The launch prices of Medicare Part D anticancer drugs have risen dramatically since 2012, with an average annual increase of $1,694 per year, according to a new study. By 2025, actual drug prices were 15% to 200% higher than they would have been if increases were tied solely to inflation. While the gap between observed and inflation-adjusted prices has narrowed, costs continue to climb faster than inflation.
Key Findings
The average monthly launch price for new cancer drugs jumped from $10,954 (2012-2014) to $27,891 (2023-2025).
After adjusting for inflation, prices still rose by $1,694 per year (P < .001).
In 2025, actual prices were 14.8% to 200.9% higher than inflation-adjusted projections.
Despite the Inflation Reduction Act (IRA) of 2022, which imposes rebates for excessive price hikes, launch prices for new drugs remain unchecked.
Why Are Prices Rising?
The IRA introduced Medicare price negotiations and required drugmakers to pay rebates if price increases exceeded inflation. However, it did not regulate initial launch prices, allowing manufacturers to set higher starting costs—especially for anticancer drugs, which have mandatory Medicare coverage.
Researchers analyzed 86 FDA-approved, self-administered cancer drugs from 2010-2024. They compared actual 2025 prices with projections based on inflation-adjusted growth since each drug’s launch.
Industry Response & Limitations
The study suggests that drug companies were already maximizing prices before the IRA and continued doing so afterward.
Limitations:
- Researchers used example indications to estimate monthly doses and pricing.
- Pricing data varied over the study period.
Funding & Disclosures:
The study was funded by Arnold Ventures. Some authors reported receiving grants or fees from pharmaceutical companies.
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