Analysis of Launch and Postapproval Cancer Drug Pricing, Clinical Benefit, and Policy Implications in the US and Europe | Oncology | JAMA Oncology | JAMA Network
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Figure 1.  Median Monthly Cancer Drug Treatment Costs at Launch, Adjusted for Inflation and Currency, in the US, England, Germany, and Switzerland
Median Monthly Cancer Drug Treatment Costs at Launch, Adjusted for Inflation and Currency, in the US, England, Germany, and Switzerland

Dots represent drug launch prices, with Poisson fitted curve (line) and 95% CIs (shaded area).

Figure 2.  Median Inflation-Adjusted Price Changes of Cancer Drugs 1, 3, and 5 Years After Launch in the US, England, Germany, and Switzerland, 2009-2019
Median Inflation-Adjusted Price Changes of Cancer Drugs 1, 3, and 5 Years After Launch in the US, England, Germany, and Switzerland, 2009-2019

Costs adjusted for inflation.

Figure 3.  Postapproval Price Changes of Cancer Drugs in the US, England, Germany, and Switzerland, 2009-2019
Postapproval Price Changes of Cancer Drugs in the US, England, Germany, and Switzerland, 2009-2019

Dots represent mean unit prices (launch prices indexed to 100), and the curve indicates locally estimated scatterplot smoothing (LOESS) fit.

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    Original Investigation
    July 1, 2021

    Analysis of Launch and Postapproval Cancer Drug Pricing, Clinical Benefit, and Policy Implications in the US and Europe

    Author Affiliations
    • 1Institute of Law, and Laboratory for Technology, Markets, and Regulation, University of Zurich, Zurich, Switzerland
    • 2Program on Regulation, Therapeutics, and Law, Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital and Harvard Medical School, Boston, Massachusetts
    • 3Oncology Department, Hospital de la Santa Creu i Sant Pau, Institut d’Investigació Biomèdica Sant Pau, and
    • 4Oncology Department, Hospital de la Santa Creu i Sant Pau, Institut d’Investigació Biomèdica Sant Pau, Barcelona, Catalonia, Spain
    • 5Department of Medicine, Universitat Autònoma de Barcelona, Barcelona, Catalonia, Spain
    • 6Institute of Primary Care, University Hospital Zurich and
    • 7Institute of Primary Care, University Hospital Zurich/University of Zurich, Zurich, Switzerland
    JAMA Oncol. 2021;7(9):e212026. doi:10.1001/jamaoncol.2021.2026
    Key Points

    Question  Was there an association between clinical benefit, launch prices and postlaunch price changes for cancer drugs in the US compared with Europe (England, Germany, and Switzerland)?

    Findings  In this economic evaluation of the US compared with 3 European countries, launch prices of cancer drugs were higher in the US than in Europe; prices frequently increased faster than inflation in the US but decreased on inflation-adjusted terms in Europe. Launch prices and postlaunch price increases were not associated with clinical benefit in any country.

    Meaning  The findings of this study suggest that, although the US would need to take the most substantial steps to address the high costs of cancer drugs, Europe could also reexamine their pricing regulations to ensure better alignment with the clinical value.

    Abstract

    Importance  The high cost of cancer medicines is a public health challenge. Policy makers in the US and Europe are debating reforms to drug pricing that would cover both the prices of new medicines when entering the market and price increases after they are launched.

    Objective  To assess launch prices, postlaunch price changes, and clinical benefit of cancer drugs in the US compared with 3 European countries (England, Germany, and Switzerland).

    Design, Setting, and Participants  This economic evaluation identified all new drugs that were approved for use in the US, England, Germany, and Switzerland with initial indications for treatment of adult solid tumor and hematologic cancers. Analysis included drugs approved by the US Food and Drug Administration between January 1, 2009, and December 31, 2019, and by the European Medicines Agency and Swissmedic until December 31, 2019. Prices were adjusted for currency and inflation. Clinical benefit of drugs indicated for solid tumors was assessed using the American Society of Clinical Oncology Value Framework and European Society for Medical Oncology Magnitude of Clinical Benefit Scale. Using Spearman rank correlation coefficients, correlations between clinical benefit and launch prices and postlaunch price changes for each country were evaluated.

