Global Cancer Spending Reaches $100B

The cost of paying for cancer treatment is rising, thanks in large part to better treatments and longer survival rates. 

According to the Global Oncology Trend Report, released Tuesday by the IMS Institute for Healthcare Informatics, global spending on cancer medications rose 10.3 percent in 2014 to $100 billion, up from $75 billion in 2010.

"We've made huge progress from a scientific perspective in understanding cancer," says Murray Aitken, executive director of the IMS Institute, a global information and technology services company. "It's not a single disease but so many sub-diseases. ... We're at the edge of a major breakthrough in terms of cancer treatment. It's a very exciting time." 

The report follows one from IMS Health released in April, which found that overall U.S. spending on drugs reached $373.9 billion in 2014 – a record high. This is largely attributable to the kinds of drugs on the market. Pharmaceutical companies are investing more and more in specialty medicines, such as complex, injected drugs rather than conventional treatments like pills. Spending on such specialty medicines grew 26.5 percent and accounted for one-third of medicine spending, up from 23 percent of the total spent five years ago. 

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Tuesday's report also found that the number of new, more complex drugs is on the rise. Pharmaceutical companies have produced 45 new drugs from 2010 to 2014 for 53 uses. In 2014, there were 10 new drugs launched globally, including five biologic therapies. 

These spending rates are increasing because the medicines for treating cancer aren't only more expensive – they are better. People are living longer under treatment, and cancer is diagnosed early because of increased screenings. Now, 2 out of  3 Americans survive at least five years after a diagnosis. In 1990, just over half lived that long. 

"Americans have access to more of the innovative drugs than any other country and they are seeing the benefits of those in terms of overall survival rates," Aitken says. 

U.S. 5-Year Relative Survival (All Ages, Races, Gender)

The report shows that the U.S. spends more on cancer drugs than any other country, making up 42.2 percent of total spending. It also revealed targeted therapies account for nearly 50 percent of the total and have been growing at a year-over-year growth rate of 14.6 percent during the past five years. 

Global Oncology Drug Spending (2010 to 2014)

Spending on cancer drugs has risen slightly as a percentage of total drug spending during the past five years in all regions. In the European Union, oncology represents 14.7 percent of total drug spending, up from 13.3 percent in 2010. In comparison, the U.S. has seen oncology increase from 10.7 percent to 11.3 percent of total drug spending during the same period.

When broken down by the total population, the report found the U.S. spent $99 per person​ in 2014, up from $71 in 2010. Most other countries showed the same growth, with the exception of Spain, where per capita spending has been flat. The percentage increase was largest in the United Kingdom, at 67 percent. 

Therapeutic Oncology Drug Spend Per Capita (2010 to 14)

Within the nine major developed markets, growth has increased sharply in the past two years, rising from $1.4 billion in growth in 2012, to $7.4 billion in 2014. 

And this growth is expected to continue. Future spending on oncology medicines through 2018 is projected to range from 6 percent to 8 percent, compared to 6.5 percent during the past five years as growing demand and new therapies are somewhat offset by new competition from biosimilars – a copy of an original product made by a different company – and small molecule generics after patents expire.  
The impact of these expirations has declined, from about $2.9 billion in 2011 to $1.3 billion in 2014, as fewer medicines lost protection and faced competition from lower-priced generics. Most of the higher spending growth is due to increased volume demand for branded products and newly launched products.

In developed markets, most growth is from new brands and increased volume

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Researchers for the report expect more breakthroughs in medicines for cancer because of the large number of potential new medicines in clinical development or under regulatory review. They also conclude there will competition among alternative treatments and increased movement toward more personalized medicines, which is a method that uses genetics to determine how someone will respond to a particular type of treatment. 

"There's more to come," Aitken says. "In particular in cancers like melanoma and [types of lung cancer]. Few had options before, but we are seeing many new drugs become available in the future." 

Access to cancer drugs varies across countries. In the U.S., patient out-of-pocket costs associated with IV cancer drugs have risen steeply as consolidation of smaller group practices into larger hospital systems has triggered higher outpatient facility costs shared with patients. Still, the U.S., Germany and the UK offer the most access, while South Korea, Spain and Japan have fewer than half of the new drugs available. 

"While we've made progress we still have a long way to go to win the war on cancer," Aitken says. "It takes time for new cancer treatments that may be initially adopted in a small number of academic medical centers to make their ways to community oncologists throughout the country. We should look into how we can accelerate that."