The Price of Re­lief: Ex­plor­ing So­lu­tions to the Ris­ing Costs of On­col­o­gy Drugs

In 2020, The Na­tion­al Can­cer In­sti­tute es­ti­mat­ed about 1.8 mil­lion new cas­es of can­cer di­ag­nosed in the Unit­ed States, while the costs as­so­ci­at­ed with treat­ment ther­a­pies con­tin­ued to es­ca­late. Giv­en the cur­rent leg­isla­tive cli­mate on drug pric­ing, it’s nev­er been more im­por­tant to look at the evo­lu­tion of drug pric­ing glob­al­ly and con­trol con­cerns of sus­tain­able and af­ford­able treat­ments in on­col­o­gy.

With decades of ex­pe­ri­ence de­vel­op­ing new drugs to treat can­cer and study­ing health eco­nom­ics and out­comes re­search, Gilber­to De Li­ma Lopes, M.D., Pro­fes­sor of Clin­i­cal Med­i­cine and As­so­ciate Di­rec­tor for the Sylvester Com­pre­hen­sive Can­cer Cen­ter at the Uni­ver­si­ty of Mi­a­mi, is very fa­mil­iar with the ups and downs of drug pric­ing in the mar­ket.

Check­point Ther­a­peu­tics, a clin­i­cal-stage im­munother­a­py and tar­get­ed on­col­o­gy com­pa­ny, sat down with Dr. Lopes to get his in­sights on the evo­lu­tion of drug pric­ing and the op­por­tu­ni­ty to com­pete through a low­er price mod­el.

Gilber­to De Li­ma Lopes, M.D., Pro­fes­sor of Clin­i­cal Med­i­cine &
As­so­ciate Di­rec­tor, Sylvester Com­pre­hen­sive Can­cer Cen­ter,
Uni­ver­si­ty of Mi­a­mi.

What are the main fac­tors dri­ving on­col­o­gy drug pric­ing to­day?

Dr. Lopes: The main dri­vers of drug pric­ing are in­no­va­tion – the cost of ac­tu­al­ly de­vel­op­ing drugs – and the pow­er that phar­ma­ceu­ti­cal com­pa­nies have to set prices in the U.S. Even on­col­o­gy drugs that have been in the mar­ket for years con­tin­ue to rise in cost, sim­ply be­cause big phar­ma­ceu­ti­cal com­pa­nies of­ten go un­chal­lenged.

Do you be­lieve on­col­o­gy in the U.S. is or will be­come a more cost-sen­si­tive mar­ket?

Dr. Lopes: We’ve been pre­dict­ing a cost-sen­si­tive mar­ket for at least 10 years, but it re­al­ly hasn’t hap­pened yet. It’s still a mar­ket with among the high­est prices around the world. When we re­al­ly look at the price of med­ica­tions over­all, they tend to be be­tween 10% and 15% of health­care ex­pen­di­tures.

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How do you see drug pric­ing evolv­ing in glob­al com­mu­ni­ties that are strug­gling to ac­cess health treat­ments?

Dr. Lopes: Even in high-in­come coun­tries, we see a num­ber of dif­fer­ent strate­gies to con­trol drug prices, which in­clude reg­u­la­tions, the use of ref­er­ence pric­ing and health tech­nol­o­gy as­sess­ments to see if a new drug should be in­clud­ed or not. For in­stance, in the UK, The Na­tion­al In­sti­tute for Health and Care Ex­cel­lence (NICE) and the phar­ma in­dus­try reach agree­ments on cost-ef­fec­tive prices, with reg­u­la­tors de­cid­ing what is ap­pro­pri­ate for the coun­try. So, for low-in­come coun­tries, they just don’t have the abil­i­ty to pay for the drugs. And even in large, mid­dle-in­come coun­tries – take Brazil for ex­am­ple, you don’t see any use of im­munother­a­py due to ex­pen­sive pric­ing for what the mar­ket can pay and the pub­lic health­care sys­tem can bear.

Giv­en the cur­rent U.S. re­im­burse­ment en­vi­ron­ment, what strate­gies might we see com­pa­nies fol­low­ing to of­fer low­er prices?

Dr. Lopes: While the U.S. con­tin­ues to re­im­burse, es­pe­cial­ly when we’re talk­ing about non-com­mer­cial pay­ors, they con­tin­ue to fol­low the drug prices set by the phar­ma­ceu­ti­cal in­dus­try. One strat­e­gy new mar­ket en­trants may adopt is to ac­tu­al­ly ini­ti­ate low­er prices and com­pete on those low­er prices.

