The World Health Organization says that cancer drug prices have little or no connection to the cost of developing and manufacturing the treatments. "The costs of R&D and production may bear little or no relationship to how pharmaceutical companies set prices of cancer medicines,” a recent WHO analysis concluded.
Pharmaceutical companies set prices for cancer drugs with profits in first and foremost mind, WHO said, focusing on the maximum a buyer will pay. The strategy is quite effective in financial terms, with the top five cancer drugs recording more than $60 billion in lifetime sales by the end of 2017, but “often makes cancer medicines unaffordable, preventing the full benefit of the medicines from being realized,” the report said.
Caitlin Owens and Bob Herman of Axios say that the paper “sharply contradicts the industry’s argument that those prices are necessary to recoup the cost of developing new drugs — including the money they spend on products that fail.”
Not surprisingly, big pharma doesn't agree. A spokesperson for the Pharmaceutical Research and Manufacturers of America said, “The report’s narrow scope fails to properly account for the value that cancer medicines provide to patients, health care systems and societies.”