The World Health Organization’s recently published report, “Pricing of Cancer Medicines and its Impacts,” has elevated the issue to the agenda of the WHO’s executive board and is likely to ignite a lot of debate and some potential actions. While the report raises some very legitimate concerns related to access to anti-cancer drugs for patients, it also falls short of understanding the pharmaceutical industry environment. Rather than simply blaming the industry, it would be more productive to understand what’s standing in the way of collaboration to address patient needs and then jointly try to develop realistic programs to resolve it.


The report intends to analyze pharmaceutical industry pricing approaches for cancer drugs and its impact on patient access. Here are the main points:

  • The public health challenge: Cancer continues to be one of the greatest global public health challenges. Some cancers have seen great improvements in survival rates, but the impact of these treatments has been substantially less in low- and middle-income countries
  • Patient access: Access to patented and off-patent anti-cancer drugs has been very limited in low- and middle-income countries due to lack of insurance and patient affordability of the treatment or co-payment. In some countries, cost containment measures have led to reduced, delayed and cancelled treatments.
  • Drug cost and R&D: The report states that an analysis of 99 blockbuster drugs and other cancer drugs shows no relationship between R&D cost and price. It also disputes that lower cancer prices would impair future R&D.
  • Push for more controls: Price regulations and enhanced competition for clinically substitutable products may contribute to lower drug costs but have not resulted in containing the rise in cost. The report suggests that more measures may resolve that. It argues for price transparency to improve governance and limit risk of corruption.
  • R&D focus: The report is suggesting that some cancer types are over-invested (hematological, breast cancer), while others (liver, thyroid, lung, esophagus, stomach, bladder, pancreas) are underfunded, but it also argues that society may have a higher preference for focusing on young mothers and children.

The report has a three-page list of proposed actions, the majority of which are aimed at governments and payers at a national level. Proposed actions for the pharmaceutical industry are mainly focused on providing price and cost information.

Affordability of healthcare, including drugs, is indeed a big issue that we all must be concerned about. Most higher-income countries have public or private health insurance programs that help address the needs, although high co-payments can still cause financial hardship. Many low- and middle-income countries don’t have universal healthcare coverage. As a result, medical expenses, including drugs, are paid out-of-pocket by the patient. This is true for any advanced medical treatment, whether it’s availability of the best quality diagnostics, imaging equipment or specialty drugs.


It’s a natural reaction to look at price in cases where affordability is an issue. Particularly given the complexities of the pharmaceutical development process, it’s tempting to simply look at the profits of companies that have been successful with a blockbuster drug. However, that view ignores the many drug development failures and related investments. After winning the $30 million jackpot in a lottery, one can conclude that the $2 investment in a ticket was a great investment, an excessive profit. All the non-winners (including me) may not feel the same way. While an extreme example, the same holds true here. More importantly, real-world decision-making is forward-looking, not in hindsight. While affordability is a real issue, we also need to be concerned about incentives for innovation for a disease area that has continued to be one of the biggest challenges to our society. Recent innovations hold promise for the future, but the battle is by no means over as cancer is still one of the leading causes of human suffering.


The pharmaceutical pipelines are filled with desperately needed innovation in oncology thanks to society’s willingness to pay. As these innovations progress, competition will be more intense, and cost will fall, particularly when one or more in a class lose their patent. Today’s often costly targeted treatments will be tomorrow’s low-cost standard options. Drug budgets for hepatitis C have been very high initially but will decline to practically zero as the disease will hopefully be virtually eradicated soon because of the new drug launches. In some therapy areas, such as antibiotics and anti-tuberculosis agents, we have some challenges in funding innovation, as unmet medical needs have not generated enough willingness to pay for private investors to engage. Finding solutions for these situations has been subject of discussion in the EU and at the WHO level at the 2017 Fair Pricing Forum. However, some sort of misplaced multi-governmental intervention in the global pharmaceutical development process is almost certainly doomed to lead to disaster, even if such an agreement between governments was even feasible. We need to work hard to find solutions for funding and affordability problems, but not destroy much-needed hope for the future for cancer, cardiovascular disease, Alzheimer’s disease, NASH and other debilitating conditions.

