Managing the high cost of cancer drugs

Hundreds of cancer types have been identified, but the common feature of all cancers is uncontrolled division by cells. So it follows that, since cancer is so varied, we need many kinds of treatments. For example, there are surgical procedures to remove tumors, and bone marrow transplants for leukemia. Other common treatment options include radiation and chemotherapy. 

Over the past decade, an increased understanding of cancer at the molecular and genetic levels has paved the way for new classes of interventions. 

These advances include:

Immunotherapies

These treatments rely on defeating cancer’s ability to evade the immune system. Rather than kill cancer cells directly, drugs such as PD-1 and PD-L1 inhibitors work by turning off specific proteins that prevent the immune system from attacking cancer cells. 

Drugs such as Keytruda® and Opdivo® are commonly used against a variety of cancers, including non-small cell lung cancer (NSCLC) and kidney cancer. Keytruda is now the best-selling drug in the U.S. by total sales, pulling in over $29 billion in 2024.² 

Targeted therapies

These drugs add a more precise approach to traditional chemotherapy by targeting only the specific molecules or pathways necessary for cancer to grow. Prominent examples of targeted therapies include HER2 inhibitors, which are commonly used for treating breast cancers, as well as tyrosine kinase inhibitors, which are used to treat other cancers including leukemia and lung cancers.  

Antibody-drug conjugates

An emerging type of targeted therapy, the drugs combine monoclonal antibodies with highly toxic anti-cancer agents. By delivering a chemical “smart bomb” directly to tumor cells, they can spare healthy tissue while selectively attacking the cancer cells.

Cell therapies

Therapies such as chimeric antigen receptor-T Cell (CAR-T) therapies harness the body’s immune system to help fight cancers. A patient’s own immune cells are extracted and genetically modified in a lab to better recognize cancer. The modified cells are then multiplied and reinfused into the blood stream to seek out and destroy malignancies.

Drugs designed for rare cancers continue to emerge from the pipeline and enter the market. Of the 16 new cancer medicines launched during 2024 in the U.S., 10 were first-in-class, meaning that they effectively have no competition.⁴

Drug makers are charging premium prices for these novel medicines. For example, in August 2024, the FDA approved Tecelra®, a genetically modified T-cell immunotherapy for metastatic synovial sarcoma, a rare cancer typified by solid tumors in the extremities of the arms or legs.⁵  Tecelra has a list price of $727,000 per treatment. 

In December 2024, the FDA approved Bizengri® (zenocutuzumab-zbco) for the treatment of people with rare types of non-small cell lung cancer or pancreatic cancer. Part of an emerging class of therapies known as bispecific antibodies, the drug targets tumors caused by errors in the NRG1 gene.⁶ It has a list price of $23,207 per intravenous treatment.

In addition to new and expensive cancer medications, a variety of social and clinical factors are also contributing to the rise in spending on oncology:  

Demographics

One factor is the increase in cancer prevalence associated with an aging population. The likelihood of getting cancer rises with age, with 88% of new diagnoses in the U.S. occurring in people 50 years or older, and 59% occurring in those 65 or older. As the population ages, cancers rise in tandem.⁷

Combination therapies

Many oncology regimens now include multiple types of anti-cancer agents, pairing new, expensive drugs with each other, or with older therapies. For example, immunotherapies can be paired with traditional chemotherapy, multiplying drug costs per patient. 

Broader use

Certain drugs see increased utilization as they earn new FDA indications beyond their initial approvals. For example, Keytruda was first approved in 2014 for advanced melanoma. It has since gained many subsequent approvals, including non-small cell lung cancer, head and neck cancers, and Hodgkin's lymphoma. 

Researchers estimate that as many as 21% of tumors may be amenable to this type of “tissue agnostic” approach, where a therapy targets a specific molecular or genetic alteration in cancer cells, rather than the organ or tissue where the cancer originated.⁸

Longer treatment durations

While varying widely according to cancer types, the five-year survival rate for all cancers has risen steadily over the past few decades, reaching 69% by 2020.⁹ This improvement often means patients receive continued treatment, increasing the cumulative costs of their oncology medicines.

This graph illustrates the increase in five-year survival rates for some of the most common cancers:

As a result of the convergence of these trends, spending on cancer drugs has risen steadily. Between 2019 and 2024, U.S. spending on oncology has doubled from $62 billion to $116 billion. This represents an average annual increase of 9.5%, outpacing inflation and growth in most other therapeutic classes.¹⁰

Inevitably, much of this increased spending is being absorbed by plan sponsors. Among traditional drug classes, oncology ranks third in overall spend, trailing only inflammatory conditions and diabetes. For specialty medications, oncology is the second largest driver of both specialty spend and trend, behind only inflammatory.¹¹

As with other drug classes, generics can play a role in offering appropriate care at lower prices. For example, Sprycel® is a popular specialty medication used to treat a form of leukemia; it represents about 5% of spending in the class. A generic for Sprycel launched in September 2024, and is already making a measurable impact on overall specialty trend.¹²

Similarly, biosimilar options may offer significant financial relief once they achieve market penetration. Unfortunately, only a few biosimilars have come to market. Further, the overall cost impact of biosimilars will be muted, as many of the costliest biologics will remain patent protected for years to come. Specifically, Opdivo and Keytruda are not expected to lose exclusivity until 2028.  

The escalating cost of oncology drugs presents a daunting challenge. Optum Rx is committed to helping plan sponsors navigate this complex landscape and mitigate their risk by employing a comprehensive approach to managing oncology:

• We maximize the value of your oncology spending by aggressively negotiating competitive contracts with manufacturers for optimal pricing on expensive new therapies.
• Our utilization management programs ensure that patients receive the most appropriate oncology therapies at the right time, aligning clinical value with cost.
• Waste in cancer care is another concern, including unused medications due to dosage changes, patient adverse reactions, or expiration. Our Fraud, Waste and Abuse programs constantly monitor care to detect these problems.
• Members dealing with cancer deserve access to the information they need, including which drugs are covered and their price, prior authorization requirements, and which pharmacies offer them the best deal.
• We also provide guidance around things such as copay cards, where manufacturers sponsor ways for them to reduce out-of-pocket costs.
• We proactively monitor the drug pipeline for upcoming new drug approvals and generic launches, allowing plan sponsors to anticipate and manage cost variances before they occur.
• Employing our leading analytics capabilities, we work with plan sponsors to optimize their benefit design to balance access, affordability and plan sustainability. 
• We leverage the collective expertise of our clinical team to support physicians in evidence-based decision-making for therapy selection, and to help patients better navigate their cancer journey and achieve optimal outcomes. 
• As a clinical-first PBM, we apply clinical expertise at every touch point, and evidence-based care to ensure the best outcomes at a better value. This is especially critical for members with high cost, specialty conditions, like cancer, who need connected care coordination and management of complex treatment regimens.

In addition to these strategies, Optum Rx plans to introduce an innovative new solution focused on comprehensive oncology drug cost management. This holistic, condition-specific benefit design covers all oncology drugs in a single program focused on supporting clients, members and providers.  

Talk to your Optum Rx partner to learn more about how we can help you mitigate rising oncology costs and promote better health outcomes for patients.