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We're in the middle of a gold rush in the cancer-drug industry

Lydia Ramsey   

We're in the middle of a gold rush in the cancer-drug industry
Science2 min read

In the past five years, 70 new cancer treatments have been approved for more than 20 types of tumors.

That surge in treatments is coming with a high cost. In 2015, global spending on cancer treatments hit $107 billion - up 11.5% over 2014, according to a new report released Thursday by the IMS Institute for Healthcare Informatics. Those costs are expected to hit $150 billion by 2020.

The $107 billion is based on what the manufacturers of cancer drugs are making when they sell to health insurance companies, pharmacy benefits managers and others.

"We've never seen a more fertile period for research and development in oncology," Murray Aitken, the executive director of the IMS Institute, told Business Insider. Along with that, Aitken said there's been a surge in cancer developers. Now, more than 500 companies are developing drugs targeting cancer.

Here's how the spending breaks down at the global level. US spending accounts for 46% of total oncology costs, up from 39% in 2011.

Screen Shot 2016 06 01 at 2.10.29 PM

IMS Institute for Healthcare Informatics

Although the rising cost of cancer medications could be troublesome for those trying to pay for it, Aitken noted that as new medications get approved, for the most part they will be for niche cancer types. So even if it comes in at a high cost, it won't have that much of an impact on the healthcare system as say a drug that's used to treat hundreds of thousands of people.

Plus, many of these newer drugs will be replacing older versions. That, combined with generics and biosimilars, means it won't be just a straight shot up as each new drug gets approved.

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