based came from outside the company. Drug companies justify high prices by citing a Tufts University calculation that it costs $800 million to develop a new drug and bring it to market.

Roche Is Not Embarrassed By The High Cost of Some of Its Cancer Drugs   Source: Reuters, Thomas Atkins, 20 June 2006

Swiss drug firm Roche is not embarrassed by the high cost of some of its cancer drugs and even has room to raise prices in the United States, a senior executive said on Tuesday. Roche has produced Herceptin and Avastin. But the drugs’ high prices – running to tens of thousands of dollars a year – have sparked a lively debate about whether their developers have gone too far and risk a backlash.

“We have looked at the cost and the benefit and then gone to the hospitals to see if we could pass the red-face test,” said Roche pharmaceuticals head William Burns at a media event. “We have no difficulty looking people in the eye and asking for it.”

Development work for some of the drugs, like Avastin, took scientists 30 years to complete. “There was no guarantee we could crack it,” Burns said. “We still, at the end of the day, have to give a return to our shareholders who took the risk.”

Cancer is the fastest-growing section of the pharmaceuticals market. A number of rival companies including industry giants Pfizer Inc. and GlaxoSmithKline Plc are now moving into the sector in force.

Roche’s sales of cancer medicines totalled 10.2 billion Swiss francs ($8.3 billion) last year from 1.6 billion in 2000, fuelled by blockbusters like MabThera, Herceptin and Avastin. “If you have demonstrated the benefits, in the U.S. you can still raise the prices”.