Research & Education

Conversation with Dr. Gilberto Lopez in Conjunction with 2016 Asia Pacific Lung Cancer Conference (APLCC)

May 13, 2016

APLCC 2016
 
Contact: Jeff Wolf                                                                                                 Becky Bunn, MSc                                          
IASLC Director of Communications                                                                  IASLC Project Specialist                    
Jeff.Wolf@IASLC.org | 720-325-2952                                                             Becky.Bunn@IASLC.org | 720-325-2946       

 

Conversation with Dr. Gilberto Lopez in Conjunction with 2016 Asia Pacific Lung Cancer Conference (APLCC)
The Rising Cost of Cancer Treatment

Decreasing Prices of Cancer Drugs Increases Accessibility
One of the most pressing problems in oncology today is the rising costs of cancer treatment. Cancer medication costs in the U.S. have doubled during the last decade: from $5,000 a month to about $10,000-$12,000 per month.

One of the reasons for this could be the high costs and time period involved in developing new drugs. “It can take more than 15 years and over $2.8 billion to develop a new drug,” said Dr. Gilberto Lopez, a medical oncologist in Brazil and Chief Medical Officer for the Oncoclinicas Group – the largest oncologists’ group in Latin America with more than 300 physician members. Dr. Lopez is also the Associate Editor of the Journal of Global Oncology.

In most markets, interdependence between demand and supply and free market forces sets prices of a product/service. The healthcare market, however, is not an independently working market. There is concentration of power either in the national buyers or in the pharmaceutical industry, which has a monopoly over its patented drugs.

How Can We Improve Access?
Dr. Lopez shared different strategies that low and middle income countries can take to improve access to cancer medication:

1) Price control for cancer medicines can be imposed by governments. But price controls usually do not work, according to Dr. Lopez.

“We have many examples where price controls have led to the disappearance of the product from the market, leaving the customers with no option but to buy the product in the black market where prices are even higher than what they were initially supposed to be. So, negotiations with the pharmaceutical industry and the use of reference pricing could perhaps be of more help,” he said.

A compulsory license is an authorization granted by the government of a country allowing someone else to produce (under strict terms) a generic version of the patented product without the consent of the patent owner. For compulsory licensing, the generic copy is produced mainly for the domestic market, and not for export. It is one of the flexibilities on patent protection included in the WTO’s agreement on intellectual property: The TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement.

A biosimilar is a biologic medical product which is almost an identical copy of an original product that is manufactured by a different company. Biosimilars are officially approved versions of original "innovator" products, and can be manufactured when the original product's patent expires. Due to the size and complexity of biologic agents, as well as the fact that they are produced in living organisms, it is impossible to replicate them exactly. In this respect, biosimilars differ from chemically synthesized generics of small-molecule drugs.

2) Compulsory licensing (CL) is an effective strategy used by governments to drastically reduce drug prices. During the HIV/AIDS crisis in the 1990s, it was only through use of compulsory licensing provisions by countries like Brazil, India, and South Africa that led the industry to lower prices for ARV drugs in low and lower-middle income countries, added Dr. Lopez.

Although CL has not been used often for cancer, Dr. Lopez shared the few existing examples where this intervention has worked.

“Thailand has used CL for a number of drugs, including taxol – an anti-cancer chemotherapy drug. This has resulted in huge savings for the government and made it easier for the Thai people to access cancer medication. Thailand, however, did face some economic losses when the U.S. government retaliated by deleting some of the Thai products from their exports list. But, CL resulted in overall savings for Thailand’s economy. More recently in 2012, India imposed compulsory licensing for the anticancer drug Sorafenib tosylate, sold under the brand name Nexavar. This resulted in reducing the cost to Indian cancer patients for the price of $175 USD per month – a 97 percent price reduction.”

Dr. Lopez warned that new free trade agreements (FTAs) have been including clauses that do not allow the signatory countries to use CL. This is a disturbing development that will deprive many countries from using CL to rein in prices.

3) Price discrimination or market-based differential pricing is a relatively new concept in healthcare. Price discrimination is the concept of charging different prices for the same product/service from different consumers, based on consumers’ ability to pay.

“Price discrimination in the form of discounts and rebates is commonplace in industries outside of healthcare, as it allows companies to expand their customer base. It is something like movie theatres selling cheaper tickets for the same movie on a Wednesday than on a Saturday evening,” Dr. Lopez explained.

According to Dr. Lopez, price discrimination should work for pharmaceutical companies as their major expenses lie in drug development and not in the marginal cost of producing one extra tablet.

“We can easily have high prices in high income regions to recover the drug development costs, and very low prices in small and middle income countries. Thus, differential pricing can help expand the use of new and expensive medications in low and middle income countries, while improving a company’s bottom line,” Dr. Lopez said.

There are companies today that have a pricing policy of charging lower rates to lower income countries. There are many instances of price discrimination working to an advantage. Dr. Lopez gave the example of Brazil, where several companies recently decreased the cost of Hepatitis-C medication by more than 80 percent, making it accessible to all those with Hepatitis-C infections. There are some examples of price discrimination for cancer medicines as well.

Dr. Lopez listed the problems that beset price discrimination strategy:

  • Companies may worry that someone might buy the medications in a cheaper jurisdiction and then resource (export) them back to more expensive jurisdictions. But there can be international control mechanisms to prevent this.
  • There could be political backlash: Citizens of rich countries might resent paying higher prices in order to subsidize costs in developing countries. But people will have to realize that access to medicines is a matter of human rights, and not just a matter of trade.
  • Some medications are so expensive that even after massive price decreases of 80 percent they still might not be affordable in some low income countries.

4) Generic medicines are another very valuable way to make medications affordable, and increase overall access once a patent expires.

“Generics are used all over the world, including the U.S., where several prescriptive medicines come from generics and only cost 15 percent of all drug costs in the U.S.,” Dr. Lopez said.

5) Biosimilars are now being developed in the field of oncology for the more expensive monoclonal antibodies such as Rituximab and Cetuximab.

“It is expected that biosimilars will be able to decrease medication costs by 30-40 percent. We are now seeing companies that hope to make them for prices as low as $3 a day. We hope that in 5-10 years this would prove to be a boon for access to monoclonal antibodies in low and lower-middle income countries.”

Undoubtedly, there is an urgent need to find and adopt means to regulate the prices of the expensive cancer drugs.

 

For more information on IASLC Asia Pacific Lung Cancer Conference, please visit:

Website: www.aplcc2016.com | Twitter: @APLCC2016 | Facebook.com/APLCC2016

 

About the IASLC
The International Association for the Study of Lung Cancer (IASLC) is the only global organization dedicated solely to the study of lung cancer. Founded in 1974, the association's membership includes more than 5,000 lung cancer specialists in over 100 countries. Visit www.iaslc.org for more information.

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(This article was written jointly by Shobha Shukla and Bobby Ramakant of CNS (Citizen News Service) and edited by IASLC. CNS is a media partner of APLCC 2016. Follow CNS on www.citizen-news.org Twitter: @CNS_Health, Facebook.com/CNS.page and YouTube.com/c/CitizenNewsOrgCNS)