In the next few years, new cancer drug cocktails are set to reach the market will test the limits of premium pricing for life-saving medicines. This will force company executives to consider fresh market strategies.
Several companies say discounts will be needed when drugs costing more than $100,000 each are combined. Over the next few years dozens of new cancer combinations will be launched with the ones to treat lung cancer, melanoma and other solid tumors taking off strongly after 2018, suggest drug company pipelines.
Merck's Keytruda and Bristol-Myers Squibb's Opdivo drugs allow the body's defenses to recognize and destroy cancer cells. But the real promise lies in treatment combination either by using two checkpoint medicines together or by adding a different kind of drug. Both these approaches will drive up prices.
Opdivo and Yervoy would cost $174 billion, based on a combined list price of $295,000 for just under a year's treatment.
Cancer specialist Leonard Saltz, who presented the calculation in a speech to the American Society of Clinical Oncology annual meeting two months ago, said the conclusion was obvious, these drugs cost too much.
Some pharmaceutical executives, while insisting they need a decent return for their risk-taking, admit he has a point. "There's got to be a limit. One drug plus one drug can't equal the cost of two drugs. We recognize the need for oncology drug pricing to become more rational," told David Epstein, Novartis pharma head.
Roche, which is the world's biggest cancer drug supplier and is working on more immunotherapy combination trials than any other company, agrees there is a problem. "We need to keep the system sustainable. That is also in our interest," said Roche Chief Executive Severin Schwan.