Pricing in the Market for Anticancer Drugs
What are unique features of the market for anticancer drugs?
Originally published on 12/01/2015 in Journal of Economic Perspectives
In 2011, Bristol-Myers Squibb launched its newly approved melanoma drug ipilimumab, brand name Yervoy, at $120,000 for a course of therapy. The drug provided an incremental increase in life expectancy of four months.
Drugs like ipilimumab have contributed to the perception that the launch prices of new anticancer drugs and other drugs in the "specialty" pharmaceutical market have been increasing over time, and that these increases are not tied to the magnitude of their incremental benefits. In this paper, we discuss the unique features of the market for anticancer drugs and assess trends in the launch prices for 58 anticancer drugs approved between 1995 and 2013 in the United States.
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