Do you think these strate­gies could be suc­cess­ful?

Dr. Lopes: Ab­solute­ly. Pay­ors would cer­tain­ly have an in­ter­est in be­ing able to bar­gain the pow­er for drugs that have the same in­di­ca­tion and pay for the cheap­er one.

How do you think the pric­ing land­scape in on­col­o­gy will evolve over time?

Dr. Lopes: We will con­tin­ue to have tru­ly in­no­v­a­tive drugs that will com­mand a high­er price in the mar­ket. The sys­tem of­fers patents to re­ward in­no­va­tion, but we need mid-tier com­pe­ti­tion for those drugs be­fore you lose the patent pro­tec­tion. Of course, you will not be able to use the same drug, but if you are able to de­vel­op oth­er agents that will tru­ly com­pete, that would be use­ful. Re­al com­pe­ti­tion has been hard to come about in the U.S. health­care sys­tem.

Are there any oth­er strate­gies that could be ben­e­fi­cial when it comes to of­fer­ing low­er price points?

Dr. Lopes: In dif­fer­ent health­care sys­tems around the world, we see cer­tain drugs not be­ing of­fered or not be­ing re­im­bursed, un­less there’s a re­sponse or some sort of clin­i­cal ben­e­fit that can be mea­sured among pa­tients. In the U.S., we don’t see that hap­pen­ing at all.

Out­come-based pric­ing strate­gies are a way for the phar­ma­ceu­ti­cal in­dus­try in the U.S to show that they’re try­ing to help in­crease ac­cess. How­ev­er, in a re­im­burse­ment set­ting where big phar­ma has the fi­nal say on costs, as long as there’s an in­di­ca­tion and there’s clin­i­cal ev­i­dence of ben­e­fits, those strate­gies will not re­al­ly make a big change.

Do you think out­come-based pric­ing can work in the U.S. or in any glob­al mar­ket?

Dr. Lopes: With out­come-based pric­ing, the ben­e­fit is in the eye of the be­hold­er. The biggest is­sue with out­come-based pric­ing is get­ting the pay­or and phar­ma to agree on what the ben­e­fits would be, which is usu­al­ly sub­ject to ne­go­ti­a­tion. An­oth­er hur­dle is the need to cre­ate an in­fra­struc­ture that can mea­sure whether out­come-based pric­ing is help­ing or not. In the end, you have both the con­cept is­sue to see what’s go­ing to be con­sid­ered an ad­e­quate out­come and the ac­tu­al prac­ti­cal is­sues of im­ple­ment­ing it.

In a per­fect world, if every­one came to agree­ment on what a good re­sponse means, would out­come-based pric­ing be a suc­cess­ful mod­el?

Dr: Lopes: I think it would. Out­come-based pric­ing is a very im­por­tant mod­el for us mov­ing for­ward. It’s not just com­pe­ti­tion with fast fol­low­ers, but out­come-based pric­ing would be im­por­tant to im­ple­ment as much as we can.

With in­di­ca­tions of the strat­e­gy work­ing, it be­comes cheap­er to do. Es­pe­cial­ly out­side of the U.S. and West­ern Eu­rope, it be­comes cheap­er to con­duct clin­i­cal tri­als, and show that you have sim­i­lar ef­fi­ca­cy. How­ev­er, the strat­e­gy does have a caveat for adop­tion by com­par­ing old­er stan­dards of care and not the cur­rent stan­dard of care.

But as long as you see re­sults sim­i­lar to those in the cur­rent stan­dard of care, and that new drugs have the same ef­fi­ca­cy, you would have health­care sys­tems – es­pe­cial­ly pay­ors – in­creas­ing in­ter­est in the low­er cost op­tions.


Dis­claimer: Gilber­to De Li­ma Lopes, M.D., re­ceived com­pen­sa­tion from Check­point Ther­a­peu­tics for his time to par­tic­i­pate in this in­ter­view. How­ev­er, the views and opin­ions ex­pressed in this ar­ti­cle are his and do not nec­es­sar­i­ly re­flect the of­fi­cial po­si­tion of Check­point Ther­a­peu­tics.

Author

Checkpoint Therapeutics