Democrats' new drug pricing law will likely deliver a financial blow to one of the fastest-growing and most lucrative segments of the pharmaceutical industry: cancer drugs.
Democrats' new drug pricing law will likely deliver a financial blow to one of the fastest-growing and most lucrative segments of the pharmaceutical industry: cancer drugs.The drug industry argues that the new law will keep oncology treatments from reaching some patients who need them. But experts say the current system lets companies profit from developing drugs that yield only incremental advances — and that cancer drugs will still be valuable enough for companies to pursue.
But the cancer market is unique, both in terms of its recent growth trajectory and in how drugs' uses typically evolve once they’re already on the market.Research on cancer drugs after initial approval "will be gutted by this bill," Stephen Ubl, CEO of the industry trade group Pharmaceutical Research and Manufacturers of America,"It tells researchers that their successful post-approval research will quickly be subject to government price setting.
Drug companies argue the limitation on their ability to maximize a cancer drug’s revenue will mean it may not be worth it to look for new indications of the drug.that 15 fewer drugs would be introduced to the market over a 30 year period as a result of the law. Put into context, about 1,300 drugs typically would be approved over the next 30 years under current law.
"If a supplemental indication is a big enough group of cancer patients, then it will still make financial sense to seek a label expansion to those patients," Kesselheim said.Rachel SachsAnd the law may actually encourage drugmakers to focus on more truly novel products, Sachs argued. "We may not need companies to develop another inhibitor — and so, it's the case right now that pharma isn't always choosing to invest in the spaces that are the best spaces.
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