Why the Cost of Cancer Treatment Is so High

These days many people will get cancer simply by living long enough, as the disease manifests in a third of the population in one of its many forms. As of 2014, cancer drugs with the FDA's blessing cost more than $120,000 annually – and according to a recent CBS News report, that cost increased 11.5 percent last year. Taking into consideration that the median gross income for American households is $52,000, along with the fact that insurance companies often ask families to pay upward to 30 percent of the total cost of cancer treatment, the bottom line is that cancer treatments are becoming much too costly for the average patient.

But why exactly are cancer treatments so costly in a first-world nation like the United States?

Cancer is a life-threatening disease that compels patients and caretakers to act immediately. Unlike diabetes, which can often be regulated for decades with proper diet and the correct medicines, cancer could kill a victim within a span ranging from months to years, all of which would be painful and possibility debilitating. So, like a TV pitchman imploring viewers to "act now," the imminent mortality of cancer prompts victims and their families to use the best medicine and procedures to cure the disease.

This situation also influences many patients and their families to avoid generic drugs. When using the example of managing diabetes, or even controlling cholesterol, patients trend towards using generic drugs or other more affordable options, even if the most available treatments offer better benefits. Simply put, the difference between money and improved health is negligible to the patients. In the case of cancer, however, there is a zero-sum choice between life and death with money no longer being a factor.

According to Mustaqeem Siddiqui and S. Vincent Rajkumar from the Mayo Clinic, terms such as “superior responses,” “improved progression-free survival,” and “longer overall survival,” are associated with newer drugs and treatments. Intentional or otherwise, these terms pit affordable options as being behind the times or ineffective in treating cancer. Civilians in the War on Cancer only see radiation, chemotherapy, and surgery as the treatments against the dreaded disease. Probably the most recognizable chemo side effects are nausea and vomiting. In 2005, Blue Cross and Blue Shield of Alabama required cancer patients to make a $1,000 co-pay on Phenergan®, an antiemetic (antinausea drug) commonly used in chemotherapy regimens.

Even if a patient decided to tolerate the vomiting to save thousands of dollars, some drugs can’t be avoided. Again, radiation and chemotherapy dictate a patient get treatment for treatment. When patients are administered methotrexate to manage the side effects of chemo treatment, another drug called leucovorin (a form of folinic acid) is later administered to protect gastrointestinal mucus and bone marrow from the indiscriminate effects of the methotrexate.

Leucovorin is one of four "rescue drugs" used to offset the effects of methotrexate, which is not alone in needing a rescue drug as chaperone. Mesna accompanies the chemotherapy Cytoxan® by rendering the chemotherapy's toxic properties inactive after hopefully treating cancer. In the case of radiation, a bone marrow transplant or stem cell transplant may be needed to help cleanse the patient from the amount of radiation received. All of these are costly measures patients may need just to survive their treatments.

Another factor in driving up the price of cancer treatments is insurance, including both insurance companies and government-sponsored plans.

Medicare Part D was revamped in 2006 with the promise of making cancer drugs more affordable for its beneficiaries. Though Medicare can negotiate up to 20 to 30 percent off of cancer drugs, the cost is nonetheless exorbitant when one considers that Medicare beneficiaries have an average household income of $22,000 per year.

Private insurers have also been put into unfavorable situations in having to deny patients the adequate care necessary to fairly fight cancer from a bottom-line perspective.

Cancer drugs are in many cases unique, with no other medicines being able to provide alternative options or therapies. Even in the case of chemotherapy, which has several options available, the type of chemotherapy drug used is often determined by the type of cancer, cell structure (histology), and other factors. This fact, combined with the life-threatening prospect of cancer, inspires patients to spare no expense, allowing drug companies to basically charge exorbitant amounts.

In the pharmaceutical companies' defense, the development of cancer drugs is not cheap. According to the National Institutes of Health (NIH), in 2008, drug companies spent $50 billion in research and development of new cancer drugs. Among the variety of drugs that may enter clinical trials, only 16 to 19 percent of these drugs ever see the light of approval. Even then, it takes on average 10 years for a drug to earn FDA approval and come to market — a whopping $1.2 billion dollars later.

It’s understandable that companies want to recoup these research and development costs; however, it’s just as unfortunate that they do so at the cost of people whose lives are on the line.

Federal regulations prevent American cancer patients from purchasing drugs across the border in Canada or overseas in Europe where they might be obtained for much cheaper. Being able to buy drugs from other countries could help to offset the costs of life-saving chemotherapy and rescue drugs.

While these sorts of regulations are understandable to a certain extent – con artists have been known to scam earnest individuals by selling them fake medications – there must be a way that the FDA and other regulatory agencies could allow the sale of less expensive drugs from reputable companies overseas.

Driving the costs of cancer treatment down would require a coalition of support from not only physicians and pharmaceutical companies, but also industry suppliers and device manufacturers. One such method that could be used to help lower costs is the “Quality-Adjusted Life-Year and Incremental Cost-effectiveness Ratio” proposed by Siddiqui and Rajkumar.

Without getting too technical, the ratio states that if a cancer drug promises a year's worth of quality health while on the medicine, patients should only pay for the amount of time they spend in actual good health. For example, if a drug promises 12 months of good health but the patient spent two months recovering from the side effects, the patient should only pay for 10 months’ worth of that drug's treatment.

There are other ways to drive costs down, as well. In recent years, we have seen a great surge in new treatment options, and emerging treatments such as immunotherapy could ultimately lead to lower costs. In the meantime, however, there are still millions of people with cancer who are at the ends of their financial ropes – and even beyond. Providing relief now for those individuals is critical, whether through further funding of research, regulatory action to lower treatment costs, or by receiving compensation from companies that knowingly use dangerous substances.

Experts fear the current model of cancer treatment is unsustainable due to rising costs. Healthcare providers, government regulation bodies, and advocacy organizations need to work together for the benefit of cancer patients, their families, and everyone involved.