Automatic price cuts when a cancer drug's approved indications and volumes expand
When a cancer drug is approved for more uses, the company sells far more of it but the price stays the same. Japan cuts prices automatically when sales balloon; others should too.
Japan's market expansion repricing rule lowers the reimbursement price when a drug's sales exceed forecasts by a defined margin, and was applied to nivolumab, whose price was cut by half in 2017 after expansion beyond melanoma. Most other systems renegotiate slowly or not at all as indications multiply. The proposal is a rule-based repricing schedule in other public systems: price falls by a published formula when cumulative approved indications or annual volume cross thresholds, reflecting the lower per-unit development cost and the fact that later indications rely on the same molecule.
- Prices and value · New cancer drugs routinely cost over $150,000 a year, often for months of benefit. Systems cannot afford them and patients go bankrupt.