Mayo physicians argue value-based pricing, FDA mandate could help lower cancer drug costs

Malignancies aren’t cheap — drug-manufacturing monopolies have made sure of it, two Mayo Clinic physicians opined in the October edition of the journal Mayo Clinic Proceedings.

Oncologist Mustaqeem Siddiqui, MD, and hematologist Vincent Rajkumar, MD, attributed virtual domination assumed by some drug manufacturers — a seed achieved partially because of the way treatment protocols operate — as one reason why cancer medications cost as much as they do within the U.S.

“Cancer care is not representative of a free-market system, and the traditional checks and balances that make the free-market system work so efficiently in all other areas are absent when it comes to most cancer treatment," Siddiqui and Rajkumar wrote.

As cancer treatments are not compatible with countertop choice — a process that affords both physicians and patients antibiotic options for other conditions — a prescriber’s selection of drug is very limited and specific. It’s this sequential or meticulous combination administration necessary to cancer treatments that aids in the composition of a virtual monopoly, Siddiqui and Rajkumar argued.

Components such as the expense of drug development; the lofty price-tag patients and insurers are willing to absorb for even modest improvement in outcomes; as well as the absence of regulations like cost effectiveness analyses, which account for economic and value-based considerations when vying for drug approval and pricing, are other key factors contributing to the monopolization, the physicians said.

Siddiqui and Rajkumar proffered the below recommendations as possible remedies for the cancer treatment system:

  • Value-based pricing that includes discrete metrics such as an incremental cost effectiveness ratio per quality-adjusted-life-years gained, as a result of a particular treatment. Quality-adjusted-life-years is an estimate of the number of years added to a patient's life by a specific drug intervention, adjusted for quality of life.
  • A U.S. Food and Drug Administration mandate requiring drug companies to submit a value dossier when seeking drug approval. This information would give patients and physicians the ability to make better-informed decisions about treatment.
  • Centers for Medicare & Medicaid Services powers to negotiate payments for cancer drugs.
  • Improved national cancer guidelines providing evidence-based analysis of quality of life, mortality data, benefits, risks and cost for all possible treatment options.
  • Monopoly rules to determine if a particular drug will operate in a monopoly situation. Such drugs would be subject to legally mandated or voluntary price controls in exchange for expedited approval or other remedy.
  • Non-profit generic drug companies to manufacture and distribute generic cancer drugs at a very low cost.