As we continue our examination of Luigi Mangione’s alleged assault on the insurance industry and its justification, we need to examine another area in which insurance must cope with inflated costs. This area is the price of drugs as determined by pharmaceutical companies. It represents another arena in which insurance companies are called upon to be the grown-ups in the room and to exert some level of control, while the rest of the involved parties — patients, physicians, hospitals, the government — mostly stand mute. In certain circumstances, does withholding of authorization for an excessively expensive drug represent evil behavior on the part of the insurance company or does it represent sound fiscal practice?

The cost of cancer drugs is a topic which has been much discussed in the context of the overwhelming cost of healthcare in the United States. This column has often highlighted the remarkable success of the pharmaceutical industry in drug discovery and its concomitant achievements in curing cancer, prolonging life and improving the quality of life for cancer patients.

One of the downsides of this success has been the financial cost that is attendant on these drugs. Certainly, it is true that we live in a capitalist society, and it is those very principles that have led to these accomplishments and powered the drive to achieve profits which are usually well deserved. Nonetheless, the prices of new drugs in medicine in general, and in cancer medicine in particular, seem to be disproportionately overpriced, and often without an obvious basis or justification for how the prices were determined.

To a large degree, these prices are tolerated because patients do not overly complain, a problem we have alluded to in previous articles. And they do not complain because they are generally shielded from the prices by the nature of the insurance system in the U.S. which bears the brunt of the costs. For the most part, aside from co-pays or a fraction of the population who are uninsured, patients do not pay the bulk of drug costs. This is not dissimilar to the payment of equally outrageous costs for expensive procedures such as PET scans.

A cogent illustration of this problem was recently published in the December 2024 issue of JAMA Oncology by Bishal Gyawali and his colleagues of Queen’s University in Kingston, Canada. They reviewed the pricing of enzalutamide (Xtandi), a drug produced by Astellas, a subsidiary of Pfizer. It is an anti-androgen drug utilized in conjunction with conventional anti-androgen treatment, and is very effective in prolonging progression-free survival for patients with advanced prostate cancer. It was first developed and patented by investigators at UCLA and then received its first approval by the FDA in 2012. The research and development of this drug was paid for by research grants and U.S. taxpayer funds to the tune of $75-100 million.

The retail list price for enzalutamide in 2025 is approximately $180,000 annually. What is anomalous is that this far exceeds the price that is charged in other high income countries. In 2022, the annual price for this drug was $25,000 in Japan; $32,000 in Canada; and $31,000 in Australia. It was estimated that the U.S. list price was three to five times higher than the price in the countries of the European Union.

This is one issue for which a single-payer system would probably be beneficial. A single payer is able to negotiate prices and bring them down. Thus, in Great Britain, the National Institute for Health and Care Excellence (NICE) authorizes drugs for inclusion in the national formulary only if the price of the drug is brought down to a level that is consistent with a formal cost-effectiveness analysis. Such an approach to cost containment in the U.S. would be quite difficult in the absence of a single payer; this has not been a feature of U.S. healthcare

Another problem is an absence of health technology assessments (HTAs). These are formal assessments of the cost-benefit of new drugs; i.e., the relationship between the price and the clinical benefit that the drug purportedly provides.

Astellas argues that 87% of enzalutamide prescriptions cost patients $50 or less. However, an analysis published in Urology Practice in 2024 indicated that while it is true that very few patients are asked to pay the list price, patients insured with Medicare Part D had a median annual out-of-pocket expense of $11,600. And even if the patient is not paying, someone is paying and we all ultimately must share the taxpayer burden; for example, for Medicare and Medicaid.

How can these prices be brought under control? Even though there is not a single-payer system, insurers could still exert an enormous amount of influence. For example, another drug for advanced prostate cancer, abiraterone, works essentially as well as enzalutamide and costs about 10% as much (about $18,000-$20,000) — an insurance company could ask an oncologist to switch to save money. Of course, who knows what protests of interference that would arouse from the various parties involved? The better question is why isn’t the oncologist and other healthcare providers paying attention to this and other drug costs in the first place? But just imagine if insurance companies ceased to authorize enzalutamide in most circumstances as a drug that was not cost-effective — how many more executives would Luigi Mangione, Elizabeth Warren and others condemn to punishment?

Once again, I would invite readers to email me their thoughts on the issues raised in these articles as they appear in The Link and, depending on the response, I will put together one or two articles with readers’ comments after my eight articles appear.

Alfred I. Neugut, M.D., Ph.D., is a medical oncologist and cancer epidemiologist at Columbia University Irving Medical Center/New York Presbyterian and Mailman School of Public Health in New York. Email: [email protected].

 This article is for educational purposes only and is not intended to be a substitute for professional medical advice, diagnosis or treatment, and does not constitute medical or other professional advice. Always seek the advice of your qualified health provider with any questions you may have regarding a medical condition or treatment.