Citation: Chen, A. J, Hu, Z., Conti, R. M., Jena, A. B., & Goldman D. P. (2019). Trends in the price per median and mean life-year gained among newly approved cancer therapies 1995 to 2017. Value in Health.
High and climbing launch prices for new cancer therapies have raised concern among the public and led to calls for legislative action. Though it is indisputable that prices have increased—every new cancer drug launched in 2017 was priced over $100,000— these drugs may also result in better health and, therefore, be worth it.
Thus, a key policy question is whether the clinical gains offered by these drugs in treating specific cancer indications justify the price increases. Essentially: how should we measure the value of these drugs?
A new study by Schaeffer Center researchers Alice Chen, Dana Goldman and colleagues sheds light on this question and finds that drug value has kept pace with the rising prices. Benefit-adjusted prices for these new cancer drugs have actually remained flat between 2013 and 2017.
The prices of newly approved cancer drugs have risen over the past decades. A key policy question is whether the clinical gains offered by these drugs in treating specific cancer indications justify the price increases.
To evaluate the price per median and mean life year gained among newly approved cancer therapies from 1995 to 2017.
We collected data on the price (in 2017 USD) per life-year gained among cancer drug-indication pairs approved by the US Food and Drug Administration (FDA) between 1995 and 2017. We modeled trends using fractional polynomial and linear spline regression models that controlled for route of administration and cancer type fixed effects.
We found that between 1995 and 2012, price increases outstripped median survival gains, a finding consistent with previous literature. Nevertheless, price per mean life-year gained increased at a considerably slower rate, suggesting that new drugs have been more effective in achieving longer-term survival. Between 2013 and 2017, price increases reflected equally large gains in median and mean survival, resulting in a flat profile for benefit-adjusted launch prices in recent years.
Although drug costs have been rising more rapidly than median survival gains, they have been rising at about the same rate as mean survival gains. This suggests that when accounting for longer-term survival gains, the benefits of new drugs are roughly keeping pace with their costs, despite rapid cost growth.