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The pricing of oncology drugs is not necessarily based on their novelty or effectiveness, according to a new JAMA Oncology study. Instead, researchers found, “current pricing models are not rational but simply reflect what the market will bear.”
The pricing of oncology drugs is not necessarily based on their novelty or effectiveness, according to a new JAMA Oncologystudy. Instead, researchers found, “current pricing models are not rational but simply reflect what the market will bear.”
Published in the April 2 issue of JAMA Oncology, the study was authored by Sham Mailankody, MB, and Vinay Prasad, MD, MPH, with the Medical Oncology Service at the National Cancer Institute in Bethesda, Md.
‘We found little difference in the median wholesale price of 21 novel drugs and 30 next-in-class drugs approved over a five-year period,” the authors wrote. The median wholesale price of next-in-class drugs was $119,765 for 12 months of treatment, while the median wholesale price for novel drugs was $116,100 for 12 months, based on the most recent edition of Redbook.
The researchers identified 51 oncology drugs approved by FDA between January 1, 2009, and December 31, 2013. The drugs that were approved based on disease response rate (RR) were priced highest, with median costs per year of treatment of $137,952. This was greater than the price of drugs approved on the basis of overall survival (OS), which carried a median cost of $112,370 annually, and drugs approved on the basis of progressive or disease-free survival (PFS), which have a median cost of $102,677 per year.
“There was no significant difference in the price of drugs approved on the basis of OS or PFS,” the authors wrote. They also found no significant relationship between cost and the percentage improvement in end point.
“Our results suggest that the price of cancer drugs is independent of novelty. Additionally, we found little difference in price among drugs approved based on time-to-event end points and drugs approved on the basis of response rate,” they wrote.