As Democrats’ hopes of Medicare drug price negotiations seem further out of reach, a new study shows that increased competition in the cancer drug market has not, in fact, led to price decreases — well, not in the US at least.
Between 2009 and 2020, prices increased — with one exception — within and across all 12 cancer drug classes studied in the US, whereas prices in Switzerland and Germany generally decreased over time or did not rise more than inflation, according to a recent publication in the Lancet.
Kerstin Vokinger“Irrespective [of] whether a competitor entered the market or not, prices were rising in the US,” lead author and University of Zurich assistant professor Kerstin Vokinger told Endpoints News. “And by contrast, we can see another development in Europe where we have regulated prices, which indicates that negotiation and regulations help to have affordable prices and improve access to patients.”
Cancer drug prices in the US rose a median of 6% two years after market entry, and 15% four years after market entry, researchers reported. Meanwhile, in Europe, prices fell 21% in Germany and 1.5% in Switzerland two years after market entry, and 26% in Germany and 13% in Switzerland four years after market entry.
The US cancer market saw steadily increasing monthly prices within and across all classes — ranging from immunotherapies to PARP inhibitors to PD-1/PD-L1 inhibitors — with the exception of one outlier, Sanofi and Regeneron’s VEGF/VEGFR inhibitor aflibercept for the treatment of colorectal cancer. Most price changes in the US — 53% of them — occurred at the end or beginning of the calendar year, with the next most common time for price changes being in June, according to Harvard medical professor and co-author Aaron Kesselheim.
What’s behind these hefty price increases? Negotiations, for one, the authors write.
While American manufacturers are free to set prices however they see fit, Germany’s Federal Joint Committee decides on a drug’s added benefit over standard of care, which serves as the basis for price negotiations starting one year after that drug hits the market. And in Switzerland, the Federal Office of Public Health negotiates drug prices with manufacturers on the basis of external reference pricing and therapeutic comparisons, reassessing every three years or so.
John Cornyn“Our findings suggest that effective negotiation, as practised in Germany or Switzerland, could be a model for policy makers in the USA to help address the high price of cancer drugs in the USA, both at launch and after launch,” the authors wrote.
However, US lawmakers remain split on the issue, as was made clear in last week’s Senate Finance Committee hearing. While Senate Finance Chair Ron Wyden (D-OR) sought to resurrect Medicare negotiations in a hearing last Wednesday, Republicans in the committee voiced strong opposition.
“One person’s negotiation is another person’s price controls,” Sen. John Cornyn (R-TX) said at the hearing.
Wyden countered that a “Medicare negotiation is just that — a process, not a price control — a market-based approach to come to a price between purchaser, Medicare and producer.”
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