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Specialty Pharmacy Oncology Update: Who’s in and What’s the Price?

Written by: Darren Young on Thursday, May 12, 2016 Posted in: Specialty Pharmacy

Specialty Pharmacy Oncology Update Who’s in and What’s the PriceOn April 28, drugmaker AbbVie Inc. acquired Stemcentrx Inc., along with its experimental Rova-T small cell lung cancer medication, for $5.8 billion. AbbVie’s purchase broadens its cancer treatment capabilities beyond its current blood cancer medications and lessens its dependence on its arthritis drug Humira, which is the world’s top-selling pharmaceutical1 according to a Reuters’ article.

Also on April 28, French drugmaker Sanofi made a $9.3 billion offer to buy U.S. drugmaker Medivation Inc., which is known for its prostate cancer drug, Xtandi. Sanofi is eager to purchase Medivation to expand its reach into the oncology market and to minimize the impact of declining sales of Lantus, Sanofi’s diabetes drug.2

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With big companies buying up smaller competitors and reducing the number of suppliers, how will this impact pricing for these expensive drugs? It is tough to say. Researchers at the University of North Carolina at Chapel Hill noted in a recent article in JAMA Oncology that, on average, new oral cancer drugs approved in 2014 were six times more costly than those introduced in 2000.3 In addition, many drugs continued to increase once they were on the market, such as Gleevec, from Novartis Pharmaceuticals. From Gleevec’s release in 2001 to 2014, the price spiked from $3,346 to $8,479, which is a 7.5% average annual increase.

The study’s findings could mean that the pricing system—high prices at market entry and steady increases over time—is not sustainable. However, orally administered cancer medications are resulting in better outcomes than intravenous chemotherapy, so drug manufacturers feel that higher prices are justified. While I realize that advancing medicine into the future costs more money, should it really be this much of a spike?

In addition, “Patients are increasingly taking on the burden of paying for these high-cost specialty drugs as [healthcare] plans move toward use of higher deductibles and coinsurance,” says study author Stacie Dusetzina, Ph.D., a UNC Lineberger Comprehensive Cancer Center member and an assistant professor in the UNC Eshelman School of Pharmacy and UNC Gillings School of Global Public Health. So where will this pricing trend leave those who are desperately fighting this deadly disease?

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