The global oncology market is the largest therapeutic area overall and in developed markets. In 2014, this segment reached the $100 billion mark. DCAT Value Chain Insights (VCI) examines the strengths and weaknesses of the global oncology market.

The global market for oncology drugs, including those used in supportive care, increased 10.3% in 2014 and reached $100 billion in 2014, up from $75 billion five years earlier, according to a recent analysis, Developments in Cancer Treatments, Market Dynamics, Patient Access and Value: Global Oncology Trend Report 2015, by the IMS Institute for Healthcare Informatics. The compound annual growth rate in spending over the past five years has been 6.5% globally on a constant exchange rate basis. So what is driving growth and what are future projections?

Growth drivers in the global oncology market
Earlier diagnosis, longer treatment duration, and increased effectiveness of drug therapies are contributing to rising levels of spending on medicines for cancer care. Although total global spending on oncology medicines, including therapeutic treatments and supportive care, reached the $100 billion threshold in 2014, the share of total medicine spending of oncologics increased only modestly, according to the IMS analysis. Growth in global spending on cancer drugs, measured using ex-manufacturer prices and not reflecting off-invoice discounts, rebates, or patient access programs, increased at a compound annual growth rate (CAGR) of 6.5% on a constant-dollar basis during the past five years. Oncology spending remains concentrated among the US and five largest European Union (EU) countries (France, Italy, Germany, Spain, and the UK), which together account for 66% of the total market. Growth in the US has risen more slowly, at 5.3% CAGR, with the market reaching $42.4 billion in 2014. Overall, oncology drug spending has risen slightly as a percentage of total drug spending over the past five years in all regions, most notably in the EU5 countries (France, Germany, Italy, Spain, and the UK), where oncology now represents 14.7% of total drug spending, up from 13.3% in 2010. Within the US, the increase has been more modest, rising to 11.3% from 10.7% over the same period. In the nine major developed markets, growth spending on oncology drugs has increased sharply, rising from $1.4 billion spending growth in 2013 to $7.4 billion spending growth in 2014, according to the IMS analysis. Most of the higher spending growth is due to increased volume demand for branded products in addition to newly launched products. The impact on patent expiries on reducing oncology spending has declined from about $2.9 billion in 2011 to $1.3 billion in 2014 as fewer molecules lost and faced competition from generics. The rising prevalence of cancer and greater patient access to treatments in pharmerging nations continues to grow and now accounts for 13% of the market. Pharmerging markets, as defined by IMS, refer to the most promising emerging markets for pharmaceuticals and include: Tier 1 pharmerging countries (China), Tier II pharmerging countries (Brazil, Russia, and India), and Tier 3 pharmerging markets (Mexico, Turkey, Venezuela, Poland, Argentina, Saudi Arabia, Indonesia, Colombia, Thailand, Ukraine, South Africa, Egypt, Romania, Algeria, Vietnam, Pakistan and Nigeria). Overall on a global basis, spending on oncology drugs, including therapies for supportive care, is expected to increase at a CAGR of 6% to 8% in 2018 to bring the global oncology market to $117 billion to $142 billion in 2014.

Targeted therapies have dramatically increased their share of the total global oncology spend. Targeted therapies now account for nearly 50% of total spending and have been growing at 14.6% CAGR since 2009. Targeted therapies now represent 48% of total oncology medicines spending, up from 36% in 2010. Meanwhile in the five-year period of 2010 to 2014, cytotoxic, hormonal, and supportive therapies have remained at about $52 billion in annual sales, according to the IMS report. “At the same time, payers and national health systems have intensified their scrutiny of the value of these medicines relative to their incremental benefits over existing treatments, with cost effectiveness assessments frequently resulting in limited patient access to these drugs,” explained IMS in its report. “Access and reimbursement issues are likely to become more complicated in coming years as individual and combination oncology medicines address multiple cancer types and patient populations with varying dosage and clinical value.”

“The increased prevalence of most cancers, earlier treatment initiation, new medicines and improved outcomes are all contributing to the greater demand for oncology therapeutics around the world,” said Murray Aitken, IMS Health senior vice president and executive director of the IMS Institute for Healthcare Informatics, in commenting on the report. “Innovative therapeutic classes, combination therapies and the use of biomarkers will change the landscape over the next several years, holding out the promise of substantial improvements in survival with lower toxicity for cancer patients.”

Contributing to increased spending on oncology drugs are improved clinical outcomes for major cancers. The IMS study points out that in most instances, five-year survival rates have risen through continuous and small improvements in detection and treatment, including refinements with existing treatments and gains from new treatment options. Within the US, two-thirds of Americans diagnosed with cancer now live at least five years, compared to just over half in 1990.

On a pipeline basis, key advances include new “immuno-oncologics” that hold out the promise of improved survival with lower toxicity for some patients, as well as combination therapies that can address multiple pathways in a tumor, potentially leading to substantial increases in survival. Among the immuntherapies, key recent approvals or pipeline candidates include: Bristol-Myers Squibb’s ipilimumab,a monoclonal antibody directed against cytotoxic T-lymphocyte-associated antigen-4 (CTLA4), approved in 2011; PD-1 targeted therapies approved in 2014; Bristol-Myers Squibb’s nivolumab and Merck & Co.’s pembrolizumab; and chimeric antigen receptor-T cells (CARTs), cell-based therapies that condition a patient’s T cells to recognize a specific cancer, are also a promising class of immuntherapy. In terms of combination oncology drugs, the IMS study points out that a large number of combinations will launch over the next six years with an inflection point in the 2020-2021 time frame, when 15 oncology combination are expected to launch in 2020 and 34 in 2021 and beyond. Roche is developing the largest number of combinations and most manufacturers have multiple combinations in their pipelines. Most combinations include agents from two or more manufacturers although Roche, Bristol-Myers Squibb, AstraZeneca, and Janssen are studying combinations of a new molecular entity and an existing agent that are both made by a single manufacturer. Additionally, therapeutic effectiveness in multiple genetic subpopulations is being improved through the use of real-world evidence from deep biomarker data linked to treatment information. Molecular diagnostics are transforming drug development and patient selection, but only one-third of new oncology drugs have an identified biomarker at time of launch, according to the IMS study.

Overall, oncology pipelines have produced 45 new drugs for more than 53 uses from 2010 to 2014, according to the IMS study. In 2014, there were 10 new oncology drugs launched globally, including five biologics: two new immunotherapies; two checkpoint inhibitors (Bristol-Myers Squibb’s nivolumab and Merck & Co.’s pembrolizumab); a bi-specific T-cell engager (a new class of drug) as represented by Amgen’s blinotumomab; Eli Lilly’s ramucirumab; and Janssen’s siltuximab.

Patient access to cancer drugs varies across all markets. The availability of new oncology medicines varies widely across the major developed countries, with patients in Japan, Spain, and South Korea having access in 2014 to fewer than half of the new cancer drugs launched globally in the prior five years. In pharmerging markets, availability of newer targeted therapies remains low but is increasing. Even among wealthy countries, new drugs may not be reimbursed and, as a result, will only reach a very small number of patients, according to the IMS study. Average therapy treatment costs per month have increased 39% in the US over the past 10 years in inflation-adjusted terms. Over the same period, patient response rates have improved by 42% and treatment duration has increased 45%, reflecting improved survival rates. Within the US, patient out-of-pocket costs have risen sharply for intravenous cancer drugs, increasing 71% from 2012 to 2013, reflecting changes in plan designs and increased outpatient facility costs.