Cancer Drug Spending Tops $100 Billion

Total global spending on oncology drugs has increased by an average of 6.5% annually over the past five years, pushing the total in 2014 to more than $100 billion, according to a report published last week by the IMS Institute for Healthcare Informatics, the research arm of the health care data firm IMS Health. The effectiveness of new cancer drugs, combined with early diagnosis, has led to longer duration of treatment, which has significantly increased global spending, according to the report. IMS notes that targeted therapies—drugs designed to treat specific populations identified as receptive—are steadily increasing their share of the market, growing at an average of more than 14% annually for the past five years. The effect of drug price increases, however, is unclear, according to Murray Aitken, executive director of the IMS Institute. “It’s difficult to exactly disentangle price from volume,” Aitken says, “but what we can see is that in 2014, the largest contributor to growth in spending on cancer drugs came from the sales of newly launched drugs, followed by an increased volume of existing brands, and then price increases on brands.”