Part D Cancer Drug Launch Prices Soar Past Inflation

TOPLINE:

Launch prices for Medicare Part D anticancer drugs have risen sharply since 2012, with a mean increase of $1694 per year. In 2025, the observed prices were 15%-200% higher than expected if the increases were due to inflation alone, but the gap between observed and inflation-adjusted prices narrowed over the study period.

METHODOLOGY:

• The Inflation Reduction Act of 2022 introduced price negotiation for Medicare-covered drugs and required manufacturers to pay rebates to Medicare for price increases above inflation. But it did not address the launch prices of new drugs.
• Anticancer drugs, a protected drug class with mandatory Medicare Part D coverage, may now be especially prone to higher launch prices, in part because the Inflation Reduction Act limits out-of-pocket spending and price increases after market entry.
• Researchers identified 86 branded, self-administered, molecularly targeted anticancer therapies approved by the FDA between January 2010 and December 2024. Data on drug prices were obtained from the Medicare Prescription Drug Plan Formulary and adjusted for inflation.
• The researchers looked at launch prices by year and compared drug prices in 2025 with those expected if launch prices had increased due to inflation alone since the drug’s market entry.

TAKEAWAY:

• The mean monthly launch price increased from $10,954 for drugs first observed in the Medicare formulary in 2012-2014 to $27,891 for drugs first observed in 2023-2025.
• After adjusting for inflation, the mean launch price increased by $1694 per year (P < .001).
• In 2025, actual drug prices were 14.8%-200.9% higher than expected if they had only kept pace with inflation.
• Although the gap between observed and inflation-adjusted prices narrowed over time, price increases continued to outpace inflation in 2023 and 2024, despite the Inflation Reduction Act rebate requirement, which will result in rebates to Medicare starting in fall 2025.

IN PRACTICE:

“Launch prices for self-administered targeted anticancer therapies have grown precipitously, although no evidence was found of disproportionate increases in recent years. Instead, continued launch price growth for anticancer therapies was observed, consistent with prior research,” the study authors wrote. “This suggests that companies were already engaging in price maximization for anticancer therapies and continued to do so after the implementation of the [Inflation Reduction Act].”

SOURCE:

This study, led by Stacie B. Dusetzina, PhD, Vanderbilt University School of Medicine in Nashville, Tennessee, was published online in JAMA.

LIMITATIONS:

This study used example indications to determine monthly doses and pricing. Additionally, variations in available price measures were noted over the study period.

DISCLOSURES:

This study was funded by Arnold Ventures. Several authors reported receiving grants or personal fees and having other ties with various sources.

This article was created using several editorial tools, including AI, as part of the process. Human editors reviewed this content before publication.