Money & Business

Association Conference Becomes Center Stage for Drug-Price Debate

By / Jun 5, 2015 (iStock/Thinkstock)

At the American Society of Clinical Oncology’s annual meeting last week, a prominent doctor called out drug makers for pricing cancer medicine at untenable levels. Insurers agree with that stance, but a leading pharmaceutical trade group says cancer drug prices are in line with their value.

The American Society of Clinical Oncology’s annual meeting last month was ground zero for a speech that has the medical world abuzz.

The speaker? Dr. Leonard Saltz, chief of gastrointestinal oncology at Memorial Sloan Kettering Cancer Center. The topic? The high price of cancer treatments.

“Cancer-drug prices are not related to the value of the drug,” Saltz said in his speech, as reported by the Wall Street Journal [subscription]. “Prices are based on what has come before and what the seller believes the market will bear.”

Saltz has spoken out on the issue before. In a 2012 New York Times op-ed, he and two colleagues said Memorial Sloan-Kettering would not give its patients a new cancer drug due to the high price. The issue grabbed more headlines when Saltz took advantage of his platform at the year’s largest cancer research conference, where numerous new cancer drug findings were announced.

Saltz’s comments seemed to bolster the efforts of Dr. Hagop Kantarjian to push back against the high cost of cancer treatments. In March, Kantarjian, chairman of the MD Anderson Cancer Center’s leukemia department, launched an online petition asking the president, secretary of Health and Human Services, and Congress to take steps to ensure access to affordable cancer drugs. The petition has drawn more than 5,600 signatures.

The Industry’s Take

All of this puts pressure on the drug industry to answer claims that pharmaceutical prices have spiraled out of control (a similar controversy arose last year over the $1,000-per-pill hepatitis C drug Sovaldi). But the Pharmaceutical Research and Manufacturers of America (PhRMA) says the criticism is misplaced. In recent comments to Healio HemOnc Today, PhRMA Senior Vice President Robert Zirkelbach argued that the value of the drugs, rather than the price, should be the focus of the conversation.

“Spending on retail prescription medicines accounts for just 10 percent of total U.S. healthcare spending, and spending on cancer medicines represents just 1 percent of that total,” Zirkelbach said. “High utilization rates of generics, competition among brand-name medicines, and aggressive tactics by insurers to negotiate prices all help to keep costs under control.”

Responding to Saltz’s speech, Zirkelbach said that “conversations about costs need to move beyond sound bites and focus on the tremendous value that new innovative medicines are providing to patients, the healthcare system, and society—both today and in the long run.”

Insurers: Drug Costs Rising

Another key player in this debate—the insurance industry—largely sides with Saltz. In a blog post on Thursday, America’s Health Insurance Plans Communication Manager Alicia Caramenico cited recent numbers from the Centers for Medicare and Medicaid Services showing that spending per provider on cancer drugs for hematology and oncology patients in 2013 was $583,237—far above the $225,379 CMS paid for medical services.

“And as those unsustainable and unaffordable prices continue to soar, cancer patients and survivors will remain trapped in a financially toxic cycle that harms their quality of life and quality of care,” Caramenico wrote.

Ernie Smith

Ernie Smith is the social media journalist for Associations Now, a former newspaper guy, and a man who is dangerous when armed with a good pun. More »

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