Unbridling box office power in the healthcare space has just commenced. A Chinese social comedy film named ‘Dying to Survive’, released onJuly 05, 2018, sparked off public concern on high priced cancer drugs in China.The film depictsa real-life, heart wrecking story of a leukemia patient’s struggle for survival by asking a drug dealer to smuggle illegal cheap drugs from India into China. The medicine trader later finds his redemption, and becomes a hero saving more patients – as the China Internet Information Center in Beijing reported.
Consequently, reacting to public outcry for cheaper cancer drugs in China, the country’s all-powerful health insurance administration is, reportedly, aiming to deepen discounts on cancer drugs, which are already on its National Reimbursement Drug List (NRDL). The effort – as the report says, would use public bidding and procurement, specifically for cancer therapies. Meanwhile, officials will start enlistment negotiations for treatments not yet included on the coverage list.
Nearer home, responding to a similar public concern, although not a film-induced one, Indian Government announced a major relief for cancer patients. In March 2017, the National Pharmaceutical Pricing Authority (NPPA) slashed prices of some cancer drugs by up to 86 percent, as reported in the media. For example, the price of AstraZeneca’s lung cancer drug – was brought down from Rs 29,259, to Rs 3,977. This could well be an off the cuff approach. Nevertheless, the Chairman of NPPA assured that more cancer drugs will soon come under price control. That said, if with such degree of price reduction, all the above brands can still survive, it may not be difficult for many to fathom what factor really drives the cancer drug pricing models of the drug makers?
This is the prevailing pricing quagmire for cancer drugs, the world over. Thus, improving access to affordable cancer treatment has assumed priority in several countries. Are the pharma players missing the ‘storm signal’ in this area, even now? In this article, before delving into that issue, let me begin with a relevant background.
‘Cancer is now the second leading cause of death globally’ – W.H.O:
The February 1, 2018 report of the World Health Organization (W.H.O), elucidating the ‘Key Facts’ on the disease, vindicates this concern. Cancer is now the second leading cause of death globally and was responsible for 8.8 million deaths in 2015. The world over, nearly 1 in 6 deaths is due to cancer. The economic impact of cancer is significant and is increasing. Interestingly, round 70 percent deaths from cancer occur in low- and middle-income countries – the report says.
“India Against Cancer” - a group of medical doctors and researchers at the National Institute of Cancer Prevention and Research (NICPR)- a premier institute, under Indian Council of Medical Research (ICMR), raises similar concerns in India, as well. It says, estimated number of people living with the disease: around 2.5 million. Every year, over 700,000 new cancer patients are registered. Officially diagnosed, cancer-related deaths stand at 5,56,400. One woman dies of cervical cancer every 8 minutes in the country.It goes without saying that a large number of cancer sufferers remain undetected, because of various reasons.
India’s GDP per capita income, reportedly reached USD 1,974.76 in March 2018, from USD 1,763 in March 2017. As compared to this, the cost of cancer chemotherapy is very high in the country, which severely hits many families, as most of the treatment cost is Out of Pocket Expenditure (OOPE).It costs roughly between Rs 30,000.00 (around USD 460) – Rs 100,000.00 (around USD 1,540) – per session. Hence, increasing price of cancer medication has become the centerpiece of a raging debate, globally, including India. This article will deliberate on the latest developments and trends in this area to explore a way forward.
The economic impact of cancer in India:
The research paper on ‘Economic burden of cancer in India’, published in PLOS ONE on February 26, 2018, reiterates that the increasing prevalence of cancer is a major public health concern. The issue assumes utmost relevance for developing countries, such as India, because of a large population base, limited diagnostic facilities, very high treatment costs and poor survival prospects. Ongoing demographic and epidemiological transition in India, are aggravating the situation further. – the paper underscored.
The study found that OOPE on cancer treatment in India is among the highest for any ailment. The average OOPE on inpatient care in private facilities is about three-times that of public facilities. Further, treatment for about 40 percent of cancer hospitalization cases is financed mainly through borrowings, sale of assets and contributions from friends and relatives. Also, over 60 percent of the households who seek care from the private sector incur OOPE in excess of 20 percent of their annual per capita household expenditure. This has catastrophic socioeconomic implications in the country.
This is the scenario, at least, in many developing countries, besides some developed nations, as well, as I shall narrate below. Therefore, the high price of cancer drugs has now assumed a global dimension.
High price of cancer drugs – now a global issue:
This ‘ghost’ haunts even the largest ‘free market’ in the globe – the El Dorado of the drug players, across the world – the United States, as evident from various reports and expert analysis on the subject.
“Financial toxicity caused by high cancer drug prices is harming people’s ability to fight the dreaded disease” – warned the latest President’s Cancer Panel Report released on March 13, 2018. ‘President’s Cancer Panel’ monitors the activities of the National Cancer Program and report to the President of the United States on barriers to progress in reducing the burden of cancer. The Panel was established by law in 1971 when the National Cancer Act was enacted by President Richard Nixon.
In 2013, cancer patients paid, on an average – USD 207,000 a year for their medications. This is against USD 54,100 a year in 1995. Whereas, in 2015, cancer patients paid from USD 7,484 to USD 21,834 a month, for new breakthrough drugs, just for survival – the report highlights.