Global pricing of prescription medicines is really a tough political nut to crack due to the geopolitical issues between high- and low-/middle- income countries. The pharmaceutical industry is literally caught between rich and poor countries that are only united through their despise of the pharmaceutical industry. Here’s why:

  1. High-income countries refuse to pay more than others. The Trump administration wants prices of Medicare Part B drugs to be referenced against several countries with lower incomes, including the Czech Republic. The U.S. public opinion and politicians on both sides of the aisle are strong drivers behind this.
  2. Lower- and middle-income countries demand much lower prices. Driven by affordability and sometimes under threats of compulsory licensing, governments, medical communities and patients demand far lower prices that are in line with population income levels. 
  3. Governments capitalize on price differences between countries. International price referencing laws that exist in many countries and free trade agreements encourage governments and wholesalers to take advantage of any existing lower price for a drug globally, albeit that there are some restrictions in place on formal trade outside of the European Union. Transparency in (lower) prices will further drive this trend.

A resolution of this dilemma would benefit all. From a purely economic perspective, pharmaceutical companies would maximize their returns if they could adjust prices to reflect local affordability and willingness to pay in each country. Lower prices would lead to higher utilization in lower- and middle-income countries and, in many cases, the higher volumes would contribute more toward R&D efforts than they do today. This, in turn, creates less pressure in high-income market returns on investment. Conversely, if some products will only be used in the U.S. due to the International Price Index introduction, companies are choosing not to pursue registration and payer approval in ex-U.S. markets, so prices in the U.S. would need to go up to cover the shortfall of contributions towards funding of innovation from international markets. The drug industry can’t solve this global political issue without the support of governments from high-income countries and the continued willingness of citizens in these countries to pay more for drugs (as they do for medical services) in comparison with lower-income countries.


Unfortunately, many generic drugs have been subject to excessive price increases. In some cases, this can happen when only one company remains after intense competition. Some generics manufacturers have unfortunately often exploited these situations. As was concluded in the 2017 Fair Pricing Forum discussions, governments should be careful not to make the tendering process too competitive to maintain the presence of several quality suppliers of generics.

Most if not all pharmaceutical companies have very robust processes in place to select assets and indications for further development. Since meeting unmet needs is a market requirement for willingness to pay, drug assets that have the greatest potential in meeting that need are naturally floating to the top of the list. This selection process should naturally align with the perceived need by the medical community, and it is thus surprising to note the criticism in the WHO report on that front. I do share the concern over decision-making with respect to evidence-generation, fully demonstrating value versus existing alternatives in the market. A placebo-controlled trial seems to only be appealing to the FDA and only really makes sense where there’s no alternative treatment available.

What are some prudent initiatives to address patient access to healthcare challenges in low- and middle-income countries? Here are my observations:

  1. Discussion of the issues and collaboration around creating solutions is central to solving this problem. Any discussion would need to include a broad representation from all stakeholders involved. Discussions such as the Fair Pricing Forum have great value in bringing stakeholders together, albeit that industry and high-income countries were underrepresented. U.S. and European government participation are essential considering the negative impact of their international price referencing laws and trade agreements on the viability of differential pricing.
  2. Government controls are likely to have no impact or a negative impact as they don’t address the fundamental problem and may simply force pharmaceutical companies to avert their focus away from lower- and middle-income countries over concern of a devastating impact on their core business in the U.S., Europe and Japan.
  3. While the pharmaceutical industry can do a better job in communicating its complex business and engaging in discussions regarding unmet needs, its processes will need to continue to focus on funding innovation in a competitive environment. Claims regarding excessive profits are biased by a focus on the analysis on the most successful drugs and with an overly short time horizon. Investment cycles and related competitive reactions take place in a time frame of five-plus years.

The WHO report doesn’t make a single reference to input from the pharmaceutical industry or industry experts. It may make for a pleasant experience in singing “Kumbaya” together, but as a result of a lack of pharmaceutical industry understanding, the report offers little hope towards real solutions for patients.


Let’s hope that in a world that’s centered on 140-character statements, we can find the will and time to sit together to find solutions for access to healthcare worldwide.