Prices for cancer treatments are insanely high

The latest drug to treat pancreatic cancer costs $663 a tablet or nearly half a million dollars a year, reports Rebecca Robbins for The New York Times. And, it’s not the only insanely expensive cancer treatment. Many new cancer drugs start off with prices of more than $400,000 a year.

The problem, of course, is that there is little competition when it comes to cancer treatment and no regulation of most drug prices. Most insurers, including Medicare, must cover all FDA-approved drugs. So, drug manufacturers can charge pretty much what they please.

Two years ago, all of the nine new FDA approved cancer drugs cost at least $400,000 a year. Twenty years ago, new cancer treatments cost far less. Patients still generally must pay the copay. But, out-of-pocket costs for people with Medicare Part D are capped at $2,100 this year. Working people tend to have much higher out-of-pocket limits.

To be clear, these drugs are not cures and might not even extend someone’s life, but they do shrink tumors or keep them from growing. In a clinical trial, Rasonque, the new pancreatic cancer drug was shown to extend patients’ lives by a bit more than six months.

Patients are often taking several of these drugs at the same time. So, their treatment costs can be well over $1 million a year. While the sticker price for these drugs can be higher than the price paid, with new cancer drugs, the purchase price is close to the sticker price. And, there’s no good reason why other than that the companies charge it and the insurers pay it.

The companies claim research and development costs are high as a way to justify their high prices. But, their profits can be exorbitant. Only the US allows drug companies to set their prices.

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