The World Health Organization (WHO) has a problem with the current state of cancer drug prices.
In a recent report (PDF), the WHO found that cancer drug research and development costs “may bear little or no relationship to how pharmaceutical companies set prices of cancer medicines.” The researchers, whose report was earlier cited by Axios, went on to note that prices are often set by a pharmaceutical company’s ability to make as much as possible on medicines, regardless of their cost.
“Pharmaceutical companies set prices according to their commercial goals, with a focus on extracting the maximum amount that a buyer is willing to pay for a medicine,” the researchers wrote. “This pricing approach often makes cancer medicines unaffordable, preventing the full benefit of the medicines from being realized.”
In one example, the researchers found that in cases of little to no insurance coverage, some people forego treatment altogether because of the cost. The health agency said that for someone who has early stage breast cancer, the medications to treat it carry a cost equal to 1.7 years of wages for the average American. Surgery, supportive care, and other necessities would increase the cost even more.
Citing data from the American Medical Association, the researchers added that drug companies make $14.50 on every $1 they spend on research and development for cancer drugs.
Bringing costs down or at least modifying how pharmaceutical companies set their pricing might be seen as a solution. But the WHO acknowledged that even in countries where “cost-containment measures” are in place, cancer drug treatments are “reduced, delayed, and even cancelled.”
In a statement to Axios, the Pharmaceutical Research and Manufacturers of America, which represents drug companies, called the report “wrong on the facts and deeply flawed” and said that it “fails to properly account for the value that cancer medicines provide to patients, health care systems and societies.”
But the WHO is clear in believing that patients need support—and they’re being charged too much to get it.
“The totality of evidence suggests that current pricing policy for cancer medicines has not adequately met health- and economic-related objectives,” the WHO wrote. Prices of medicines are high in both absolute and relative terms compared to other therapeutic areas.”
The WHO went on to say that a “power imbalance” exists between patients and drug companies and “compromises the ability of the system and individuals to pay for these medicines, and deliver quantities less than what would be required for maximizing societal welfare.”