OBJECTIVES: The US cancer drug market is a large market with multiple high-priced cancer drugs. This study examines the price trends of these drugs and variation in prices paid across commercially-insured patients from 2010 to 2014.

METHODS: We used a large commercial claims database and supplemental clinical information to identify drug characteristics and prices being Average Wholesale Price (AWP), transaction price, and patient cost-sharing amounts between 2010 and 2014 at the NDC level. Cancer drugs were identified by therapeutic group, and noted as either single source or multi source drugs. Price variation was assessed by comparing the 10^th percentile price paid to the 90^th percentile price paid for the same quantity, dosage of drug during a fixed time interval. Utilization was measured by prescriptions filled. Outliers were identified using statistical techniques and removed. Prices, trends, and variation were compared across different drug characteristics.

RESULTS: For single source drugs, the AWP increased 76%, transaction prices increased 74%, and patient cost-sharing increased 29% from 2010-2014. For multi-source drugs, the AWP increased only 6% while transaction price increased 93%, and patient cost-sharing had slight gains. The gap between the 10^th and 90^th percentile paid for a single source cancer drug increased from $183 to $474 suggesting increased dispersion. For multi-source, the gap increased from $37 to $55. For both single and multi-source drugs, a 10% increase in price variation is associated with a utilization increase of 1.1%.

CONCLUSIONS: There is evidence suggesting both the single and multi-source cancer drug markets are not freely competitive. The existence of price variation does suggest possible price discrimination. Policymakers should be aware of the increasing prices, especially patient cost-sharing. Policymakers should also recognize increased price variation is associated in increased utilization.