Price Gouging Among Shortages ‘Significantly Affects’ Drug Supply

Lucio N. Gordan, MD

Florida Cancer Specialists & Research Institute

Shortages of cisplatin and carboplatin have been felt across various institutions and communities as clinicians have to switch or adjust treatment to conserve the supply. Increases in pricing of almost 1700% from baseline have been observed, according to Lucio N. Gordan, MD.

Gordan, president and managing physician at Florida Cancer Specialists & Research Institute, went on to discuss how small institutions may have trouble acquiring the drugs because of price gouging and patients will not be able to receive the treatment. He also discussed how certain organizations are trying to enact legislation to prevent a shortage like this from happening again.

“If there are ways that a drug can be replaced, we try to do drug replacement for another potential best second drug, but it’s frequently a problem. There are just not enough studies to allow us to replace carboplatin/cisplatin with another class of drugs with the same level of comfort from a scientific standpoint,” said Gordan.

CancerNetwork^®: How has price gouging, because of the chemotherapy shortages, affected institutions across the United States?

Gordan: Price gouging does not happen with a major group of purchase organizations or distributors in the country, like AmerisourceBergen, or Cardinal [Health]. There’s not a level of concern there. However, there are smaller buyers that would acquire these drugs…and then release them when there is a [shortage]. We have seen a price [increase] up to 1700% from baseline. A drug that costs $30 per unit is going up to almost $400. This affects the shortage significantly.

How has your institution responded to this situation?

We have allowed the purchase of some amount of drugs even at a higher price because we thought it was important to keep the patients on treatment with these lifesaving [agents]. They’re the backbone of several chemotherapy regimens, and many of these patients are receiving these treatments to improve cure rates. Essentially, the practice absorbs the cost, and we did invest the cost [in] the patient. We can do this for a while, but if the price increases or gouging is allowed to go unchecked—if a drug costs $1000 or $10,000, if you have price gouging of 200%, 300%, 1000%, or more—then it’s impossible to stay in business and to get the drug to the patients.

The problem is that with some of these drugs that are in shortage—specifically, the platinum agents carboplatin and cisplatin—it is a financial problem because the price of these drugs got so low that it is not feasible for a manufacturer to produce these drugs. Most of us would be reasonable and…pay a slightly higher price than the current [price] to allow improved supplies.

Looking on a national scale, what should institutions be doing to compensate for these price increases?

It’s very important that the large practices and institutions in the country stay united. The Community Oncology Alliance, the American Society of Clinical Oncology, and others are trying to push legislation that would protect the consumer, the patients, and us to make sure that we have a proven supply. We have to make efforts to bring manufacturing back to the United States so we can make sure the quality is top-notch. If it stays overseas, there are ways to monitor quality as well. We need to make sure that we have a sustainable approach.

We need to stick together and try to work with the federal government and state governments to make sure that they understand the magnitude of the problem.

What do you hope to see changed to avoid shortages and price gouging from happening again?

From a shortage standpoint, we need to make sure that we understand the mechanisms that bring the prices of the drugs down. It’s important that Congress understands that. From a brand-drug standpoint, we understand there’s enormous pressure on pharmaceutical companies to keep the prices under control; [it is] certainly a reasonable ask to help patients and consumers afford them. However, for generic drugs and other classes of drugs like biosimilars, there is a very profound erosion of pricing because these drugs are commoditized. The financial value goes down over time, quarter over quarter. Eventually, it gets to the point that it’s not worth it for a manufacturer to produce such drugs to bring to us. The number 1 [priority] is to fix that.

Without the financials working, there’s no way we can force anybody to produce more drugs at a loss. How can we fix this? One is to stabilize and get to the bottom of pricing for specific drugs. Of course, there has to be a multitasking force that understands the problem and makes sure we find a fair number. The other way of doing this is [implementing] potential tax benefits for manufacturers that produce generics or some form of subsidizing the production of such drugs.

That’s the most important part because, in my opinion, it’s mostly a financial problem. We live in a very capitalist world, and it boils down to having a good end point for the manufacturer to [be willing to] bring the drug to the patients.