Payers and healthcare systems seeking reprieve from growing cancer costs had better buckle in. According to a new report, a record number of debut meds will drive worldwide cancer drug spending from $107 billion last year to new heights in 2020.
In its third annual examination of oncology medicines, IMS Institute for Healthcare Informatics ran the numbers and concluded that cancer drug spending will grow between 7.5% and 10.5% annually through 2020, bringing last year’s $107 billion figure to $150 billion by then.
That's great news for makers of oncology drugs, but it's creating “tension in the system” as payers sweat growing cancer costs, oncologists deal with new treatments, patients face more choices and regulators have to tackle initial molecule applications plus weigh approvals for subsequent indications, said Murray Aitken, the institute's executive director.
“Everyone in the health system is wrestling with this surge of innovation that’s bringing these remarkable new treatments to patients,” Aitken said on a conference call discussing the report.
For 2015 alone, the worldwide cancer drug market grew 11.5% versus the year prior, fueled by a “sustained level of innovation,” he said. The IMS Institute counted 20 different types of tumors that are now being treated by one or a combination of 70 cancer drugs launched in the last 5 years. Last year’s oncology spending growth figure is up from just 3.8% in 2011, the report notes, and growth in the U.S. has been even more dramatic. The U.S. cancer market grew 13.9% last year compared with 2014, and year-over-year growth in 2011 amounted to only 2%.
Going forward, the trajectory will reflect broader use of new meds, with immunotherapies such as Bristol-Myers Squibb’s Opdivo, Merck’s Keytruda and Roche’s Tecentriq grabbing a big slice.
The U.S. accounts for 45% of the world’s cancer drug spending, the report said. Net prices for oncology meds jumped 4.8% last year in the U.S., while invoice prices grew a bit more (6.4%). In Europe, net prices were lower than the U.S., IMS noted, because “a wide range of discounts” and “other mechanisms” held spending down.
As these trends unfold, Aitken said his group expects more payer pressure, plus new payment models that are being “considered, adopted and discussed.” That's a familiar refrain for pharma-watchers, who've seen the pricing squeeze unfold over recent months and years. CEOs from Novartis and Roche have both advocated for performance-based pricing, and some payers have signed deals on those terms.
What's more, Aitken said, is that the “stresses will be sustained” over the coming 5 years as the “innovation pipeline remains strong” throughout the industry. But while new drugs continue to roll out, access to them will remain “uneven” throughout the world, reflecting different regulatory processes, timing and efforts by companies to launch in individual markets, Aitken explained.
- here's the report
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