Dr Scott Ramsey Addresses the Need for Differential Pricing Structures for Drugs

Differential pricing structures are necessary for products with surrogate endpoints and to account for revolutionizing treatments in order to have a more sustainable value equation, according to Scott Ramsey, MD, PhD, of Fred Hutchinson Cancer Research Center.

Transcript (slightly modified)

The current trend in oncology in accelerated approvals in early phase results that use surrogate endpoints instead of overall survival. Do you see this as a sustainable model in the face of rising drug prices?

That model of using surrogate endpoints has been around for many years. What we’re seeing, instead of more use of surrogate endpoints, is more products coming out with surrogate endpoints. It is quite problematic in terms of the health spend trend, in oncology specifically, and it may need to be resolved by addressing limited evidence with differential pricing. In other words, when we have only intermediate endpoints we may have to have a different pricing structure than when we have overall survival as an endpoint.

Recent immuno-oncology agents have revolutionized cancer care. How can our health system sustain the cost of using these agents?

There are going to have to be different pricing structures. I would argue a little bit that they haven’t quite revolutionized cancer care. I think that they are an important step and in some diseases they have had substantial benefits but in others the benefits are much more modest and I think we need to account for that differential benefit with differential pricing, again bringing it back to a more sustainable value equation.