# Why does cancer medication cost so much? **URL:** \ **Category:** Factual Questions\ **Created:** [August 23, 2011, 12:20pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767 "2011-08-23T12:20:14Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![CheeseDonkey](https://avatars.discourse-cdn.com/v4/letter/c/ecae2f/32.png) [@CheeseDonkey](https://boards.straightdope.com/u/CheeseDonkey)\ **Post date:** [August 23, 2011, 12:20pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/1 "2011-08-23T12:20:14Z")
I mean, it can be tens of thousands of dollars. Why? ---
**Author:** ![Pitchmeister](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/pitchmeister/32/3459_2.png) [@Pitchmeister](https://boards.straightdope.com/u/Pitchmeister)\ **Post date:** [August 23, 2011, 12:21pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/2 "2011-08-23T12:21:44Z")
Years and years of really freaking expensive research. ---
**Author:** ![rbroome](https://avatars.discourse-cdn.com/v4/letter/r/838e76/32.png) [@rbroome](https://boards.straightdope.com/u/rbroome)\ **Post date:** [August 23, 2011, 12:35pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/3 "2011-08-23T12:35:51Z")
> [@Pitchmeister](#): > > Years and years of really freaking expensive research. research that often doesn’t result in a useful drug-but something still has to pay for that research. ---
**Author:** ![CheeseDonkey](https://avatars.discourse-cdn.com/v4/letter/c/ecae2f/32.png) [@CheeseDonkey](https://boards.straightdope.com/u/CheeseDonkey)\ **Post date:** [August 23, 2011, 12:37pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/4 "2011-08-23T12:37:45Z")
Does the medication cost a lot to produce once the research is all done? ---
**Author:** ![kanicbird](https://avatars.discourse-cdn.com/v4/letter/k/5f8ce5/32.png) [@kanicbird](https://boards.straightdope.com/u/kanicbird)\ **Post date:** [August 23, 2011, 12:51pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/5 "2011-08-23T12:51:23Z")
> [@Pitchmeister](#): > > Years and years of really freaking expensive research. I’d more go for because they really freaking can, look to how are their stock is doing. ---
**Author:** ![Busy\_Scissors](https://avatars.discourse-cdn.com/v4/letter/b/d78d45/32.png) [@Busy\_Scissors](https://boards.straightdope.com/u/Busy_Scissors)\ **Post date:** [August 23, 2011, 12:59pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/6 "2011-08-23T12:59:23Z")
> [@CheeseDonkey](#): > > Does the medication cost a lot to produce once the research is all done? For a small molecule, no. It’s just that getting to the first pill costs 1 billion dollars. The second one costs 50 cents. Biologicals are more expensive to produce, treatments like avastin, herceptin. ---
**Author:** ![GythaOgg](https://avatars.discourse-cdn.com/v4/letter/g/49beb7/32.png) [@GythaOgg](https://boards.straightdope.com/u/GythaOgg)\ **Post date:** [August 23, 2011, 2:58pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/7 "2011-08-23T14:58:26Z")
Some cancer drugs - the older ones - have gotten pretty cheap. Methotrexate, which is still used and is also used as a treatment for rheumatoid arthritis, is one. ---
**Author:** ![lazybratsche](https://avatars.discourse-cdn.com/v4/letter/l/ba8739/32.png) [@lazybratsche](https://boards.straightdope.com/u/lazybratsche)\ **Post date:** [August 23, 2011, 3:31pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/8 "2011-08-23T15:31:22Z")
> [@Pitchmeister](#): > > Years and years of really freaking expensive research. This. It costs about a billion dollars to develop a drug. That includes the cost of years of preclinical research, years of early clinical trials and drug development, and extremely expensive late-stage clinical trials. Plus, it include the cost of all the drugs that failed along the way. Once the drug company gets approval from the FDA, they only have a few years (10 if they’re lucky) to sell the drug under patent, and make back their billion dollar investment. So let’s say there’s a new drug that could benefit 10,000 patients each year year. Say it’s under patent for 10 years. The drug company has to charge each patient $100,000 just to pay for the drug’s development, _without making any profit at all_. But once it’s off patent, generic manufacturers can sell the drug, and they don’t have much in the way of sunk R&D. So they can sell the drug for much closer to the manufacturing cost – say, $5,000 for a course of treatment. Not much of the “extra” $95,000 charged by the first drug maker is profit. ---
**Author:** ![lazybratsche](https://avatars.discourse-cdn.com/v4/letter/l/ba8739/32.png) [@lazybratsche](https://boards.straightdope.com/u/lazybratsche)\ **Post date:** [August 23, 2011, 3:36pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/9 "2011-08-23T15:36:03Z")
> [@kanicbird](#): > > I’d more go for because they really freaking can, look to how are their stock is doing. Yeah, except that pharmaceutical stocks are hardly doing well. Big pharmaceuticals have been struggling, and their profits aren’t much more than any other big industry. I think any company is lucky to get a 10% return on their humongous investment. ---
