Global spending on cancer drugs surges to $100bn

Global annual spending on cancer drugs has hit $100bn for the first time as the pharmaceuticals industry prepares to launch a fresh generation of treatments that promise to push costs even higher.

The record 2014 figure marks a 10 per cent increase from a year earlier, largely due to rising drug prices and increased incidence of cancer.

The data - from the IMS Institute for Healthcare Informatics, a respected US research organisation - comes at a time of growing excitement among medics and investors over new cancer drugs heralded as the biggest step forward in oncology for decades.

Merck & Co, Bristol-Myers Squibb, Roche and AstraZeneca are among those developing so-called cancer immunotherapies that harness the body's immune system to fight tumours.

The earliest of these have been launched in the US in recent months at prices amounting to about $150,000 a year - generating fresh optimism around the pharmaceuticals industry after a decade of sluggish growth.

However, the expected surge of expensive new cancer drugs has raised questions over their affordability for healthcare systems already struggling with the rising cost of caring for an ageing world population.

"Earlier diagnosis, longer treatment duration and increased effectiveness of drug therapies are contributing to rising levels of spending on medicines for cancer," said the IMS report.

The compound annual growth rate in cancer drug spending increased to 6.5 per cent over the past five years and this was forecast by IMS to rise further to 6-8 per cent between now and 2018 as new treatments arrive.

"New therapeutic classes and combination therapies will change the cancer landscape over the next several years," the report said.

A scramble for high-margin cancer assets has been a factor in the mergers and acquisitions boom across the pharmaceuticals sector, including AbbVie's $21bn takeover in March of Pharmacyclics, maker of a fast-growing blood cancer drug.

IMS said rising prices would be mitigated by increased competition - particularly in immunotherapies as dozens of pharma groups and smaller biotech companies vie for position in the nascent market.

"The strong pipeline of medicines in clinical development . . . suggests that direct competition will increase in the next five years," said IMS. "Certain tumours, such as non-small cell lung cancer, will become battlegrounds, with multiple classes and multiple products within classes competing."

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The US accounted for 42.2 per cent of the oncology market in 2014, well ahead of Europe. But cancer drugs accounted for a bigger share of total drug spending in the top five European markets at almost 14.7 per cent, compared with 11.3 per cent in the US. This proportion increased in all regions of the world in the past five years.

Average per capita spending on cancer drugs was highest in the US at $99 in 2014, up from $71 in 2010, but the biggest increase was in the UK where it rose 67 per cent over the period to just over $40. Britain's National Health Service has this year cut access to several cancer drugs deemed insufficiently cost-effective in order to rein in spending.

Rising incidence of cancer poses a big policy challenge for global health systems as populations age - exposing more people to the biggest risk factor behind the disease: old age.

The number of over-65s on the planet is projected almost to triple between 2010 and 2050 to 1.5bn, according to the UN. This, in turn, will spur a 70 per cent increase in cancer incidence over the next 20 years, according to the World Health Organisation.

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