    Main Outcomes and Measures  Launch prices, postlaunch price changes, and clinical benefit of cancer drugs.

    Results  The cohort included 65 drugs: 47 (72%) approved for solid tumors and 18 (28%) for hematologic cancers. In all countries, the lowest median monthly treatment costs at launch were greater in 2018-2019 vs 2009-2010: $14 580 vs $5790 in the US, $5888 vs $4289 in Germany, $6593 vs $5784 in Switzerland, and $6867 vs $3939 in England. Between 2009 and 2019, 48 of 65 (74%) cancer drugs had price increases in the US that were greater than inflation. Only 1 of 62 (2%) drugs in England, 0 of 60 drugs in Germany, and 7 of 56 drugs (13%) in Switzerland had a median price increase greater than inflation. There were no associations between launch prices or postlaunch price changes and clinical benefit in any assessed country.

    Conclusions and Relevance  During this economic evaluation study period, launch prices of cancer drugs were substantially higher in the US than in the assessed similar high-income European countries, a gap that increased in the years after approval. Cancer drug prices frequently increased faster than inflation in the US but decreased on inflation-adjusted terms in Europe. Price changes were not associated with clinical benefit in any country.

    Introduction

    The high cost of cancer medicines to patients and health systems globally is a public health challenge. Spending on cancer drugs is projected to grow to $100 billion in the US and $50 billion in Europe by 2022.1 The financial toxicity of costly cancer medicines may include medication nonadherence and negative patient outcomes.2-4 This challenge of paying for cancer therapies likely will be magnified in the coming years by the effect of the ongoing COVID-19 pandemic on individual finances and national economies.5

    Policy makers in the US and Europe are debating reforms to drug pricing that would cover both the prices of new medicines when entering the market and price increases after they are launched. In the US, the Biden administration has proposed to limit drug price increases to inflation6 and, in its last months in office, the Trump administration released regulations to base the reimbursement for certain high-cost cancer and other biologic drugs by Medicare’s Part B program on the lowest price paid by other countries (the rules are pending court challenge).7 Although European countries generally have more comprehensive mechanisms for drug price assessment and negotiation than the fragmented system in the US, the approach taken varies between countries and has similarly come under scrutiny.8,9 In England, price increases are regulated by the government, and launch prices for many costly new medicines are negotiated through the National Institute of Health and Care Excellence.10 In Germany, manufacturers are permitted to set prices freely during a drug’s first year on the market, but the price is subsequently negotiated and established based on a formal assessment of the drug’s clinical benefit.10,11 In Switzerland, the Federal Office of Public Health negotiates drug prices with manufacturers and reassesses negotiated prices every 3 years after market entry.12

    Although earlier studies have focused on cancer drug launch or current prices,8,13,14 changes in the prices of cancer drugs after market entry can be substantial and may vary widely across countries. In addition, the association of price changes with drugs’ clinical benefit, assessed using validated value frameworks, such as the European Society for Medical Oncology Magnitude of Clinical Benefit Scale (ESMO-MCBS) and the American Society of Clinical Oncology Value Framework (ASCO-VF), have not been defined. In this study, we analyzed launch prices, postlaunch price changes, and clinical benefit of cancer drugs in the US compared with 3 European countries (England, Germany, and Switzerland) with national mechanisms for drug price negotiation and regulation. To inform ongoing policymaking, we also estimated the potential cost savings from implementing an inflation-linked rebate in the US.

    Methods
    Data Sources and Extraction

    Using the public Drugs@FDA database, we identified new drugs approved by the US Food and Drug Administration (FDA) between January 1, 2009, and December 31, 2019, with initial indications for adult solid tumor and hematologic cancers.15 We included all cancer drugs in our cohort that had also been approved by the European Medicines Agency (EMA) and Swissmedic by December 31, 2019, for the same indications as in the US by searching public databases of assessment reports of the EMA16 and regulatory approvals of Swissmedic.17 The FDA and EMA approval decisions are aligned in more than 90% for new drugs.18 The study did not require institutional review board approval because the data were based on publicly available information.

