High and Growing Financial Burden of Cancer

The story quoted below would lead many to support socialized medicine, euphemistically called a “single-payer system” where the single payer is the taxpayer. But socialized medicine is inefficient and slows innovation. The main reason that cancer therapy has grown so costly is that the new therapies are very expensive to achieve approval. That expense could be slashed if we followed Milton Friedman’s suggestion to stop mandating hyper-expensive Phase 3 randomized clinical trials. (These are the large trials mainly intended to prove efficacy, while the much smaller and cheaper Phase 1 and Phase 2 trials are mainly intended to prove safety.) I am researching Friedman’s suggestion and hope to write more on it soon.

(p. A1) The economic burden of a cancer diagnosis is getting strikingly worse in the U.S., as drug and medical costs soar and more patients live longer with the disease. About 55% of cancer drugs introduced between 2019 and 2023 cost at least $200,000 a year, according to Iqvia’s Institute for Human Data Science. And an increasing number of patients are working-age, a group more likely to report financial hardship after diagnosis compared with older adults.

Nearly 60% of working-age cancer survivors report facing some financial difficulty. Many patients struggle to afford care and end up taking on debt, with some getting payday loans or running up credit cards. Cancer alone accounts for some 40% of medical campaigns seeking financial help on GoFundMe, research shows.

. . .

(p. A2) Among common diseases, cancer creates a uniquely difficult financial strain known as financial toxicity. Treatments with expensive medicines start immediately and come with a string of nonmedical costs. Chemotherapy and other treatments can leave patients too weak to work for weeks or months. This can result in a twofold blow, with patients losing income and their employer-sponsored health insurance.

. . .

The problem starts with costs for medical care and cancer drugs that have either risen above the rate of inflation or have high starting prices. Common cancer drugs have list prices that go well into the six figures: Imbruvica, which treats leukemia, has a list price of more than $213,000 for a full year. The average Medicare patient taking it paid $5,247 out-of-pocket in 2022, federal data show. AbbVie, one of the drug’s co-marketers, declined to comment.

. . .

Many insurers have shifted rising healthcare costs to patients. Some employer-backed plans require patients to pay a percentage of a drug’s cost, which can add up to thousands of dollars. One report found a 15% increase in out-of-pocket costs for privately insured, working-age cancer patients from 2009 to 2016. Patients also foot the bill for transportation, lodging, child care and parking.

. . .

People with cancer are at higher risk of ending up late on credit-card payments, mortgage payments, and experiencing other financial challenges than noncancer patients, according to research co-written by Dr. Scott Ramsey, director of the Hutchinson Institute for Cancer Outcomes Research at Fred Hutchinson Cancer Center in Seattle.

Other research shows that patients with more out-of-pocket costs are more likely to delay starting their medications or stop taking them. Ramsey and his co-authors also found that cancer patients who file for bankruptcy had an 80% higher risk of dying than cancer patients who didn’t file.

“There actually was a pretty big detriment for survival,” he said.

For the full story, see:

Brianna Abbott and Peter Loftus. “Cancer Costs Destroy Finances: ‘It Broke Me’.” The Wall Street Journal (Wednesday, May 29, 2024): A1-A2.

(Note: ellipses added.)

(Note: the online version of the story has the date May 28, 2024, and has the title “Cancer Is Capsizing Americans’ Finances. ‘I Was Losing Everything.’.”)

One of the relevant papers co-authored by Ramsey and mentioned above is:

Ramsey, Scott D., Aasthaa Bansal, Catherine R. Fedorenko, David K. Blough, Karen A. Overstreet, Veena Shankaran, and Polly Newcomb. “Financial Insolvency as a Risk Factor for Early Mortality among Patients with Cancer.” Journal of Clinical Oncology 34, no. 9 (March 2016): 980-86.

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