Global cancer drug spending rises, set to surpass $150 billion by 2020

Dive Brief:

  • Global cancer drug spending hit $107 billion in 2015 and is projected to surpass $150 billion by the end of the decade, according to a new report on the oncology market from IMS Health. Annual growth rates accelerated between 2011 and 2015 as dozens of new therapies came on the market. 
  • IMS' forecast of $150 billion in 2020 spending is underpinned by a dramatic expansion in the pipeline of cancer drugs. Over the past decade, the number of drugs in clinical development has risen by over 60%, according to IMS. 
  • But access to new treatment options remains an issue. Only six countries had more than half of the new drugs analyzed by IMS available to patients. 

Dive Insight:

IMS' report, released ahead of this weekend's major cancer meeting hosted by the American Society of Clinical Oncology, depicts a rapidly growing oncology market. More than 70 new cancer drugs treating over 20 tumor types have been launched over the last five years, according to IMS. 

Those new therapies have driven up spending and widened treatment options for patients. New targeted treatments, such as the new immuno-oncology drugs from Bristol-Myers Squibb, Merck, and Roche, have shown dramatic promise in improving clinical outcomes. 

Nearly 90% of cancer drugs currently in clinical development are targeted therapies, up from 78% in 2005, IMS said. R&D activity is particularly high for non-small cell lung cancer and melanoma.

With such a broad pipeline, spending is predicted to continue rising at between 7.5% to 10.5% annual growth rates through 2020. This will push global spending up from the $107 billion hit in 2015 to over $150 billion as measured by invoice price levels, according to the report. 

Growth in global oncology spending 2011-2015
IMS Health

"The focus on oncology will continue over at least the next five years, driven by unmet needs that remain high, a bulging pipeline of oncology drugs in clinical development, and limited availability in most countries of drugs that are already approved and launched elsewhere," said Murray Aitken, executive director of the IMS Institute for Healthcare Informatics. 

IMS also sees the flood of new drugs contributing to pushback from payers, who are wary of the higher prices these new drugs can command. "Payers are expected to tighten their negotiation stance with manufacturers in an effort to limit growth in this part of their healthcare budgets," the report said. 

But the report did note that rebates and other discounts are leading to a reduction in manufacturer-realized net sales. While invoice prices grew 6.4% in the U.S. last year, net price growth on existing cancer drugs averaged 4.8% in 2015. 

The U.S. market accounted for 46% of the total global market for cancer therapeutics, due in part to a stronger dollar as well as broader uptake of new drugs. 

In only six countries—the U.S., U.K., Germany, Italy, France, and Canada—were more than half of the 49 new active substances IMS studied available to patients. For example, while targeted immunotherapies were generally available in developed countries, no emerging market outside of the E.U. have registered those particular drugs. IMS also pointed to a lack of reimbursement by public insurance programs as a factor in limiting access. 

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Filed Under: Drug Discovery Clinical Trials Marketing