Waste of the Day: Taxpayer-Funded Cancer Drug Costs Almost $200,000

Topline: Taxpayers spent $74.5 million to help develop the prostate cancer-fighting drug Xtandi, but its sky-high sticker price is limiting access to patients and siphoning money away from Medicaid, according to experts interviewed by Oncology News Central.

Tale of the super-expensive cancer drug

Key facts: The University of California, Los Angeles helped develop Xtandi in 2012 using government grants from the National Institutes of Health and Department of Defense.

The early research funded by taxpayers was the riskiest investment phase, since no one was certain if the drug would work, Dr. Bishal Gyawali of Queen’s University told Oncology News Central.

Once the risk was over, large pharmaceutical companies began investing in Xtandi. The drug’s list price has since reached $189,900 annually. The companies are making an average profit of $14.50 for every $1 they invested in Xtandi and other drugs, according to a World Health Organization study cited by Gyawali.

Medicaid is often forced to pay the high sticker price to help patients get the life-saving medicine. 

There are also patients with incomes too high for Medicaid coverage who still cannot afford Xtandi. One cancer patient made a social media post stating that he was forced to forgo Xtandi treatment because it would cost him $2,300 per month after insurance.

The problem is seemingly unique to America. Xtandi costs $25,000 in Japan, $31,000 in Australia and $32,000 in Canada. The U.S. cost is also three to five times higher than in the United Kingdom, France, Italy, Germany and Spain, Oncology News Central reported.

A pharmaceutical spokesperson told Oncology News Central that 87% of Xtandi patients pay $50 or less, but the news outlet cited a study showing that the median annual cost for Medicare patients is actually $11,626.

NIH didn’t use its march-in authority

Search all federal, state and local government salaries and vendor spending with the AI search bot, Benjamin, at OpenTheBooks.com. 

Background: In 2016, the Union for Affordable Cancer Treatment sent a petition to the National Institutes of Health asking the agency to help lower the price of Xtandi. 

The federal government’s “march-in” authority, which has never been used, allows it to let other companies develop a drug if the patent holder does not make the medicine reasonably available to the public. The law only applies to drugs developed with taxpayer funds. 

The NIH made a final decision in 2023, opting not to exercise its power.

Summary: Government-funded research should be utilized to help as many people as possible, giving the taxpayers who paid for the research the best return on investment.

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This article was originally published by RCI and made available via RealClearWire.