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Branded products are 92% US market in dollar value, says IMS Institute
It’s up, up, up for the oncology drugs: the IMS Institute for Healthcare Informatics, releasing its annual study just before the pivotal Am Soc. of Clinical Oncology meeting (June 3-7, Chicago). While the global rate of increase, 11.5% in constant dollars (and assuming ex-manufacturer pricing) is up from 3.8% per year in 2011, the corresponding rates in the US are growing even faster: from 2.0% per year in 2011 to 13.9% in 2015. These ex-manufacturer price figures are a good benchmark for overall industry trends, but the Institute has been more careful (at least with US numbers) to note the trend of net price growth (what the biopharma industry actually realizes from drug sales), net of pricing concessions to payers. That figure is an estimated 4.8% in 2015. (Some—but not all—of the difference between ex-manufacturer and net price represents avoided cost to healthcare payers; however, prescribers and other healthcare providers have mechanisms for retaining some of the savings themselves.)
Oncology drug costs are forecast to grow between 7.5 and 10.%% per year through 2020, when global sales could reach $148-178 billion. “The new science redefining cancer as a large number of narrowly defined diseases and yielding therapeutic options for an expanding number of patients is rapidly transforming the oncology treatment landscape,” said Murray Aitken, IMS Health SVP and executive director of the IMS Institute.
Globally, 49 new treatments were introduced between 2010 and 2014; of those, 41 are available in the US—the highest of any nation. Twenty-three to 38 of the drugs are available in the EU5; and all of six in China. All that being said, oncology represents a lower proportion of all drug costs in the US (11.5%); the figure is 15.9% in Germany, for example, and 14.2% in the UK. One way of reading that is overall pharmaceutical spending in the US is so much higher, proportionately, than in other countries.
Two conflicting trends can be seen in the US market for spending on oncology care: a higher proportion of drugs are oral medications, almost always dispensed at retail pharmacies—a mechanism that avoids some of the cost of healthcare providers. Oral medications represent 38% of oncology drug cost in 2015, up from 23% in 2005. At the same time, the proportion of sites of care has been shifting dramatically in recent years: only 17% of oncologists are in independent practices, says IMS, down from 28% in 2010. Most other oncologists are part of an integrated delivery network, or a corporate parent. However, the cost of care at hospitals is, on average, twice that of physician outpatient offices. (Not all hospitals are part of IDNs, and not all outpatient clinics are independent oncologists, but the two overlap strongly.)
The IMS Institute report is available here.