What good is a cancer breakthrough without an affordable market for treatment? For those who can’t foot the bill, it’s essentially useless.
Raven Riedesel knows this all too well. After being diagnosed with leukemia, she found herself unable to afford Tasinga, a drug produced by Novartis. At the cost of $1,600 in out-of-pocket costs a month, Riedesel couldn’t fit the life-saving prescription into her budget.
“It would take everything that we had left over after buying necessities and paying our bills,” she told CNBC News.
Though Riedesel was approved for a free trial of the drug, it’s not going to last forever. At some point, she and her family will be stuck with the bill.
Now a global coalition of more than 120 doctors — 30 of whom are American — are calling out the pharmaceutical industry for profiteering through a market that pegs cancer treatments at exorbitantly high costs, with some requiring $138,000 a year for every patient.
Doctors speak up
The physician coalition aiming to pressure the industry to change its ways published a commentary in Blood, the journal of the American Society of Hematology. While acknowledging the cost pharmaceutical companies face for the development of new drugs, they also raise the question: Where is the line drawn?
“If drug price reflects value, then it should be proportional to the benefit to patients in objective measures, such as survival prolongation, degree of tumor shrinkage or improved quality of life,” the commentary states.
In 2012, 12 new cancer-related drugs were introduced onto the U.S. market. While seemingly good news for those in need of treatment, the reality puts the price tag of 11 out of 12 of those drugs at more than $100,000.
In 2011, the cost of health care in the U.S. was set at $2.7 trillion.
“In the U.S., prices represent the extreme end of high prices, a reflection of a ‘free market economy’ and the notion that ‘one cannot put a price on a human life,’ as well as a failure of government and insurers to more actively negotiate pricing for anti-cancer and other pharmaceuticals, in contrast to practices in other parts of the world,” the editorial states.
Wonder drug, inflated prices
The Novartis-produced Glivec, or Gleevec, drug, emerged as a “miracle drug” treatment for myeloid leukemia, a rare form of cancer that targets white blood cells.
In the commentary published by the physician coalition, the drug is held as a prime example of how the pharmaceutical industry is seeking unethical profits by escalating the price on those who need the drug the most.
“Pharmaceutical companies have lost their moral sense,” Dr. Hagop M. Kantarjian, a leading member of the coalition and chairman of the Anderson Cancer Center in Houston, Texas, told CNBC. “[They] are getting to the point where it is becoming unsustainable.”
Five-year studies of patients taking the drug have shown tremendous success — 89 percent survival rates and just a 17 percent chance of relapse, according to a study published in the New England Journal of Medicine.
While the results have benefited patients since its introduction to the U.S. market in 2001, the cost to those very people has consistently increased. Ten years ago, a patient in the U.S. could purchase the drug for $30,000. Today, that cost has risen to $92,000.
In 2001, Novartis’s then-Chief Executive Officer Daniel Vasella, admitted the price tag was high, but pointed out the drug’s benefits. At that $30,000 range, the company expected to generate $900,000 a year. In two years, that would pay off development costs, according to an article in The Independent.
“If you are making $3 billion a year on Gleevec, could you get by with $2 billion?” Dr. Brian Druker, director of the Knight Cancer Institute at Oregon Health and Science University, told CNBC. “When do you cross the line from essential profits to profiteering?”
Even cancer patients in the U.S. who are covered under insurance pay, on average, 20 percent of the price associated with medications, according to the Blood commentary.
Will noise lead to change?
Novartis, featured in the doctors’ commentary, did issue a statement indicating that it would look into the issues at hand, yet did not follow up with a timeline or promise for action.
“We recognize the sustainability of health care systems is a complex topic and we welcome the opportunity to be a part of the dialogue,” the statement read.
Meanwhile, outspoken physicians are bracing for pushback, rather than change.
“I am sure I am going to be blackballed,” Dr. Kantarjian told CNBC. “My research career will be hurt.”