Tuesday, January 31, 2012

Price Restraint in Oncology?

By Michael McCaughan / Email the Author

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The flurry of breakthrough cancer drug approvals shows no signs of abating. But the most recent approval suggests that six-figure price tags may not be the norm after all.

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FDA’s January 30 approval of Roche/Curis’ Erivedge (vismodegib) for basal cell carcinoma continues the trend of rapid approvals of targeted cancer therapies, building on an incredible year in 2011.

But one trend from 2011 may not be carrying over: the six-figure price tag for the new oncology therapies.

Roche is pricing vismodegib at $7,500 per month, with an expected average duration of therapy of 10 months. That’s $75,000—but it isn’t over $100,000 like Yervoy, Xalkori, and Adcetris from the class of 2011. Indeed, counting Incyte’s late 2011 approval for Jakafi, with an announced price of $85,000, that makes two in a row that stayed out of six figures.

Okay, granted that all of these “prices” only distantly relate to what any individual patient or insurer ends up paying for a course of therapy, but still: the launch price attracts a lot of attention. And, while it may be odd to treat $75,000 and $85,000 price points as “low,” it is probably to the whole industry’s benefit that the streak of six figure prices in oncology was broken.