Cancer Drugs: The Controversial Cost


Tessa Tan



Cancer, with its many permutations, carries the greatest burden of disease in Australia at one-fifth the total disease burden.[1] The cancer burden is also growing globally; at 8.7 million deaths worldwide, it is now the second leading cause of mortality after cardiovascular disease.[2]

In the past decade, the rise of novel cancer drugs has revolutionised treatment for cancers with historically poor prognoses. Cancer drugs rank first in terms of global spending by therapeutic class.[3] The market for cancer drugs, valued at over $110 billion in 2015, is forecast to escalate to $147 billion by 2021.[4] Consequently, potential profit in this market has drawn big pharmaceutical players to the arena. However, we need to consider if these drugs are cost effective and affordable. Where does the burden of cost fall? What is access to cancer treatments like for vulnerable populations?


A question of value

The price of new cancer drugs increased more than five-fold from 2006 to 2015, a substantial amount even after adjusting for inflation.[5] Exorbitant drug prices are often justified on the grounds of recouping research and development costs, but Imatinib, a drug used for chronic myeloid leukaemia has quadrupled in price since its launch despite the availability of generics. Novartis tried to justify this price rise by describing its recently approved new indication, however research costs for the new indication had already been included in its original price.[6] In the scientific community, mechanisms behind drug pricing are aptly termed a “black box”.

The most expensive of these new drugs are biologics – a class of cancer medication not synthesised chemically, instead utilising whole cells, antibodies, enzymes and other cellular components to target molecular processes.[7] Some of these drugs exemplify the zenith of biotechnological innovation, but with prices like $630,000 AUD per patient for Novartis’ latest approved drug, they have the potential to eviscerate government health budgets. Biologics are expensive due to the inherent difficulty in replicating complex molecular structures. Once they are off patent, biosimilars can be produced, yet they only reduce prices by 10 to 30%, requiring further trials prior to approval because they are similar but not identical to their competition. The necessary expenses involved in the process form a barrier to entry, fuelling a drug development model prone to increasing market exclusivity and pricing power concentrated in the hands of a few pharmaceutical giants.

While we do want more efficacious drugs to be available to patients as soon as possible, the value that some of these drugs add at current prices is questionable. Most new cancer drug approvals are used to extend the lives of patients with terminally advanced cancers, as opposed to offering a cure. When researchers looked at cancer drugs approved in the United States and Europe between 2003 and 2013, they found the average extension of survival a only 3.5 months.[8] How much should those 3.5 months cost? WHO guidelines recommend $72,620 – $217,900 AUD per quality-adjusted life year (QALY), and suggest countries should aim to spend between 1 and 3 times their average GDP per capita per QALY gained from treatment.[9] But there are still examples of blatant price-gouging: gemcitabine-erlotinib, a treatment for metastatic pancreatic cancer, provides a survival gain of 10 days at $510,000/QALY.[10] This can happen because first approvals for most cancer drugs occur in the United States, where legislation (Medicare Reform Act 2003) prohibits Medicare from negotiating drug prices with manufacturers, effectively setting a global benchmark for prices with little consideration of value.

In the pursuit of value-based cancer care, it is prudent to consider that treatment-related side effects may decrease quality of life while only marginally extending quantity of life. For example, advanced lung cancer patients with early palliative care intervention alongside standard therapy were found to have better survival and quality of life than those treated with more aggressive treatments.[11] Additionally, costs of novel oncology drugs have increased disproportionately to clinical benefit, as measured by the ASCO Value Framework and European Society of Medical Oncology (ESMO) Magnitude of Clinical Benefit scale.[12] This was demonstrated in a 2018 study where less than one third of randomised clinical trials for approved cancer drugs met thresholds for producing meaningful clinical benefit.[13]

Some of these drugs are being granted market entry presumptively. Courtney et al’s review on cancer drugs approved by European Medicines Agency found no evidence of a survival gain in 90% of indications at the time of market approval – highlighting a need for modelling greater market uncertainty at the time of authorisation.[8] A case in point is bevacizumab, which was granted accelerated approval for metastatic breast cancer, but subsequently had its market authorisation removed when later findings revealed no improvement in overall survival.[14]

On that note, government approvals for cancer drugs need to be informed by rigorous, objective criteria; less easily swayed by pro-innovation bias and industry-funded studies using surrogate end-points, in order to eliminate perverse incentives for drugs that provide marginal benefit.


Access in low-middle income countries (LMIC)

An understated 70% of cancer mortality occurs in low to middle income countries, which may be attributed to social determinants of health and a lack of screening and resources, leading to late-stage cancer at the time of diagnosis.[15,16] Barriers to accessing cancer treatment exist in these countries, including access to therapeutic drugs.

According to an analysis of national formularies in LMICs, it was found that over 80% of them listed less than half of the cancer medications considered by the WHO to be essential, and a majority of LMICs did not have monoclonal antibodies, protein kinase inhibitors or alpha-interferon on their national essential medicines lists (NEML).[17] Medicines on NEMLs form the basis for public reimbursement and have a definite impact on access to cancer treatments.[17] These results indicate that access is suboptimal, though direct measurement of availability and affordability of oncology medicines in LMICs is an area that requires further research.

There is also a lack of access to clinical trials in LMICs, with only 2.7% of global cancer research investment directed to these areas.[18] Necessary policies, guidelines and regulatory requirements governing LMICs can complicate the conduct of collaborative trials. Additionally, cultural disparities, language barriers and differences in healthcare systems make conducting clinical trials in LMICs less appealing to industry giants, limiting access to novel cancer therapies. A scarcity of health infrastructure, expertise, patient support and trained human resources compound the effect.[19] For example, In sub-Saharan Africa, there is less than 1 pathologist per 500,000 persons, compared to 1 pathologist per 15,000 in the United States.[20] Cancer registries in LMICs are also conspicuously absent, making it tricky to accurately collect data on the burden of specific cancers to inform health policy and planning.

On the bright side, there have been progressive changes toward improving access in recent years. Notably, GlaxoSmithKline ceased filing for patents in low income countries in 2016, allowing cheaper generics to proliferate unhindered. Historically, the prohibitively high cost of anti-retrovirals put them beyond the reach of millions of HIV-positive South Africans for years, before generics were finally allowed to be imported.[21] More action by pharmaceutical companies to give up rights to exclusivity in LMICs should be encouraged.



Redressing the issue of overpriced cancer drugs will take the collective effort of policy makers, healthcare providers and patient advocates alike. We need to work to ensure that the benefits of these biotechnological breakthroughs reach all sectors of society, including low to middle income countries. A value-based model for drug pricing is crucial to achieving this goal. Furthermore, increased pharmaceutical pricing transparency, strong regulatory incentives for pharmaceutical companies to produce drugs with clinically meaningful benefits and policies encouraging cross-border importation of generics and biosimilars should also be implemented.





Photo credit

Image 1: public domain, accessed from

Conflicts of interest

None declared



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