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Potential Cost Implications for All US Food and Drug Administration Oncology Drug Approvals in 2018
Patrick C DeMartino1, Miloš D Miljkovic2, Vinay Prasad3
1Division of Pediatric Hematology and Oncology, Oregon Health & Science University, Portland.
Importance:
The growth of cancer drug spending in the US has outpaced spending in nearly all other sectors, and an increasing proportion of the drug development pipeline is devoted to oncology. In 2018, there was a record number of drugs entering the US market.
Objective:
To estimate the number of patients with cancer who are eligible for the newly approved drug-indication pairs, and project potential spending and use of the approvals in the US.
Design, Setting, Participants:
This is a retrospective review of 2018 US Food and Drug Administration (FDA) oncology drug approvals with estimation of the eligible population. The cost of new therapy was estimated, and savings from displaced therapies were subtracted. Two-way sensitivity analysis explored uncertainty in pricing and market diffusion. Data were collected between March 1, 2019, and September 30, 2019.
Exposures:
Data related to the cancer drug approval (ie, indications, approval pathway, basis for approval), cancer incidence, and drug price were extracted from publicly available sources, including the FDA, National Cancer Institute, and American Cancer Society websites, as well as the RED BOOK database.
Main Outcomes And Measures:
The primary outcome was the projected net expenditure in the US associated with the new therapies. The secondary outcome described how variable market diffusion and pricing permit expected levels of spending.
Results:
A total of 46 oncology approvals were included in the analysis, with 17 novel drugs and 29 new indications. The average price per patient per treatment course was $150 384. From a national perspective and with 100% market diffusion, the projected net expenditure for newly approved drugs was $39.5 billion per year. To maintain the recent trend of cancer drug spending, the 2018 cancer drug approvals need to be used in fewer than 20% of eligible patients.
Conclusions And Relevance:
New cancer drugs approved by the FDA in 2018 would drastically increase cancer drug spending in the US if used widely. Alternatively, only low-level use of the new drugs is consistent with market forecasting.
Insights
New cancer drug approvals in 2018 could significantly increase US spending. To maintain current trends, fewer than 20% of eligible patients should use these new oncology drugs.
Area of Science:
- Oncology
- Health Economics
- Pharmaceutical Policy
Background:
- US cancer drug spending is rapidly increasing, with a growing focus on oncology drug development.
- 2018 saw a record number of new drugs entering the US market, particularly in oncology.
Purpose of the Study:
- To estimate the eligible patient population for newly approved cancer drugs in 2018.
- To project potential healthcare spending and utilization of these new oncology drug approvals in the US.
Main Methods:
- Retrospective review of 2018 US Food and Drug Administration (FDA) oncology drug approvals.
- Estimation of eligible patient populations, new therapy costs, and savings from displaced therapies.
- Sensitivity analysis for pricing and market diffusion uncertainty.
Main Results:
- Analysis included 46 oncology approvals (17 novel drugs, 29 new indications).
- Average cost per patient per treatment course was $150,384.
- Projected net expenditure reached $39.5 billion annually with 100% market diffusion.
Conclusions:
- Widespread use of 2018 FDA-approved cancer drugs would drastically increase US healthcare expenditure.
- Low-level utilization of these new drugs aligns with current market spending forecasts.
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