Cancer Drug Launch Prices Skyrocket Beyond Inflation
TL/DR –
The launch prices for Medicare Part D anticancer drugs have significantly increased since 2012, and in 2025, the prices were 14.8%-200.9% higher than what they would have been if they had only kept pace with inflation. Despite the introduction of the Inflation Reduction Act of 2022, which brought in price negotiation for Medicare-covered drugs and mandated manufacturers to pay rebates for price increases above inflation, it did not address the launch prices of new drugs. Furthermore, the study revealed that between 2012-2014 and 2023-2025, the mean monthly launch price rose from $10,954 to $27,891, indicating that companies continued to maximize prices for anticancer therapies even after the implementation of the Inflation Reduction Act.
TOPLINE:
Medicare Part D anticancer drug launch prices have seen significant increases since 2012, with an average rise of $1694 per year. In 2025, drug prices were observed to be 15%-200% higher than the expected inflation-adjusted amounts. The disparity between observed and inflation-adjusted prices did diminish over the study period.
METHODOLOGY:
- The 2022 Inflation Reduction Act implemented price negotiation for Medicare-covered drugs and mandated manufacturers to provide Medicare rebates for price rises exceeding inflation. However, this act didn’t tackle new drug launch prices.
- Anticancer drugs, falling under the protected and mandatory Medicare Part D coverage, are now more susceptible to higher launch prices. This is partly due to the Inflation Reduction Act curbing out-of-pocket expenditure and price growth post-market entry.
- The researchers examined 86 branded, self-administered, molecularly targeted anticancer therapies approved by the FDA between 2010 and 2024. Drug price data was collated from the Medicare Prescription Drug Plan Formulary, and inflation-adjusted.
- The study considered launch prices annually and compared 2025 drug prices with those predicted if launch price increments were solely due to inflation since market entry.
TAKEAWAY:
- The average monthly launch price escalated from $10,954 (for drugs first observed in Medicare formulary 2012-2014) to $27,891 (for drugs first observed in 2023-2025).
- Inflation-adjusted, the average launch price increased $1694 per year.
- In 2025, actual drug prices were 14.8%-200.9% higher than if they had increased at the rate of inflation alone.
- Despite the Inflation Reduction Act’s rebate clause (effective from autumn 2025), drug price rises continued to surpass inflation in 2023 and 2024, narrowing the gap between observed and inflation-adjusted prices.
IN PRACTICE:
The launch prices for self-administered targeted anticancer therapies have soared. The steady growth in anticancer therapy launch prices suggests that companies were maximizing anticancer therapy prices before and after the Inflation Reduction Act’s implementation.
SOURCE:
The study, conducted by Stacie B. Dusetzina, PhD, of Vanderbilt University School of Medicine, was published online in JAMA.
LIMITATIONS:
The study used example indications to identify monthly doses and pricing. It also noted variations in available price measures throughout the study period.
DISCLOSURES:
Arnold Ventures funded the study. Several authors disclosed receiving grants, personal fees, and having other affiliations with different sources.
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