Receiving a cancer diagnosis can be a very frightening and stressful experience. For many people, this stress is exacerbated by the thought of covering the high costs of treatment. Cancer medicines are a significant driver of cancer treatment costs, and this cost is rising1. Catherine Tomlinson examines whether high prices commonly charged for cancer medicines are justified and necessary, and considers what can be done to curb rising costs.
We often hear that cancer medicine is expensive because it’s ‘under patent’, what does this actually mean?
A patent is a government granted 20-year monopoly that allow patent holders (pharmaceutical companies) to sell their products without facing competition. In SA, it is common for companies to seek and receive multiple patents on individual medicines as a tactic to extend their patent monopolies long beyond 20-years2. During extended patent terms, pharmaceutical companies commonly charge exceptionally high prices for patented medicines in order to maximise their profits3.
How do patents impact on medicine access?
The high prices charged by pharmaceutical companies for medicines under patent often significantly impedes on access. Case study research, in SA, has demonstrated that patented medicines are often unavailable in the public sector and excluded from medical scheme’s formularies for conditions listed under Prescribed Minimum Benefits (PMBs) due to their high costs4.
Yet in assessing whether or not medicines are ‘cost-effective’, should governments simply accept the price offered by monopoly holders? Health economists, in the UK, have argued that – given the life and death consequences of medicines access – greater transparency regarding the actual costs of medicine research, development and production must be demanded and considered in making these decisions5.
What does it actually cost to produce cancer medicines?
As said above, UK health economists argue that governments and medical schemes must consider the actual costs of medicine production, rather than simply accepting the prices charged by monopoly holders, seeking to maximise profits. These researchers have demonstrated that the actual costs of medicines’ production are often a fraction of the prices charged for cancer medicines by monopoly holders6,7,8.
Additionally, research by the Cancer Alliance and Fix the Patent Laws has demonstrated that generic versions of many cancer medicines are already available outside of SA at far lower prices than those charged by patent holders in SA. (See table at top.)
|Originator price in South Africa||R 14,625.46 (Janssen)||R218.76 (Bayer)||R3,708.40 (Celgene)|
|Generic price in India||R3,777.27 (Nacto, Glenmark)||R12.13
But don’t PHARMACEUTICAL companies need to charge high prices to recoup the costs of research and development (r&d)?
A common claim of industry is that high prices charged for patented medicines are necessary to recoup investment costs for initial R&D – but the actual amounts spent on R&D, by industry, remains a tightly-guarded secret9. Available evidence suggests that the actual amounts spent by industry on R&D pales in comparison to what is spent on marketing and recouped in profits10.
Without regulated transparency of what it actually costs to develop new medicines, it often is impossible to assess the real relationship between prices charged and R&D expenditure. Seeking to better understand this relationship, Knowledge Ecology International (KEI) undertook an independent assessment of what it actually cost to develop imatinib – a World Health Organsation (WHO) recommended essential treatment for chronic myeloid leukemia – using available data.
By KEI’s most generous estimate, Novartis contributed 10% of the medicine’s early research costs and recouped its entire R&D expenditure every 13 days from the sale of the patented product11. Under a 20-year patent, Novartis would recoup its R&D expenditure on imatinib more than 560 times.
With new cancer medicines being increasingly priced out-of-reach for most people, it is no longer acceptable for companies to simply say that high prices are needed to recoup R&D expenditure, without disclosing these costs.
BUT PHARMACEUTICAL COMPANIES ARE SO WEALTHY AND POWERFUL, CAN ANYTHING BE DONE?
During the late 1990s and early 2000s, the exceptionally high prices of patented HIV medicines inhibited access to millions of people in SA who needed these medicines to survive. Utilising litigation, social mobilisation and other advocacy strategies, HIV activists in SA were able to secure access of more affordable generic versions of these medicines, resulting in price reductions of more than 90%. Today, SA has the biggest HIV treatment programme globally, supplying life-saving treatment to more than three million people.
However, despite securing access to affordable first and second-line HIV treatments, medicines for many other diseases and newer HIV treatments remain unaffordable in the country. To address this challenge, Fix the Patent Laws is calling on government to adopt health safeguards into SA’s patent laws to improve medicine affordability and access for all illnesses.
In addition to seeking law reform, the Cancer Alliance and Fix the Patent Laws are advocating for affordable access to important cancer treatments, such as trastuzumab12 (Herceptin). To inform this work, we have created surveys to learn more from people living with cancer, cancer survivors and healthcare workers about access-challenges faced in seeking or providing cancer treatment in SA. Data collected through these surveys will be used to inform future research and advocacy by the Cancer Alliance and Fix the Patent Laws to tackle access barriers to cancer treatment in SA.
MEET OUR EXPERT – Catherine Tomlinson
Catherine Tomlinson is a researcher for the Cancer Alliance. She received a Master’s Degree in Public Health from the University of Cape Town, and previously worked for the Treatment Action Campaign and Doctors Without Borders towards improving medicine access in South Africa.