High prices for some leukemia drugs will make them less cost-effective

Pills used to treat a form of leukemia may be more effective and convenient than chemotherapy, but a new study suggests pricing is projected to raise the annual cost of care by 590 percent – to more than $5 billion – over the next decade, straining payer budgets and causing financial hardship for patients.

Here’s why: The number of people in the US living with chronic lymphocytic leukemia, which is a rare blood and bone marrow disease, is forecast to reach 199,000 in 2025, up from 128,000 five years ago, thanks to more effective treatment. But a higher-priced pill, which is used as a first-line therapy and taken indefinitely, will also outpace the cost of chemotherapy, which has a fixed duration for treatment.

As a result, the annual cost of managing the disease is projected to rise to $5.1 billion by 2025, up from $740,000 million in 2011, based on current pricing. And the cost of treating each patient for a lifetime is expected to increase 310 percent, to $604,000 from $147,000 during that same period. And for Medicare patients, the out-of-pocket cost is forecast to jump 520 percent, to $57,000 from $9,200.

So while some studies have indicated improved survival rates for at least one of CLL pills, the high price tags threaten the effectiveness of these newer medicines, according to the study authors. Payers can be expected to respond to high prices by limiting coverage or, more likely, shifting more of the cost onto patients, but either approach can limit access and, therefore, undermine the benefits of the medicines.

“Oral targeted therapies will increase survival rates substantially. However, with the current price structure, they will dramatically increase the cost of CLL management for both patients and payers,” the researchers warn in their study, which was published on Monday in The Journal of Clinical Oncology.

“Such an economic impact could result in financial toxicity, limited access, and lower adherence to the oral therapies, which may undermine their clinical effectiveness. A more sustainable pricing strategy is needed,” for these medicines, the authors concluded.

The drugs examined were Imbruvica, which is sold by Johnson & Johnson and Zydelig, a Gilead Sciences pill, although this is not a first-line treatment. Nonetheless, the researchers noted that both drugs are costly and have similar list prices of approximately $130,000 for a year’s treatment. However, the researchers used models that assumed rebates and discounts that shaved 26 percent off that price point.

This is only the latest study to explore rising costs for pharmaceuticals, a hot-button issue that has stirred national concern. Poll after poll has found Americans are growing increasingly alarmed at the increasing cost of their medicines and want the federal government to take action, although whether the incoming Trump administration will do so remains to be seen.

Prices increased in recent years in different ways. Some companies have bought older medicines and quickly jacked up prices. And price tags for newer drugs for hard-to-treat diseases — notably, hepatitis C and some cancers — have been set at much higher levels than older treatments. In some categories, such as multiple sclerosis, competition has not lower prices. Some generics costs have also risen.

“It’s a disturbing concern,” said one of the study authors, Jagpreet Chhatwal, who is an assistant professor at Harvard Medical School and a senior scientist at the Institute for Technology Assessment at Massachusetts General Hospital. “And it’s happening now in CLL… Drug prices have to come down to make them more effective and more affordable.”

He suggested that CLL prices should be rolled back by at least 50 to 75 percent to make the medicines more cost effective. The researchers noted that, while the standard measurement of cost effectiveness is whether a medicine costs less than $100,000 for each additional year of life gained, the projected cost of CLL pills is $189,000.

The study authors acknowledged some limitations of their analysis. For instance, they wrote that their model “did not consider all possible treatment sequences in practice. We also did not account for individual practice patterns that deviate from standard of care and guidelines because no data exist,” showing comprehensive estimates for using each treatment.

We asked J&J and Gilead for comment and will update you accordingly. We should note that seven of the nine study authors have done research or consulting work drug makers that sell cancer treatments. However, Chhatwal said the pharmaceutical industry did not finance the study.