    We extracted launch prices and annual changes in prices until December 31, 2019, for the cancer drugs in our cohort for the US, England, Germany, and Switzerland. For the US, wholesale acquisition costs were obtained from Truven Micromedex19 and average sales prices, which includes rebates to certain private payers, when available, from Medicare.20 The US drug prices were then compared with ex-factory drug prices in England (National Health Services),21 Germany (Lauer-Taxe),22 and Switzerland (Federal Office of Public Health).23 European price data were converted to US dollars by applying the exchange rates at December 31, 2019. To adjust prices for inflation, monthly inflation data were obtained from the US Bureau of Labor Statistics (Consumer Price Index for All Urban Consumers)24 and the Organization for Economic Cooperation and Development statistical database.25 For launch prices and postlaunch prices until December 31, 2019, we calculated monthly treatment costs for each cancer drug using dosing information in the FDA-approved label (the eMethods in the Supplement).15 For drugs available in multiple strengths, we calculated the median cost across strengths and the lowest unit price for each month.

    To assess the clinical benefit of the cancer drugs included in our cohort, we applied 2 established value frameworks at product launch and at the end of the study period to the pivotal clinical trials supporting regulatory approval: the ESMO-MCBS, version 1.1,26 and the ASCO-VF, version 2.27 These value frameworks have been widely used in the literature, including in the context of the appropriateness of drug pricing.8 In addition, because the EMSO-MCBS tool cannot be applied to hematologic cancers, the evaluation of clinical benefit was restricted to drugs for solid tumors. Because the ASCO-VF was not intended to score single-arm studies, ASCO-VF scores were calculated only for drugs approved on the basis of randomized clinical trials. For drugs with multiple pivotal clinical trials yielding different clinical benefit scores, the highest score was used. Consistent with the developers of the value frameworks as well as previous studies, high benefit was defined as a score of 45 or more using the ASCO-VF and a score of A-B (in adjuvant or neoadjuvant therapy settings) or 4-5 (in palliative settings) using the ESMO-MCBS.8,28 Low benefit was defined as any other score.29,30

    Statistical Analysis

    Descriptive statistics were used to show temporal trends and differences between countries in launch prices and postlaunch price changes based on unit prices and monthly treatment costs for all assessed countries (the US, England, Germany, and Switzerland). In the primary analyses, we included all drugs for which pricing data were available (eTable 1 in the Supplement).

    For each country, we evaluated the correlation between launch prices and clinical benefit, as well as postlaunch price changes and clinical benefit, according to the ESMO-MCBS and ASCO-VF, using the Spearman rank correlation coefficient. We then estimated the potential cost savings as a proportion of total costs from implementing an inflation-linked rebate, which would require discounts for price increases exceeding inflation and is required for certain public payers, such as Medicaid. This potential inflation-linked rebate was calculated using the launch price, inflation rates (change in Consumer Price Index), and current price, consistent with Medicaid’s rebate formula.31,32 In addition, in sensitivity analyses, we repeated our analyses in the subgroup of drugs that had pricing data available in all countries and conducted a sensitivity analysis of average sales prices in the US.

    All statistical analyses were done in R, version 4.0.0 (R Foundation for Statistical Computing) using ggplot2, version 3.3.3, for plots. With 2-tailed testing, P < .05 was the threshold for statistical significance.

    Results

    Our study cohort included 65 cancer drugs that received initial regulatory approval by the FDA, EMA, and Swissmedic during the study period (eTable 1 in the Supplement). Forty-seven (72%) of the 65 drugs were approved for treatment of solid tumors and 18 (28%) were approved for treatment of hematologic cancers. Fifty-three (82%) drugs had pricing data available from all included countries (eTable 2 in the Supplement). ESMO-MCBS scores were available at product launch for 47 (100%) drugs and at postlaunch for 38 (81%) drugs, and ASCO-VF scores were available at those times for 37 (79%) and 36 (77%) drugs.