If the situation remains unchanged: “More radical steps could be taken to force down drug prices, even in the United States, where health care is largely a private, decentralized affair. Under federal law, the US government has the right to procure generic versions of patented drugs in exchange for ‘reasonable’ royalties that compensate patent holders.” This warning was articulated in an article, titled “Bringing down the cost of cancer treatment”, published in the International journal of science - Nature on March 07, 2018. It also reminds: “Innovative drugs have the potential to save lives worldwide – if they are affordable”.
‘High cancer drug cost is for high cost for innovation’ – can’t be justified:
Yes, that’s the most common justification coming from the innovators for new cancer medications. The Tufts Center for the Study of Drug development (CSDD), published in the May 2016 edition of the Journal of Health Economics, estimates the R&D cost of new drugs at USD 2.870 billion. This study is based on 106 randomly selected new drugs were obtained from a survey of 10 pharmaceutical firms. Whereas, the November 2017 paper, published in the JAMA Internal Medicine, found that the cost of developing a new cancer drug is USD 648.0 million, which is significantly lower than the above Tuft Center Study. Importantly, the revenue since approval, was found to be substantial with median, USD 1658.4 million – ranging from USD 204.1 million to USD 22 275.0 million) – The JAMA study reported.
This paper was based on the analysis of the US Securities and Exchange Commission filings for drug companies with a number of drugs on the US market that received approval by the US Food and Drug Administration as a cancer drug from January 1, 2006, through December 31, 2015. Cumulative R&D spending was estimated from initiation of drug development activity to date of approval. Earnings were also identified from the time of approval to the present. The study was conducted between the period of December 10, 2016 and March 2, 2017.
“The number, coupled with the revenue the drugs made after approval, flies in the face of the argument that drug companies need to set high prices to recoup their investments.” The observation was made in the article, titled “A new study undermines Big Pharma’s justification for charging high drug prices,” published in Business Insider, on September 11, 2017.In addition, the cancer drug prices are found disconnected from the benefits that they provide or the differential tangible value they offer. This is applicable both for old and new cancer drugs.
Drug prices are disconnected from the benefits provided – both for old and new:
High prices for cancer drugs – not just for the innovative ones, but also of older varieties, are a cause of concern, as they are getting increasingly disconnected from the benefits they provide. The February 2017 research article, published in JAMA Oncology flags some of these important facts. The paper is titled, ‘The Rising Price of Cancer Drugs—A New Old Problem?’
The authors find that the high price of cancer drugs is increasingly drawing criticism from leading academic researchers. They also find that new cancer drug pricing seems to bear no relationship to novelty or efficacy and are disconnected from the benefits provided. At the same time, price increases for older drugs have been less often discussed, although their investigation finds that older oncology drugs have undergone larger price increases than newer drugs, which needs to be taken care of, soon.
Cancer drugs are the cheapest in India, but are these affordable?
Cheapest cancer drug price in India? Probably, yes. But study shows, calculated against per capita income of Indians, they are still the least affordable. The June 2016 ‘Thomson Reuters Study’ on cancer drug prices in seven countries, presented at the annual meeting of the American Society of Clinical Oncology in Chicago, also underscored this issue. On June 06, 2016, Reuters reported from this study, although Americans pay the highest prices in the world for cancer drugs, but the treatments are the least affordable in lower income countries.
The study noted the lowest drug prices in India and South Africa. But after calculating price as a percentage of wealth adjusted for the cost of living, cancer drugs were found to be the least affordable in India and China. Moreover, not too long ago, on October 01, 2014, an Indian media report flashed a headline: “The price of Glivec, an anti-cancer tablet, for example, has risen from Rs 8,500 to Rs 1.08 lakh.”
Pharma continues to remain defiant:
In this complex situation, maintain status quo on the drug pricing strategy will be, I reckon, more counterproductive. There is no indication either, that pharma players are becoming less defiant in this area. For example, Washington DC based, probably the largest pharma lobbying organization, – PhRMA makes some absurd argument in favor of maintaining the status quo. It draws a simple linear relationship between reduction in cancer death rates and the high-priced cancer drugs. It was evident from the comment of its spokesperson on the ‘President’s Cancer Panel’ report. She, reportedlysaid that: “Thanks to these breakthroughs, the cancer death rate in the United States has fallen 25 percent since its peak and two out of three patients diagnosed with cancer are living at least five years after diagnosis.”
Whereas, the fact remains, the fall in cancer death rate takes place because of multi-factorial initiatives by the policy makers, such as, increasing awareness, early screening and detection, prompt initiation of various types of treatments and so on. And of course, the new innovative drugs are of the many, which a large number of patients find difficult to afford.
In search of a win-win solution to contain the public outcry over high price of cancer drugs, I shall dwell on some alternative drug pricing strategies, in my next article. However, to move meaningfully towards that direction, pharma players should realize the hard reality on the ground, across the globe that: “Financial toxicity caused by high cancer drug prices is harming people’s ability to fight the dreaded disease”. Alongside, don’t we also need a compassionate film maker unbridling the box office power to create a similar and a synergistic effect in this regard, as is now happening with ‘Dying to Survive’ social comedy movie, in China?
By: Tapan J. Ray
Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.