Cost of Cancer Medicines

What ABC News Missed

12.19.13 | By Jenni Brewer

Rather than trying to uncover what’s at play behind a woman’s struggle to pay for the costs of her leukemia medicine, last night’s ABC World News with Diane Sawyer barely scratched the surface of a complex issue. The result: a one-sided, overly simplistic view of the cost of cancer medicines in the United States. Our healthcare system is not perfect, and we should all feel empowered to debate ways to improve it, but excluding the biopharmaceutical sector’s perspective is not balanced journalism and moves us no closer to unified solutions.    

Our Perspective

PhRMA shares the concerns raised in the ABC story about out-of-pocket costs for patients and views it as a problem that patients must absorb greater cost-sharing for medicines with their insurance. The purpose of insurance is to spread the risk of a substantial loss over a large insured population so that sick patients are not burdened with inordinately high costs for life-saving or life-improving treatment, but, in contrast to other aspects of patient care, cancer medicines are often subject to greater cost-sharing with health plans. As one response to this disproportionate cost-sharing, biopharmaceutical companies offer patient assistance programs and support the Partnership for Prescription Assistance (PPA), which has helped nearly 8 million people to date.

Some critics argue that the European healthcare system is a better model, but the grass really isn’t greener across the pond. In comparison to countries that have price controls, such as the UK, the U.S. system allows for wider and quicker access to new medicines, leading to better health outcomes for patients. Patients in the UK and other countries that use cost-effectiveness face significant restrictions on access to treatments based on the use of rigid comparative- and cost-effectiveness standards. In fact, since 2000 the UK’s National Institute for Health and Clinical Excellence (NICE) has denied patients the ability to use the newest cancer drugs in 226 different indications. 

New cancer medicines have transformed patient lives, leading to improved life expectancy rates and quality of life for patients with cancer, while only making up a small portion of healthcare spending. Since 1980, life expectancy for cancer patients has increased three years, and 83 percent of these gains are attributable to new treatments, including medicines. Between 1975 and 2005, the five year survival rate increased by 20 percent for women with breast cancer and 51 percent for men with prostate cancer.  In terms of spending, recent data from IMS Health also shows that cancer medicines represented less than one percent of total national health expenditures in 2012. 

Progress in the fight against cancer would not be possible without substantial R&D investment from the biopharmaceutical research industry. Contrary to popular belief, the sector is the primary funder of research (not the government or academia) and it costs approximately $1.2 billion for each new medicine. It is also extremely risky. In fact, for every 5,000 to 10,000 potential medicines that are researched and developed, only five make it to clinical trials and only one makes it to patients. Those are slim odds, but despite the risks, companies continue to dedicate resources. In fact, since 2000, PhRMA member companies have invested approximately $550 billion in the search for new treatments and cures, including an estimated $48.5 billion in 2012 alone. As new medicines come to patients, companies re-invest into the next generation of new medicines. The cost of R&D is something companies are acutely aware of and new models are being investigated to streamline the R&D process and create more efficacies, especially as we enter the age of targeted therapies.

The biopharmaceutical industry is committed to playing an integral role in improving cancer care in the years to come, with 3,000 cancer medicines in development globally, 80 percent of which have the chance to be first-in-class treatments.

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