    Launch Prices

    After adjusting for currency and inflation, the median monthly treatment costs per patient at launch for the included cancer drugs were $11 755 in the US, $8305 in Germany, $6955 in Switzerland, and $7355 in England. Median monthly treatment costs at launch in the US were 1.45 (interquartile range [IQR], 1.19-1.81) times greater than those in Germany, 1.57 (IQR, 1.28-2.04) times greater than those in Switzerland, and 1.63 (IQR, 1.31-1.94) times greater than those in England. Similar results were obtained using unit prices, which were 1.49 (IQR, 1.06-2.08) times greater than those in Germany, 1.61 (IQR, 1.23-2.12) times greater than those in Switzerland, and 1.67 (IQR 1.26-2.04) times greater than those in England.

    In all countries, the lowest monthly treatment costs at launch were greater in 2018-2019 vs 2009-2010: $14 580 vs $5790 in the US, $5888 vs $4289 in Germany, $6593 vs $5784 in Switzerland, and $6867 vs $3939 in England (Figure 1). The US to other country ratios of lowest monthly launch costs were also greater in 2018-2019 vs 2009-2010: 2.48 vs 1.35 for the US to Germany, 2.21 vs 1.00 for the US to Switzerland, and 2.12 vs 1.47 for the US to England.

    Price Changes After Launch

    Overall, as of December 31, 2019, the median monthly treatment costs were 2.42 (IQR, 1.98-3.20) times greater in the US than Germany, 2.21 (IQR, 1.74-3.00) times greater in the US than Switzerland, and 2.02 (IQR 1.58-2.94) times greater in the US than England. Similarly, median unit prices were 2.48 (IQR, 1.99-3.77) times greater in the US than Germany, 2.23 (IQR, 1.74-3.45) times greater in the US than Switzerland, and 2.10 (IQR, 1.54-3.06) times greater in the US than England.

    Between 2009 and 2019, 48 (74%) of the 65 cancer drugs had unit price increases in the US that were greater than inflation (Figure 2 and Figure 3). Only 1 (2%) of the 62 drugs in England, 0 of the 60 drugs in Germany, and 7 (13%) of the 56 drugs in Switzerland had a median unit price increase greater than inflation. Overall, the median unadjusted postlaunch unit price change in the US was 4.9% annually and 2.7% annually after adjusting for inflation. By contrast, postlaunch unit prices had a median change of 0% before inflation (1.7% decrease after adjusting for inflation) in England and decreased by a median of 5.5% (6.3% decrease adjusted for inflation) in Germany and 2.4% (2.4% decrease adjusted for inflation) in Switzerland. Implementing an inflation-linked rebate in the US that would be triggered when price increases exceed inflation was estimated to result in a median 19.2% (IQR, 11.8%-34.2%) reduction from 2019 drug prices.

    Clinical Benefit and Price Development

    For drugs used in treatment of solid tumors, the median ASCO-VF score at product launch was 46.4 (IQR, 33.1-53.9), and the median ESMO-MCBS score was 3.0 (IQR, 2.0-4.0). With follow-up through the end of the study period, the median postlaunch ASCO-VF score was 52.8 (IQR, 43.5-67.0) and the ESMO-MCBS score was 4.0 (IQR, 2.3-4.0). There were no associations between launch prices and clinical benefit using the ASCO-VF or the ESMO-MCBS scores (eFigure 1 in the Supplement) or between postlaunch price changes and clinical benefit (eFigure 2 in the Supplement). Launch prices as well as postlaunch prices had weak correlation with clinical benefits in all countries and according to both frameworks (correlation coefficients <0.30) (eFigures 1 and 2 in the Supplement).

