Five years previous, spending on cancer drugs was $75 billion, according to a report from the IMS Institute for Healthcare Informatics published Tuesday. The organization said that therapies which target specific drivers of cancer now make up nearly half of total spending, writes Meg Tirrell for NBC.
Further increases predicted
More cancer drugs are about to enter the market, which looks set to drive further increases in spending. Globally, cancer medicines have seen a compound average growth rate of 6.5% in the past five years, and IMS predicts that this rate will be between 6 and 8% through 2018.
Michael Mauboussin: Here’s what active managers can do
In 2014, 10 new cancer drugs came to market, and that figure rises to 45 for the period 2010-2014. Two of those are a new kind of drug known as immunotherapies, which scientists believe could be a great advance in the fight against cancer. The two immunotherapies are known as Opdivo, manufactured by Bristol-Myers Squibb, and Keytruda, which is made by Merck. Both drugs have a price tag of $12,500 per month.
The price may seem high, but both have shown significant improvements over traditional drugs. The report notes that two-thirds of those diagnosed with cancer in the U.S. now live for at least 5 years, while that figure was just over 50% in 1990.
Cancer drug spending set for further evolution
“We’re in for a period of intense competition among alternative treatments, which is a different dynamic than we’ve seen in the past where the progress has been a little slower and individual drugs had a little more time,” said Murray Aitken, executive director of IMS Institute for Healthcare Informatics.
Of the total spend, the U.S. accounted for 42.2%, closely followed by the 5 biggest European markets: Germany, France, Britain, Spain and Italy. In those big 5, spending on oncology drugs rose to 14.7% of total drug spending, an increase from 13.3% in 2010. In the United States, oncology spending reached 11.3% of the total spend, up from 10.7% in 2010.
Spending on cancer drugs looks set to continue rising, and a new generation of immunotherapies has scientists excited. Further growth in spending on cancer drugs is good news for the pharmaceutical sector after 10 years of slow growth.