The Failure of Big Pharma

The high cost of pharmaceuticals in America seems to crop up on the mainstream media's radar screen on occasion, however, recent data shows that the problem with Big Pharma goes far beyond pricing.

A recent article by Liz Szabo on the Kaiser Health News website gives us an interesting perspective on the cancer drug business.  According to Ms. Szabo, demands for earlier access to potentially life-saving oncology drugs has led to a flood of FDA-approved pharmaceuticals hitting the marketplace; that said, many of these new drugs are extremely expensive and offer patients marginal benefits.  In fact, the 72 new cancer therapies that were approved by the FDA offered patients a life extensions averaging only 2.1 months.  As well, two-thirds of the cancer drugs approved in the last two years have no evidence showing that they extend life at all.

A recent study by Tracy Rupp and Diana Zuckerman found that for 18 of the 36 drugs that were approved between 2008 and 2012, post-marketing studies showed that there was no "overall survival benefit".  Here is a table showing the drugs in the study, ranked by whether they improved the patient's quality of life, the type of cancer treated by the drug and the drug's annual cost:

Please note that only one drug actually improved the patient's quality of life while six showed no statistical difference, four had mixed results, two actually made the patient's quality of life worse and five had no evidence.  It is also interesting to note that the average annual costs for the drugs (whether they worked or not) ranged from $20,237 to a tear-jerking and wallet-opening $169,680.

While we are on the subject of the cost of these effective and not-so-effective cancer drugs, let's look at what has happened to the monthly and median price of cancer drugs between 1965 and 2016:

Here is a complete listing of the drugs, the monthly cost at the time of approval and the monthly cost in 2014 dollars:

In 2014 dollars, monthly cancer drug costs for drugs approved back in the 1960s range from $13 to $1,158.  The monthly cancer drug costs for the drugs released over the past five years (from 2011 to 2016) range from $5,535 to $64,260.  That's right, over $64,000 for a single month's worth of Blincyto, an injectable drug that is used to treat Ph-negative relapsed or refractory B-cell precursor acute lymphoblastic leukaemia.  The manufacturer, California-based Amgen, the world's largest independent biotechnology company, claims that clinical trials show that "41.6 percent of patients achieved a complete remission or complete remission with partial hematological recovery during the first two treatment cycles."  In case you were curious, Amgen's adjusted net income for 2015 was $7.954 billion, up from $6.7 billion in 2014 on sales of $20.944 billion.  The company spent and adjusted $3.917 billion on research and development. 

When you compile the information in this posting, you find that patients suffering from cancer are paying far more for drugs that, in at least some cases, provide marginal benefits when it comes to extending life.  The data also shows that the cost associated with these drugs can be considered nothing more than immoral, particularly when they are designed for use in cases where patients' lives are already threatened and they are at their most vulnerable, facing their own mortality.