    Sensitivity analyses repeating all of the above analyses in the subgroup of 53 drugs that had pricing data available in all 4 countries, and using the average sales prices yielded similar results (the eResults, eFigure 3, and eFigure 4 in the Supplement). In addition, there was no association between annual prices and number of drug approvals (eTable 3 in the Supplement).

    Discussion

    The launch prices of cancer drugs in the US exceeded those in England, Germany, and Switzerland, and the gap in launch prices between the US and the other countries increased after launch. After approval, 74% of cancer drugs in the US had prices increases that exceeded inflation, while median drug prices decreased after accounting for inflation in England, Germany, and Switzerland. Combining the higher launch prices with recurring price increases after approval resulted in current cancer drug prices in the US that were a median of 2.10 to 2.55 times greater than corresponding prices in the 3 European countries.

    Our study findings underscore that policy makers seeking to address the high cost of cancer drugs will need to consider both launch prices and the cumulative effect of price changes after approval. In the US, recent legislation passed in the House of Representatives (Elijah E. Cummings Lower Drug Costs Now Act)33 and proposed in the Senate (Prescription Drug Pricing Reduction Act)34 both include provisions to limit drug price increases to the rate of inflation. The Elijah E. Cummings Lower Drug Costs Now Act additionally includes international reference pricing, which has faced substantial opposition from the pharmaceutical industry. The Biden administration has echoed the legislative call for a limit on drug price increases6 and could potentially use existing statutory authority (ie, without requiring new legislation) to implement the limit in the Medicare program.35 Such a program might have a disproportionate influence on cancer drug pricing, because Medicare is the primary payer for cancer care in the US. We estimated that an inflation-linked rebate, which is already in place for other public payers, including Medicaid and the Department of Veterans Affairs, would result in a median 19.2% reduction in cancer drug prices, compared with 2019 levels.

    Most of the difference in cancer drug prices between the US and European countries was attributable to higher launch prices in the US. This difference might be explained by the fact that, unlike the included European countries, the US does not have a comparable mechanism to assess the benefits and costs of new medicines and to use that review as the basis for pricing negotiations. Moreover, Medicare, the largest payer for cancer drugs, is prohibited from directly negotiating drug prices with manufacturers; instead, Medicare uses the average sales price in the private market (Part B for physician-administered drugs) or delegates negotiation responsibility to individual Part D plans (Part D for outpatient drugs). Cancer drugs are also one of the protected drug classes for which individual Part D plans are required to cover virtually all drugs approved by the FDA, which may constrain their bargaining power.36 The US could learn from the experience of other countries, such as Germany, which has a transparent and evidence-based system for assessing the clinical benefit of new drugs37,38; this benefit assessment could be used to inform reimbursement and patient cost-sharing for treatments and may be preferable to relying on prices negotiated by other countries. These value frameworks could be applied to evidence, if available, on clinical benefit in specific patient populations in the US that are underrepresented in cancer clinical trials, such as older individuals and racial and ethnic minorities.

    In Europe, drug pricing is often overseen or directly regulated by the government, and many countries have health technology assessment agencies with wide latitude to review new products and, in some cases, to help negotiate pricing contracts directly with manufacturers.9 We found that, in contrast to the US, drug prices tended to decrease over time, in inflation-adjusted terms, in Germany, Switzerland, and England (Figure 2). These price decreases emerged from different policy approaches. In Switzerland, price decreases reflect periodic reexaminations of drug prices by the Federal Office of Public Health: by law, prices are reexamined every 3 years or sooner in certain cases, such as new approved indications.39 In Germany, both launch and postlaunch price changes are a result of drug pricing reforms in 2010; under the Act on the Reform of the Market for Medical Products, manufacturers may freely set launch prices in the first year the drug is on the market, after which the added benefit of new drugs is reviewed and prices subsequently subjected to negotiation.37 In England, cancer drug prices may be negotiated as part of multiyear managed access agreements. In addition, the United Kingdom’s Department of Health and Social Care also negotiates a voluntary, industry-wide agreement under which manufacturers agree to cap cost growth for brand-name drugs at predetermined levels.40

