Compounding pharmacy.

The few of you who don’t still use your parents’ account may have been disappointed when you heard Netflix was raising subscription costs. In their defense, for every earning with a Stranger Things they also have to shell out costs for a Big Mouth and Gaga: Five Foot Two. Conversely, there is surprisingly little data describing the rising monthly "subscription costs" of our frequently-prescribed cancer therapies. The media often harps on the sticker shock of new cancer drugs, but a recent JCO study shows that those prices remarkably continue to rise long after the drugs reach market. Among 24 injectable cancer drugs approved since 1996 and still under patent, monthly costs consistently increased an average of 3.7% annually (while the S&P 500 up-ed itself only 3.5%). Since 2005, rituximab costs increased an incredible 85% and trastuzumab 78%. So let’s examine what’s driving these price increases. Exit of competitors? Nope. Expansion of indications? Try again. The only significant association with relative price increase was time since launch. In other words, the longer the drug was on the market, the more the price rose--defying all basic supply and demand curves. The conclusion? Maybe we shouldn’t expect free market principles in a market free of negotiations.