WHO: Profits Outweigh R&D Costs of New Cancer Drugs

MedicalResearch.com Interview with:

Kiu Tay-Teo, PhD World Health Organization Geneva, Switzerland

Dr. Kiu Tay-Teo

Kiu Tay-Teo, PhD
World Health Organization
Geneva, Switzerland

MedicalResearch.com: What are the main findings?

Response: High costs and high risks of R&D for drugs have been presented to justify high drug prices, especially for cancer drugs. However, it is unclear whether prices are in fact justifiable compared to the overall return on R&D investment.

In this paper, we systematically compared incomes from the sales of cancer drugs with the R&D costs. We quantified the incomes generated from the sales of 99 cancer drugs approved by FDA from 1989–2017. This was based on sales figures reported in the originator companies’ annual financial reports, and where necessary, estimates deduced from the reported figures. The sales incomes were net of rebates and discounts, but without accounting for expenses and taxes. For the R&D costs of bringing one new cancer drug to the market, the literature reported a typical costs of between $219 million and $2.9 billion, after accounting for the costs of failed products that were investigated but not marketed and the opportunity costs. For the main analysis, we used a median cost of $794 million, as reported in the literature. To be clear, this analysis did not estimate profit return because we do not have information about the costs and year-to-year variations in costs (i.e. expenses and taxes) specific to cancer drugs.

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Specialty Drugs and Increase Price of Brand Names Raise Health Care Costs

MedicalResearch.com Interview with:

MedicalResearch.com Interview with: Inmaculada Hernandez, PharmD, PhD Assistant Professor of Pharmacy and Therapeutics University of Pittsburgh School of Pharmacy

Dr. Hernandez

Inmaculada Hernandez, PharmD, PhD
Assistant Professor of Pharmacy and Therapeutics
University of Pittsburgh School of Pharmacy

MedicalResearch.com: What is the background for this study? What are the main findings?

Response: The objective of our study was to answer a research question of high policy relevance: to what extent are rising drug costs due to inflation in the prices of existing products versus the market entry of new, more expensive drugs.

We found that rising prices of brand-name drugs are largely driven by manufacturers increasing prices of medications that are already in the market rather than to the entry of new products.

In contrast, increases in costs of specialty and generic drugs were driven by the entry of new drugs.

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How Much Do Clinical Trials For New Medications Really Cost?

MedicalResearch.com Interview with:

Thomas J Moore Senior Scientist Institute for Safe Medication Practices Lecturer, Department of Epidemiology and Biostatistics The George Washington University Milken Institute of Public Health Alexandria, VA 22314

Thomas J Moore

Thomas J Moore AB
Senior Scientist Institute for Safe Medication Practices
Lecturer, Department of Epidemiology and Biostatistics
The George Washington University
Milken Institute of Public Health
Alexandria, VA 22314

MedicalResearch.com: What is the background for this study? What are the main findings?

  • The study provides realistic cost estimates of pivotal clinical trials that establish drug benefits to support FDA approval of 59 new drugs released for marketing in 2015-2016.
  • The median estimated cost was just $19 million, with half of the 138 trials studied clustered between $12 million and $33 million.
  • The highest cost trials–with estimates up to $345 million–were for new drugs that were similar to drugs already available and already proven in treating serious illnesses. 

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Costs of Older Cancer Drugs Have Risen More Than New Medications

MedicalResearch.com Interview with: Dr. Sham Mailankody, MBBS

Dr. Sham Mailankody

MedicalResearch.com Interview with:
Dr. Sham Mailankody, MBBS
Memorial Sloan Kettering Cancer Center

MedicalResearch.com: What is the background for this study?

Response: The high price of older drugs has been increasingly criticized in part because of recent dramatic price hikes. There are some well known examples like pyrimethamine and more recently EpiPen. Whether and to what degree examples like pyrimethamine represent a common problem or exceptional cases remains unknown. Using Medicare data available for Part B, we sought to analyze the change in average sales price of cancer drugs between January 2010 and January 2015, and whether older drugs were more likely to undergo price increases than newer drugs.

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Autoimmune Specialty Drug Spending Doubles, Accounting for 10 Percent of Drug Expenses

MedicalResearch.com Interview with:

Kevin Bowen MD MBA Senior Health Outcomes Researcher Prime Therapeutics LLC 1305 Corporate Center Drive Eagan, MN 55121

Dr. Kevin Bowen

Kevin Bowen MD MBA
Senior Health Outcomes Researcher
Prime Therapeutics LLC
1305 Corporate Center Drive
Eagan, MN 55121

MedicalResearch.com: What is the background for this study? What are the main findings?

• Autoimmune specialty drugs now account for about one of every 10 dollars of combined drug expense through the medical and pharmacy benefits in a commercially insured population.
• The autoimmune drug class is one of the fastest growing, with this study finding a doubling in autoimmune drug expenditures and a 38 percent increase in utilization, in the most recent four years.
• Integrated analysis of medical and pharmacy claims is essential for this category of drugs because more than 25 percent of autoimmune specialty drug use is paid through the medical benefit and medical claims diagnosis coding provides a means of determining what conditions were treated with drugs covered by pharmacy claims.
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