    Across all 4 countries, our study suggests that more could be done to align the price of new cancer therapies with their clinical benefits. We found no association between the clinical benefit of cancer drugs and their launch prices or postlaunch price changes in any of the 4 included countries. Notably, Germany, Switzerland, and England all have national bodies tasked with assessing and reassessing the prices of new drugs. Our results suggest that validated value frameworks, such as the ESMO-MCBS and ASCO-VF tools, could help identify drugs with low or uncertain clinical benefit that ought to be prioritized for these price renegotiations. These frameworks would also help identify therapies with evidence of superior clinical benefit that should be made rapidly accessible to patients across countries.

    Limitations

    This study has limitations. First, our study cohort included cancer drugs that had been approved by the FDA, EMA, and Swissmedic, and did not include drugs that were not approved by these regulators. The clinical benefit and prices of drugs that were not approved in all jurisdictions may differ from those that were.38 Second, monthly costs in this study were at the national level and might not reflect the prices paid by individual health insurers or by patients. The terms of managed access schemes (such as in England) are confidential and therefore excluded, which could mean that our analysis of price differences between the US and the assessed European countries may underestimate differences in net prices. Third, we evaluated the clinical evidence reviewed by the FDA for assessment of the ASCO-VF and ESMO-MCBS scores and did not include any studies that may have been submitted for consideration to the EMA and Swissmedic but not to the FDA. However, previous studies have reported that the FDA and EMA generally review the same set of clinical studies before and after regulatory approval.41,42

    Conclusions

    This study found that launch prices of cancer drugs were substantially higher in the US than in similar high-income European countries (England, Germany, and Switzerland)—a gap that has increased over time. In the years after approval, cancer drug prices frequently increased faster than inflation in the US, but decreased on inflation-adjusted terms in England, Germany, and Switzerland. Price changes were not associated with clinical benefit in any of the 4 countries. Although the US would need to take the most substantial steps to address high cancer drug costs, the other countries could also reexamine their drug price-negotiating policies to ensure those policies better reflect the clinical value of the drugs.

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    Article Information

    Accepted for Publication: April 21, 2021.

    Published Online: July 1, 2021. doi:10.1001/jamaoncol.2021.2026

    Corresponding Author: Kerstin N. Vokinger, MD, JD, PhD, LLM, Institute of Law, University of Zurich, 8001 Zurich, Switzerland (kerstinnoelle.vokinger@usz.ch).

    Author Contributions: Dr Vokinger and Mr Hwang contributed equally and had full access to all of the data in the study and take responsibility for the integrity of the data and the accuracy of the data analysis.

    Concept and design: Vokinger, Hwang, Kesselheim.

    Acquisition, analysis, or interpretation of data: All authors.

    Drafting of the manuscript: Vokinger, Hwang, Daniore.

    Critical revision of the manuscript for important intellectual content: Vokinger, Hwang, Lee, Tibau, Grischott, Rosemann, Kesselheim.

    Statistical analysis: Hwang, Daniore, Lee, Grischott.

    Obtained funding: Vokinger, Kesselheim.

    Administrative, technical, or material support: Vokinger, Rosemann.

    Supervision: Vokinger, Tibau, Rosemann, Kesselheim.

    Conflict of Interest Disclosures: Dr Tibau reported receiving personal fees from Roche for lectures and travel grants from Roche, Ipsen, Pfizer, and Lilly outside the submitted work. No other disclosures were reported.

    Funding/Support: The study was conducted with the support of the Swiss National Science Foundation and Swiss Cancer Research Foundation (Krebsforschung Schweiz). Dr Kesselheim was also supported by Arnold Ventures.

    Role of the Funder/Sponsor: The funding organizations had no role in the design and conduct of the study; collection, management, analysis, and interpretation of the data; preparation, review, or approval of the manuscript; and decision to submit the manuscript for publication.

    Additional Contributions: Camille Glaus, JD (University of Zurich), helped with the revision of the manuscript; she received compensation.

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