**Author:** ![Ambivalid](https://avatars.discourse-cdn.com/v4/letter/a/a5b964/32.png) [@Ambivalid](https://boards.straightdope.com/u/Ambivalid)\ **Post date:** [August 23, 2011, 5:41pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/10 "2011-08-23T17:41:39Z")
> [@lazybratsche](#): > > This. It costs about a billion dollars to develop a drug. That includes the cost of years of preclinical research, years of early clinical trials and drug development, and extremely expensive late-stage clinical trials. Plus, it include the cost of all the drugs that failed along the way. Once the drug company gets approval from the FDA, they only have a few years (10 if they’re lucky) to sell the drug under patent, and make back their billion dollar investment. > > So let’s say there’s a new drug that could benefit 10,000 patients each year year. Say it’s under patent for 10 years. The drug company has to charge each patient $100,000 just to pay for the drug’s development, _without making any profit at all_. > > But once it’s off patent, generic manufacturers can sell the drug, and they don’t have much in the way of sunk R&D. So they can sell the drug for much closer to the manufacturing cost – say, $5,000 for a course of treatment. Not much of the “extra” $95,000 charged by the first drug maker is profit. Cite? ---
**Author:** ![lazybratsche](https://avatars.discourse-cdn.com/v4/letter/l/ba8739/32.png) [@lazybratsche](https://boards.straightdope.com/u/lazybratsche)\ **Post date:** [August 23, 2011, 5:59pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/11 "2011-08-23T17:59:42Z")
> [@jamiemcgarry](#): > > Cite? For the cost of drug development? There are various figures, depending on who’s looking at which companies and how they do the accounting. [This oft-quoted study](http://www.sciencedirect.com/science/article/pii/S0167629602001261) puts the figure at $800 million, [this one](http://onlinelibrary.wiley.com/doi/10.1002/hec.1454/abstract) around $1 billion, [this one](http://content.healthaffairs.org/content/25/2/420) estimates a range from $500 million to $2 billion. Again, those figures include the vast number of failed drug candidates. For a particular drug, development costs are much less – maybe a few million for early basic research, ten million for drug development, another few tens of millions for early clinical trials, and a hundred million for large phase 3 clinical trials. At each step, [del]about 90%[/del] the majority of drug candidates fail completely, so there is a tremendous amount of failed research that has to be paid for with a few successes. ---
**Author:** ![Machine\_Elf](https://avatars.discourse-cdn.com/v4/letter/m/82dd89/32.png) [@Machine\_Elf](https://boards.straightdope.com/u/Machine_Elf)\ **Post date:** [August 23, 2011, 6:17pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/12 "2011-08-23T18:17:55Z")
> [@jamiemcgarry](#): > > Cite? Pfizer lost $800M when they cancelled [Torcetrapib.](http://en.wikipedia.org/wiki/Torcetrapib#Early_termination_of_study) Apparently [that’s about average.](http://en.wikipedia.org/wiki/Drug_development#Cost) ---
**Author:** ![naita](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/naita/32/5862_2.png) [@naita](https://boards.straightdope.com/u/naita)\ **Post date:** [August 23, 2011, 6:22pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/13 "2011-08-23T18:22:48Z")
And cancer meds is one area where you want the very latest poisons. The improvements have been tremendous for years and you don’t want to cut costs as you’ll also cut years. ---
**Author:** ![gonzomax](https://avatars.discourse-cdn.com/v4/letter/g/e8c25b/32.png) [@gonzomax](https://boards.straightdope.com/u/gonzomax)\ **Post date:** [August 23, 2011, 6:23pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/14 "2011-08-23T18:23:18Z")
> **[News](https://www.urmc.rochester.edu/news/story/index.cfm?id=3280)** One of thousands of universities that work in drug research. No, the drug companies are not responsible for the vast majority of drugs created. One reason they cost so much, is that desperate and scared people will pay whatever it takes. ---
**Author:** ![lazybratsche](https://avatars.discourse-cdn.com/v4/letter/l/ba8739/32.png) [@lazybratsche](https://boards.straightdope.com/u/lazybratsche)\ **Post date:** [August 23, 2011, 6:45pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/15 "2011-08-23T18:45:45Z")
> [@gonzomax](#): > > [News | URMC Newsroom](http://www.urmc.rochester.edu/news/story/index.cfm?id=3280) > One of thousands of universities that work in drug research. No, the drug companies are not responsible for the vast majority of drugs created. > One reason they cost so much, is that desperate and scared people will pay whatever it takes. Universities do not develop drugs all the way to FDA approval. They do the basic research, and in a few cases (like the collaboration you cited) collaborate with industry during the early development of candidate drugs. Pharmaceutical companies do the vast majority of development for new drugs, particularly the human clinical trials. You can see the [FDA approvals of new drugs here](http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/DrugandBiologicApprovalReports/ucm121136.htm) – I certainly don’t see any approvals awarded to academic groups. ---
