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Cancer drug pricing process needs transparency, Australia

Greater transparency surrounding the pricing negotiations of cancer treatments is just one step that can be taken now to improve access to lifesaving drugs, according to the authors of a Perspective published in the Medical Journal of Australia.

Mr Narcyz Ghinea and Dr Wendy Lipworth from the Centre for Values, Ethics and the Law in Medicine at the University of Sydney wrote that exorbitant prices shouldn’t be ignored when examining ways to improve access to cancer medicines.

A much anticipated Senate report released last year called Availability of new, innovative and specialist cancer drugs addressed the burden of cancer on our society, however it missed one important area of concern, Ghinea and Lipworth wrote.

“What was notably absent from the Senate report was an in-depth consideration of why new cancer medicines cost so much and what can be done about it.

“Many new cancer drugs cost more than $100 000 per treatment and it has been shown that in the United States the launch price of cancer drugs has increased by 10% per annum over almost 20 years,” the authors wrote.

“These prices mean that unsubsidised medicines are well out of the reach of all but the wealthiest individuals, and they place intense political pressure on governments to subsidise medicines that would otherwise have been considered too expensive or supported by insufficient evidence.”

The pressure on governments is likely to get worse, they said, with a recent IMS Institute for Healthcare Informatics report predicting 225 new medicines to enter the market over the next 5 years, with cancer drugs being the highest proportion of those medicines.

“Pressure on budgets will therefore only increase if something is not done now about cancer drug prices,” the authors wrote.

The authors argued that there will need to be dramatic changes to how we procure medicines, but “perhaps all Australia can do for now is wait for global drug pricing trends to adjust”.

One change that could happen immediately is to advocate for greater transparency around price negotiations with drug companies and with health technology assessment.

“Without greater openness about how funding decisions are made, and how medicine prices are linked to underlying research and development, manufacturing and operational costs, we will remain unable to optimise the utilisation of our health resources in a way that works for both society and the pharmaceutical industry.”