The Impact of High Cost Oncology Drugs

Joshua Jacob

MSci Human Genetics, University College London

Introduction • Targeted cancer therapies are at a high cost – why?

• How have they affected the political system, health service and public consumer?

• What future strategies should be undertaken to rationalise and reassess these costs?

How much is spent on oncology drugs?

Spending in Leading Therapy Areas in the United States, 2011

Oncology spending by area

2014 >$25Bn

Oncology spending by area

Why the high cost?

Drug / Approval Year

Manufacturer Indication Route Price

Herceptin Approved: 1998

Roche Breast cancer I.V. $70,000 / course

Glivec Approved: 2001

Novartis Chronic myeloid leukemia

Oral $70,000 / course

Yervoy Approved: 2011

Bristol-Myers Squibb

Melanoma I.V. $120,000 / course

Zytiga Approved: 2011

Janssen Prostate cancer Oral $40,000 / course

Stivarga Approved: 2012

Bayer Colorectal Cancer

Oral $9,500 / month

Kadcyla Approved: 2013

Roche Breast Cancer Oral $94,000 / course

Price of FDA-approved Oncology Drugs

Reasons behind high costs

• Drug development costs

– Preclinical studies

– Phase 1, 2, 3 clinical trials

– Regulatory Approval

• Difficulty in curing cancer with reduced range of treatments

“Cancer treatments are generally representing a monopoly”

Dr S. Vincent Rajkumar (Haematologist), Mayo Clinic

• No generic price check

• Willingness to pay for cancer treatments

Patent Protection and Expiration

• Patent-protection grants market exclusivity

• Last 10-20 years before expiration

• Patent expiration has a major impact on sales

– Patents on pharmaceuticals with sales of >$260Bn will expire in the next decade – Patent Cliff

– Accounts for 40% becoming available as generic medicines

• Generic medicines can generate huge savings potential

– 2012-2016: €30Bn saved through brand medicines going off-patent in 7 EU Member states, including UK

– Source: European Commission 2012

100% <25% share in only 6 months

How does all this affect the political system and

healthcare service?

• Recent report: Indian Supreme Court rejected a 6-year long plea by Novartis to patent an updated version of its cancer drug, Glivec.

– Generic companies can continue to sell copies of the drug at lower prices

• “Drug companies are motivated by financial gain, in the interest of their shareholders and for investment into research.” – Dr. Angus Patterson, Clinical Oncologist, Antrim Area Hospital,

Northern Ireland

Public Health & Affordability Research and

Innovation

Drug / Approval Year

Manufacturer Indication Route Price

Herceptin Approved: 1998

Roche Breast cancer I.V. $70,000 / course

Glivec Approved: 2001

Novartis Chronic myeloid leukemia

Oral $70,000 / course

Yervoy Approved: 2011

Bristol-Myers Squibb

Melanoma I.V. $120,000 / course

Zytiga Approved: 2011

Janssen Prostate cancer Oral $40,000 / course

Stivarga Approved: 2012

Bayer Colorectal Cancer

Oral $9,500 / month

Kadcyla Approved: 2013

Roche Breast Cancer Oral $94,000 / course

Price of FDA-approved Oncology Drugs

• Recent report: Indian Supreme Court rejected a 6-year long plea by Novartis to patent an updated version of its cancer drug, Glivec.

– Generic companies can continue to sell copies of the drug at lower prices

• “Drug companies are motivated by financial gain, in the interest of their shareholders and for investment into research.” – Dr. Angus Patterson, Clinical Oncologist, Antrim Area Hospital,

Northern Ireland

Public Health & Affordability Research and

Innovation

Strategies and implications for the future • 2014: Launch of an obligatory value-based pricing for new

medicines, replacing the current PPRS (Pharmaceutical Price Regulation Scheme) – Price decisions based on treatment value, innovation, impact on

society and unmet needs – Aided by HTA (Health-technology Assessment)

– Pricing flexibility: price changes based on real-world evidence, e.g. patient-reported outcomes

• Oncology drug development is changing – Personalised treatments

• Need for collaboration/partnerships

• Changes in supply chains and delivery of drugs

Closing Comments

• Cancer incidence is increasing, with treatments shifting from acute to more chronic care.

• We must find a balance between healthcare affordability and innovatory research

• Generics may be the way forward

Public Health & Affordability

Research and Innovation

Thank You