For example, Memorial Sloan-Kettering Cancer Center, one of the nation’s top hospitals for cancer treatment, told the Wall Street Journal that Zaltrap, which is used for advanced colorectal cancer, comes in at an average cost of $11,063 per month, Sloan-Kettering also determined that the drug was no better than a less-expensive one that was already being used for treatment. Thus, it refused to use Zaltrap in its clinical practice.

The Food and Drug Administration, which is charged with approving new drugs, only determines a new drug’s safety and effectiveness. It does not consider how it will be marketed or its cost to the public in making its determinations.

Medicare, as a matter of law, must cover the costs of every cancer drug approved by the Food and Drug Administration and do so at the manufacturer’s price, plus 6 percent. Many states have similar laws governing insurance company reimbursements. Medicare’s Board of Trustees claims that prescription drug spending over the next 10 years will raise price growth by close to 10 percent in the next decade, a leap from 6.5 percent in the eight years prior to 2015. The average price of new cancer drugs is more than $100,000 per year, according to the Mayo Clinic.

Out-of-Pocket Costs

The median out-of-pocket expenditure for patients who had private health insurance was about $1,500 in the years 2003-2004, according to an analysis by the Henry J. Kaiser Family Foundation. Of those surveyed, about a quarter had expenses that topped $5,000. But the median income of Medicare beneficiaries is less than $22,000, the Foundation reported.