**Author:** ![Ferret\_Herder](https://avatars.discourse-cdn.com/v4/letter/f/e47774/32.png) [@Ferret\_Herder](https://boards.straightdope.com/u/Ferret_Herder)\ **Post date:** [August 23, 2011, 6:49pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/16 "2011-08-23T18:49:59Z")
> [@gonzomax](#): > > [News | URMC Newsroom](http://www.urmc.rochester.edu/news/story/index.cfm?id=3280) > One of thousands of universities that work in drug research. No, the drug companies are not responsible for the vast majority of drugs created. > One reason they cost so much, is that desperate and scared people will pay whatever it takes. I’d like to see some cites for that. As a member of the human subjects research Institutional Review Board at the medical center I work at - off the top of my head I’ll say the easy majority of drug studies are industry (Pharma company) sponsored. A much smaller percentage are government (NIH, DoD, etc.) sponsored, and the remainder are smaller grants/funded by the institution. I applaud any efforts at getting more research funded from whatever resource, but when it comes to phase III (looking for FDA approval) testing, it’s pretty much all from pharma companies. Government-funded testing seems to usually be post-approval comparisons, but not always. Edit: Damn, ninja’d by **lazybratsche**! ---
**Author:** ![mack](https://avatars.discourse-cdn.com/v4/letter/m/b19c9b/32.png) [@mack](https://boards.straightdope.com/u/mack)\ **Post date:** [August 23, 2011, 7:26pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/17 "2011-08-23T19:26:43Z")
Besides the cost of the drug itself there can be other expenses depending on how the drug is delivered. If it’s IV you need someone to start the IV, inject the drug, monitor the patient, maybe the patient gets pre-medicated with antiemetics or whatever. Maybe a growth factor to boost the patient’s immune system if the chemo is toxic to white blood cells, and so on. It all adds up. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [August 23, 2011, 7:35pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/18 "2011-08-23T19:35:40Z")
In a free market the price of a good is what the market will bear, no? I don’t see how the cost of developing the drug comes into the final price at all, other than that obviously no drugs would be developed unless the makers could be reasonably confident that the price they can sell it at will recoup the R&D costs. Cancer drugs cost a lot because the consumer is desperate to buy them, and highly insensitive to price (both because they don’t want to die and because it’s likely their insurance is paying a good chunk of the cost). There is also little competition on the supply side, because drugs are patented. The cost of development is a barrier to entry - which does tend to drive up prices because it makes it unlikely for a new market entrant to drive prices down. ---
**Author:** ![Uber\_the\_Goober](https://avatars.discourse-cdn.com/v4/letter/u/58956e/32.png) [@Uber\_the\_Goober](https://boards.straightdope.com/u/Uber_the_Goober)\ **Post date:** [August 23, 2011, 10:13pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/19 "2011-08-23T22:13:03Z")
> [@kanicbird](#): > > I’d more go for because they really freaking can, look to how are their stock is doing. Wait, wait. This is the post you ended up with AFTER you edited it? Is English your second or third language? Anyway, to the OP, its expensive because fhe system is expensive. Doctors doing research want big paychecks, shareholders want big returns on their drug company stocks, on and on. I’m not saying that any of those things are wrong, but thats how it is. ---
**Author:** ![code\_grey](https://avatars.discourse-cdn.com/v4/letter/c/f4b2a3/32.png) [@code\_grey](https://boards.straightdope.com/u/code_grey)\ **Post date:** [August 23, 2011, 10:26pm UTC](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767/20 "2011-08-23T22:26:48Z")
so would the right answer be “because FDA established drug confirmation process is too expensive for our own good in this particular case”? I think that this is all the funnier in cases of cancers that kill majority of patients in 3-5 years regardless of which drugs they use. When the difference between “safe”, “unsafe”, “effective” and “ineffective” boils down to plus-minus 12 months of life, a horde of expensive government regulators does not look like a good investment in human progress. [Next page](https://boards.straightdope.com/t/why-does-cancer-medication-cost-so-much/593767.md?page=2)