Pharma Companies Are Overpricing Cancer Drugs, Says New Study

More and more people are turning to alternative medicine due to the high cost of medicine and healthcare services. It’s like a gamble that many poor people make since the price of regaining their health has gone out of their reach. What’s worse, several pharmaceutical companies are reaping millions from drugs that could have helped many patients.

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According to the National Cancer Institute, “approximately 38.5 percent of men and women will be diagnosed with cancer of any site at some point during their lifetime based on 2012-2014 data.”

In 2012, over 14 million new cancer cases were recorded with over 8 million cancer deaths worldwide.

By 2030, based on estimates from the International Agency for Research on Cancer, global cancer incidence is expected to grow to over 21 million new cases along with 13 million deaths.

You don’t even have to wait till 2030 to witness the gravity of cancer infliction. Currently, cancer is already the second leading cause of mortality around the world with 1 out of 6 deaths caused by the dreaded disease.

How painful and awful is it to have cancer?

A cancer-stricken person experiences pain when the growing tumor starts to press on the bones, nerves, or other organs in the  body. Sometimes, it’s the treatment itself that causes discomfort and pain.


Not all types of cancer though cause pain. Physical pain, that is. But, most people who have been diagnosed with the disease experience emotional anguish. They may even become susceptible to clinical depression and feelings of fear and anxiety.

How painful is it to be hounded by fear and loneliness? No words can describe that, that’s why medical experts advise that a cancer patient’s loved ones must always provide support and be in constant watch for symptoms of serious emotional imbalance in a suffering patient.

Unfortunately, a person’s socio-economic status (SES) affects his/her degree of risk in developing cancer.

According to the American Cancer Society ACS, there is generally a higher incidence rate of cancer among people of lower SES due to the following:

  • Unhealthy lifestyle which include tobacco smoking, being physically inactive, and poor diet.
  • Higher prevalence of cancer-causing infections.
  • Workplace and other environmental exposures.

Cancer-stricken people with lower SES groups also have lower survival rate because the “disease is often detected at an advanced stage and because they are less likely to receive standard treatment”.

The ACS stated that among the barriers to preventive care, early detection, and optimal treatment among poor people include:

  • Inadequate health insurance.
  • Financial, structural, and personal barriers to health care.
  • Low health literacy rates due to delay in the dissemination of improved early detection and treatment in this underserved population.

Poor people with cancer are clearly at a disadvantage.

What’s worse, cancer drugs appear to have been made more expensive than they should be!

Oncologists Vinay Prasad from Oregon Health and Science University and Sham Mailankody from Memorial Sloan Kettering Cancer Center conducted an investigation of Securities and Exchange Commission filings for 10 separate cancer medications in the United States of America.

From the $2.7 billion figure which pharmaceutical companies use as justification for expensive cancer drug pricing, the researchers discovered that the actual median cost of research and development of cancer drugs was only $648 million!

“We thought if we focused on the R&D spending of some pharmaceutical companies that have only one FDA-approved cancer drug in the market, we might be able to better estimate the cost of developing a cancer drug. We were surprised to see our analysis show this cost to be about $648 million, substantially lower than the often-cited $2.7 billion,” said Mailankody.

“The amount of money drug companies are skimming off the top is substantial. The costs of these drugs are, in many cases, crippling to patients. And the cost is not justified by R&D spending,” commented Prassad.

Pharmaceutical companies have been referring to the 2016 study of the Tufts University to justify the costs of cancer drugs, as reported on ScienceDirect:

“We have conducted the fourth in a series of comprehensive compound-based analyses of the costs of new drug development. In the last study we reported average out-of-pocket and capitalized R&D costs of $403 million and $802 million in 2000 dollars ($524 million and $1044 million in 2013 dollars), respectively. For our updated analysis, we estimated total out-of-pocket and capitalized R&D cost per new drug to be $1395 million and $2558 million in 2013 dollars, respectively. To examine R&D costs over the entire product and development lifecycle, we also estimated R&D costs incurred after initial approval. This increased out-of-pocket cost per approved drug to $1861 million and capitalized cost to $2870 million. We validated our results in a variety of ways through analyses of independently derived published data on the pharmaceutical industry.”

But Prassad and Mailankody are contending this with their 2017 investigation of research and development (R&D) cost of cancer drug development. They had also made an analysis of long-term gains by the pharmaceutical companies they were investigating and discovered that the 10 drugs involved made more than $67 billion in just after 4 years.

“That’s a seven-fold increase in revenue post-approval versus R&D spending,” Prasad said. “That is extremely lucrative. Is there room to lower the price of drugs without stifling innovation? The answer has to be yes, in my opinion.”

But, of course, there are those who disagree with the findings since the study was very limited and could not be taken as representative of the drug industry as a whole. Also, it did not take into account that, in the development of drugs, 95 per cent of clinical trials end up failing and these endeavors have substantial costs too.

“When the rare event occurs that a company does win approval, the reward must be commensurate with taking on the multiple levels of risk not seen in any other industry if drug development is to remain economically viable for prospective investors,” Daniel Seaton, a spokesman for the Biotechnology Innovation Organization, said in an email to The New York Times.

Nevertheless, and as many still agree, it’s best to look at the matter even deeply and find a way for drugs to be more affordable to those in the so-called underserved population. After all, even if drug development is a business, it must be remembered that the original root of that endeavor comes from people’s innate sense of humanity.

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