It's a paradox at the heart of the pharmaceutical industry: if drugs cured anyone, there wouldn't be a market for the drugs—and that's especially the case when it comes to treating cancer.
Drug companies make the bulk of their profits from new cancer drugs, and prices for the drugs have increased 10-fold in the past 15 years—with one course of immunotherapy treatment now costing $475,000. The patients are coming in a distant second, and in some cases can no longer get the treatment they need.
Even if a cancer patient can somehow afford these new drugs, they aren't always helping people live longer. This is mainly because the drugs are essentially the same as the older generation. A review of the cancer drugs launched between 2002 and 2014 to treat solid tumors concluded that they offered only marginal benefits over older drugs and extended a patient's life by just 2.1 months.1
But that's not the point, at least not for the drug company. The key is getting a 'new' drug onto the market, which then enjoys a 20-year exclusive patent, including the research period—and during the 12 years of that monopoly when the drug is on the market, the price of the drug can be hiked. Once the protection of the patent expires, the price of a cancer drug typically drops by around 78 percent.
The whole model has been set up to beat cancer later, when everyone other than the drug companies wants to beat cancer now, says the action group Dying for a Cure.
It's a view echoed by Professor Paul Workman, chief executive of the Institute of Cancer Research in London, who said in his keynote speech at the 2014 World Oncology Forum, "The global system for discovering new cancer drugs is broken and failing to turn scientific advances into enough innovative new medicines."
Even cancer specialists, oncologists, are starting to cry foul. Some are saying the pharmaceutical industry has crossed a moral line and gone from profit-making to profiteering— at the expense of the most desperate patients.
The proving ground for cancer drug prices is the United States, which sets the bar for the rest of the world. But it's a free market with no obvious gravitational pull; instead, it's buoyed by the hopes of cancer patients and the pharmaceutical industry's claims that the new therapies are costly to develop.
But these protests sound a little hollow. In fact, the true cost of a new cancer drug "is not linked to anything rational," says Vinay Prasad, a cancer specialist at Oregon Health & Science University in Portland. Essentially, drug companies put whatever price they want on a new cancer drug because they can.
Prasad carried out an analysis of the costs of bringing a new cancer drug to market. The pharmaceutical industry likes to tout an eye-watering average cost of $2.7 billion, but Prasad estimates it's nothing even close to that. He thinks the real cost is more like $648 million,2 and others estimate the development costs are even lower.2 Researchers from Princeton and the University of Sydney in Australia also crunched their own numbers against the drug companies' R&D cost calculations, and estimated they had been inflated by a factor of 18 times.3
And with new drugs achieving average sales revenues of $1.66 billion, a 250 percent return on investment isn't bad in anyone's books. Over a four-year period, it gets even better. Looking at the costs and sales of 10 cancer drugs, Prasad estimates that they generated total revenues of $67 billion and cost just $7.2 billion to bring to market.
Research costs may be far less than the drug industry claims, because many of the new drugs aren't particularly innovative—they're often just adaptations of older ones that are just as effective and far cheaper.4
And, anyway, the effectiveness of the drug is often determined more by when the cancer is first spotted. "Unless we can diagnose patients at an earlier stage of presentation, all these 'fancy-schmancy' new drugs will have very little impact," said David Kerr, a cancer researcher at Oxford University.5
Instead of exploiting a market of cancer patients desperate to be cured, and for whom any price is acceptable, cancer drugs should be evaluated in the same way as any other commodity, says Prasad: by their usefulness and effectiveness. Essentially, if the drug doesn't work, the patient doesn't pay.
Radical as the idea seems, it's already happened. Novartis in Switzerland has announced that people being given Kymriah (tisagenlecleucel), its new drug for leukemia that costs $475,000 for a course of treatment, can have a full refund if they don't start to show an improvement within the first 30 days.
But Kymriah is an isolated example and may even be unique. Most cancer drugs are still administered on a firm-sale basis with no guarantees, no refunds—and no exceptions. And it's unsustainable. With prices continuing to spiral around the world, it's getting to the point where patients are delaying treatment and national health authorities are not adopting the new drugs.
Very few countries in Africa, for example, can afford cancer drugs, and certainly none of the newer ones. Of the 49 new cancer drugs introduced between 2010 and 2014, just six countries had access to more than half. Even the US couldn't afford all of them and had adopted 41 of the new batch.
Cancer drug prices are increasing by around 11 percent every year. In 2015, worldwide spending on cancer drugs was $107 billion, and it's expected to rise to $150 billion by 2020. This increase is entirely due to price hikes and not because more people are being treated.6
Put another way, the average cost of one year of cancer care per patient was less than $10,000 in the late 1990s; it increased to between $30,000 and $50,000 by 2005 and was above $100,000 by 2012.
This price inflation amounts to exploitation of the desperate. "It represents to many cancer experts a crossing of a moral line between reasonable profits and profiteering in a situation involving a human catastrophe," wrote Hagup Kantarjian from the University of Texas MD Anderson Cancer Center in Houston.4
Innovation isn't the watchword when it comes to cancer research, certainly not as far as the drug companies are concerned. Around 85 percent of cancer research funds comes from taxpayers, which suggests it's being carried out by independent, or government, agencies.
By comparison, drug companies
spend just 1.3 percent of total revenues on original cancer research, while dropping between 20 to 45 percent on advertising and marketing to sell the drug once it's been licensed.2
Instead, most new cancer drugs are actually 'me-too' variations of existing drugs. Around 40 percent of revenues for cancer drugs are driven by just 10 drugs, which generated a total of $44 billion in sales in 2015 and $300 billion since they hit the market.
Eventually, these top sellers will be replaced when their patents expire, but it's likely to be with something similar. The US drug regulator, the Food and Drug Administration (FDA), approves around nine new cancer drugs a year, and this includes drugs already on the market that the manufacturer also wants to use for a different cancer. One survey discovered that 74 percent of new drugs being developed were very similar to other drugs under development by competing drug companies.1
Overall, there's something very rotten about the way we are trying to treat, and even beat, cancer. Profit-making has been overtaken by naked profiteering, and the cancer patient isn't even in the frame.
Slowly, regulators around the world are starting to say that enough is enough, and that compassion, ethics and real science need to be introduced if we are to beat one of the world's most feared diseases. Tooth-and-claw capitalism is letting us all down.