The global spend on oncology medicines has jumped from $75bn to $100bn in just five years as more new treatments hit the market at ever higher prices.
This is according to a new report by the IMS Institute for Healthcare Informatics: Developments in cancer treatments, market dynamics, patient access and value.
IMS Informatics’ report notes that cancer drugs are only incrementally improving outcomes, yet new treatments cost significantly higher amounts each year.
Global spending on oncology medicines (including therapeutic treatments and supportive care, and not reflecting discounts) increased 10.3% in 2014 and reached $100bn, up from $75bn five years earlier.
The compound average growth rate over the past five years was 6.5% globally on a constant exchange rate basis – although this was only 5.3% in the US.
Targeted cancer therapies now account for almost half of total spending and they have been growing at a compound average growth rate of 14.6% over the past five years.
Overall therapy treatment costs for cancer per month have also increased 30% over the past decade (when adjusted for inflation).
Roche is the biggest beneficiary of this with the Swiss cancer specialist marketing the world’s two largest cancer drugs: blood cancer drug MabThera (rituximab) and colorectal, breast, lung, ovarian and kidney cancer treatment Avastin (bevacizumab), which had combined sales of CHF13.3bn ($13.9bn) in 2014.
In the major developed markets, a sharp increase in the volume of protected brands in oncology since 2011 and significant new product launches have been the primary drivers of spending growth, while the impact of patent expiries has moderated over the past few years, with few biosimilars on the horizon to significantly threaten future growth.
On a per capita basis, spending on therapeutic oncology medicines in the US reached $99 in 2014, up from $71 in 2010, with similar levels of percentage increase occurring in other major markets with the exception of Spain, where per capita spend has been flat.
Oncology drug spending has risen slightly as a percentage of total drug spending over the past five years in all regions, most notably in the biggest five EU countries, where oncology now represents 14.7% of total drug spending, up from 13.3% in 2010.
In the US, oncology has increased more modestly from 10.7% to 11.3% of total drug spending over the same period.
Future spending on oncology medicines through 2018 is expected to grow in the 6-8% range annually, compared to the 6.5% level seen over the past five years as growing demand and new therapy options are offset to some extent by new competition from biosimilars and small molecule generics following patent expiries.
Out of pocket costs
While spending has increased, so have concerns from payers that the costs are unsustainable, with many in insurance-based healthcare markets such as the US struggling to meet rising costs.
The report’s authors note that in the US, patient out of pocket costs associated with IV cancer drugs have “risen steeply”.
The report’s authors note: “Patient concerns about the financial burden of living with cancer is a frequent topic of discussion on social media sites which are increasingly used by those with cancer – and their families and caregivers – as a source of information and for sharing experiences.”
Many individual drugs are now costing upward of $100,000 per patient and health technology assessors are increasingly rejecting new oncology products because they are not deemed cost-effective, or are simply to expensive for payers to fund.
But with rising prices have also come rising survival rates over the past 20 years, with two-thirds of Americans diagnosed with cancer now alive at least five years, compared to just over half in 1990.
The authors note that this is not just down to new medicines, however, as survival gains have also improved as a result of increased screening and earlier detection, as well as advances in surgical and radiation oncology.
IMS Informatics says a new age of cancer therapies are now coming to the fore in the form of immuno-oncologics that can help teach the body’s immune system to fight off tumours.
Bristol-Myers Squibb and Merck & Co are already leading the way in this area with their drugs Opdivo (nivolumab) and Keytruda (pembrolizumab), which both currently have licences for melanoma, but are seeking wider indications.