A new study comparing the health gains per dollar spent on cancer drugs for nine different countries published in the journal Health Affairs, on May 3, 2016, shows United States’ net economic value derived from these drugs to have been increased, although the US still lags behind all the other countries despite being the biggest spender on said drugs.
The authors of the study found wide ranging variations in health outcomes obtained by different people in different countries. United States witnessed one of the smallest improvements in cancer related morality. The estimates indicate that the United States obtained a net positive return of 32.6 billion dollars in the year 2014, when assigned a conservative value for extended life years.
These numbers are way lower than the ones calculated for other countries such as Japan, Germany, and France at 82.3, 43.3, and 34 billion US dollars. The net return for all the countries was compounded at 259.8 billion US dollars.
However, in depth analysis also indicated a pattern of gradual increase in the value obtained over time along with almost consistent positive returns of the investment in most scenarios for the United States.
United States has also spent the most money and resources on this particular market over the years compared to other countries, despite the pattern of drug consumption still maintaining at normal levels and the country being at the highest levels of generic market penetration.
The analysis of data in the study shows that there is an international surge of investment in cancer drug market and the spending on these drugs has increased substantially over the years.
Compound annual growth rate of incidence adjusted total cancer drug expenditures raised at a rate of 6% in the United States whereas the same compounded rates averaged at 3% in France to 7% for Germany and the United Kingdom. United States outspent the other nations consistently on incidence adjusted basis.
The findings were consistent throughout the research process despite researchers adjusting for cancer epidemiology and population. The results were also unaffected by brand names and generic drugs over time and different drug classes.
Another important statistical pattern in the study indicated that the price of orally administered cancer drugs has previously risen additional 10% after each supplemental indicative approval of FDA. The decline after a competitive drug approval was only 2%.
The authors wrote that these findings indicate little competitive pressure in the particular market and suggested the policymakers should focus on decreasing prices not only at the launch but also after the drug comes into the market.
Pharmaceutical Research and Manufacturers of America (PhRMA) representative Holly Campbell said in response to the article that this was not a good option as these drugs were highly significant and the cause of fluctuations in the market can sometimes be because after a medicine comes to market, we may find out that it is more effective or has broader use than originally anticipated.”
Researchers Sebastian Salas-Vega from London School of Economics and Political Science, UK, and Elias Mossialos, a professor of Health Policy at London School of Economics and Political Science, and professor of Health Policy and Management at Institute of Global Health Innovation of Imperial College, London, conducted the research on data obtained from 2004 to 2014. The information for the study was collected from IMS health’s proprietary MIDAS database. The data represented annual cross sectional public pricing, molecules descriptors for all the drugs available at the time and their sales volume for all the retails and hospitals in Canada, Australia, Germany, France, Italy, Sweden, Japan, United Kingdom, and the United States.
Adjunctive therapies were excluded from the given data. Annual incidence of malignant neoplasms was obtained from the OECD, the Organization for Economic Cooperation and Development and the United States Cancer Statistics Registry of Centers for Disease Control and Prevention (CDC). Other data was obtained from official sources such as International Agency for Research on Cancer’s GLOBOCAN Registry (2012), Institute for Health Metrics and Evaluation’s Global Burden of Disease 2103 Registry, and World Data Bank.
Last year cancer drugs were the third of all the drugs launched and United States spent $39.1 billion on cancer drugs, according to a report from IMS Institute for Healthcare Informatics whereas the total expenditure for prescription drugs in the country was $425 billion dollars, according to Bloomberg.
Prescription drug prices (including cancer drug prices under specialty drugs) are an increasingly controversial issue in Washington with arguments like high prices needed for research and development and high healthcare costs in general to keep the system afloat and the insurers increasingly arguing that the prices being too high is straining the system.