A study finds that novel and pricey new therapies led to a sharp spike in global cancer drug spending last year.
The worldwide oncology drug market ballooned to $107 billion in 2015, according to the report by IMS Health, with spending on cancer treatments swelling 11.5%. The market is expected to reach $150 billion by 2020.
Much of the spending growth stems from the explosion of new cancer treatments that have come to market in the past five years, including immunotherapies which harness patients’ immune systems to fight cancer. In fact, the study authors note that there have been 70 new cancer therapies approved in the last five years, and the vast majority of pipeline candidates (90%) are for targeted, personalized treatments (which makes sense considering these types of cancer drugs have a far higher chance of making it all the way through the FDA regulatory process).
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The report points specifically to two immunotherapies, Merck’s (MRK) pembrolizumab and Bristol-Myers Squibb’s (BMY) nivolumab, also known by their respective brand names Keytruda and Opdivo, noting that the drugs have been racking up indications across multiple cancer types like melanoma and lung cancer and are being tested across 30 different tumor types. Both drugs have been big sellers for the pharma giants.
The rise in cancer drug spending has disproportionately affected the U.S. That’s for a number of reasons, including the fact that new oncology medicines are far more likely to be approved an available in America than in other countries.
According to the report, the cost of cancer drugs in the U.S. rose by nearly $16 billion since 2010, and more than $9 billion of that stemmed from uptake of treatments approved since 2010.