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Price v. Efficacy of U.S. Oncology Agents

Instead of efficacy being positively correlated with price for oncology products approved for marketing in the U.S., a study of agents approved by the FDA in 2015–20 shows the opposite. “This suggests that cancer drugs are priced based predominantly on what the market will bear,” the authors conclude. “Correcting this trend is vital for the solvency of health care and pharmaceutical development.”

Value-based pricing would provide greater financial rewards for drugs with a significant overall survival (OS) advantage, less for agents improving only progression-free survival (PFS), and still less for improvements in overall response rates (ORRs). “We analyzed 224 FDA oncological drug approvals across 119 individual drugs,” the investigators report. “Across all tumor types, the median annual cost for a course of an oncology drug was $196,000 (IQR, $170,000-$277,000. We detected a significantly lower median annual cost of drugs whose approval was based on OS ($185,000; IQR, $159,000-$206,000; n = 46) compared with those with PFS-based ($203,000; IQR, $183,000-$248,000; n = 71; P = .02) or overall response rate (ORR)–based approvals ($239,000, IQR, $185,000-$341,000, n = 90, P < .01). Price had a weak correlation within the most common approval end points (R2 = 0.14 for OS, R2 = 0.16 for PFS, and R2 = 0.02 for ORR), ie, variability in efficacy only captured less than 15% of the variability in price. There was no significant difference between the median price of drugs approved after randomized clinical trials ($191, 000) and those with no randomized clinical trial data ($206,000; P = .06).”

Editorial: “There is no shortage of innovative ideas to tie cancer drug price to value,” editorialists write. “For example, indication-specific pricing would allow for different prices for the same drug, depending on how effective it is for different indications. Alternatively, cancer drugs approved based on the US Food and Drug Administration Accelerated Approval pathway, which relies on surrogate outcome data, could be priced lower until postmarketing confirmatory trials are complete showing clinical benefit. At the end of the day, the challenge of value-based pricing is not the lack of creative ideas: it is about the lack of political will. The landmark Inflation Reduction Act legislation has cracked open a window to the prospect of paying for cancer treatments in a manner that is commensurate with their value. We need to break the glass.”

Source: JAMA Internal Medicine