Cancer drugs are notoriously expensive to produce, because so many of them fail before hitting the market -- and that expense tends to get passed along to patients. In this clip from Industry Focus: Healthcare, host Kristine Harjes and Motley Fool contributor Todd Campbell look at a few of the biggest cancer drugs on the market today, and share how expensive they are for the people who take them.
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A full transcript follows the video.
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This video was recorded on Sept. 13, 2017.
Kristine Harjes: Just to give a little bit of color on what types of drugs we're talking about here, a lot of them are drugs that are coming from companies that we talked about all the time on the show. Do you want to share with our listeners a couple of the ones that made the list?
Todd Campbell: I think this is actually going to be, keep those numbers that we talked about at the top of the show in mind here. I'm going to throw out some monthly costs so you can put that in perspective. Again, we were talking about $475 for the car, $1,500 for the mortgage. But if you want to go out and buy Pfizer's and Astellas' Xtandi, it's going to cost you over $5,000 per month. And that's a prostate cancer drug.
Harjes: Yeah, this is a drug that gets around $2 billion in annual sales.
Campbell: If you want to go out and you need to get prescribed Exelixis' Cabometyx, it's going to cost you a whopping $13,600 per month depending on the dose.
Harjes: Right. And these are list prices that you're using, I'm assuming?
Campbell: Actually, no. I gave them the benefit of the doubt, I'm actually going with the Federal Supply price. This is the price that the government pays, which is going to be a factor based upon the negotiated prices that they actually charge to different commercial insurers.
Harjes: OK, interesting. In any case, most patients who are on this drug are insured, so they're not paying that entire sum out of pocket.
Campbell: Right, unless you're falling into the donut hole. If you're on Medicare, there could be some patients that get whacked with a big bill. But yes, as long as you have insurance, the insurance is picking up that tab. But, as we all know, Kristine, we've talked about this before in the past, the insurers don't make a lot of money on each individual person. So, one way or another, those costs are flowing through to us as consumers.
Harjes: Yeah, we do pay in the end, but because of the insurance industry, we end up paying more of an even split among the whole population.
Campbell: Right. Kristine, let me give you a few more of these to really hammer home the point. If you're going to get prescribed Johnson & Johnson's and AbbVie's Imbruvica, the government would be paying $6,800 to $8,300 per month. If you were going to get Seattle Genex's Adcetris, you'd be paying $5,000. [...] would set them back around $8,000. On and on and on. I think it's important for listeners, both from investing standpoint and as patients, as people, to recognize that there's really no end in sight to the sales that are being generated by these companies. The growth for each one of these drugs, all but one that I just listed, is double digits year over year.
Harjes: Yeah, they are relatively recently approved drugs. So, they're still under patent protection. There's really no end in sight for being able to command such high prices.
Kristine Harjes owns shares of Johnson & Johnson. Todd Campbell owns shares of Pfizer. The Motley Fool owns shares of and recommends Exelixis and Johnson & Johnson. The Motley Fool has a disclosure policy.