As new therapies arrive, oncology spending projected to increase over 50% by 2025
Perhaps no drug category provides a clearer window into the future of medicine than oncology.
Oncology is the largest therapeutic category of new drugs under development. Therefore, it is important to understand the range of therapies and what this means for future spending.
Currently, the majority of new treatments target rare cancers. Of the 17 new cancer drugs in the U.S. in 2020, 16 were orphan drugs. As we have noted, drugs receiving an orphan drug designation from the Food and Drug Administration (FDA) typically come with high costs.
For plan sponsors, this ongoing influx of novel cancer treatments will result in increased drug spending. Oncology spending in the U.S. will exceed $110 billion by 2025, up from $72 billion in 2020. 1
An increasing ability to identify the specific genetic mutations responsible for cancer is behind many of the recent innovations in oncology. A better understanding of cancer biology at the molecular level has led to a more precise type of cancer diagnostics known as biomarker testing. These genomic tests look for cancer biomarkers in blood, other body fluids or tissues.
Using biomarkers, physicians are now more able to gain information about the specific type of cancer a person has. For example, breast cancers were historically classified into two main types. Now, gene expression analysis has identified four main molecular subtypes. 2
In addition to better categorizing common cancers, researchers are increasingly identifying rare cancers impacting smaller subsets of the total population. Rare cancers affecting fewer than 40,000 people per year in the U.S. now make up just over a quarter of all cancer diagnoses. 3
Researchers are now developing drugs designed to counter specific genetic alterations fueling cancers. Targeted therapies and immunotherapies are two of the most promising treatment categories for cancer. Importantly, many of these therapies only work for people with specific biomarkers.
New options for lung cancer
In the U.S., lung cancer is one of the most common cancers in both men and women. It is also the deadliest, making up almost 25% of all cancer deaths. 4
Non-small cell lung cancer (NSCLC) is one of the two main types of lung cancer. In May, the FDA granted approval to Lumakras™ (sotorasib) for certain people with NSCLC. The approval was noteworthy because the drug is designed to counteract a previously untargetable genetic mutation known as Kirsten rat sarcoma viral oncogene homolog (KRAS).
Lumakras targets a particular KRAS mutation which is present in 13% of people with advanced NSCLC. Testing identifies approximately 25,000 new patients with KRAS G12C-mutated NSCLC in the U.S. each year. In addition to granting accelerated approval to the drug, the FDA has also recently approved two tests that screen patients for this mutation. Lumakras will have a list price of about $17,900 per month.
Researchers are probing other mutations linked to lung cancer, such as those on the epidermal growth factor receptor (EGFR) gene. Approximately 30% of NSCLC tumors have a mutation in the EGFR gene. However, mutations on one area of the EGFR gene (exon 20) are less common, making up 2 to 4% of EGFR mutations in NSCLC. 5
In May, the FDA granted approved to Rybrevant™ for NSCLC patients with these mutations. The FDA approval may be contingent upon confirmatory trials. At the same time, the FDA approved a biopsy blood test as a companion diagnostic for use with Rybrevant. The FDA also recently granted priority review status to another drug targeting EGFR exon 20 mutations in NSCLC, mobocertinib.
One irony about targeted therapies is that they may have the potential to be effective against a wider variety of cancer types. For example, KRAS mutations are also prevalent in colorectal and pancreatic cancers. 6 Likewise, researchers note the high frequency of EGFR mutations in head and neck cancers. 7 Researchers are also studying a family of genes known as neurotrophic tyrosine receptor kinase (NTRK) genes. Biomarkers for NTRK mutations may be useful in identifying as many as 25 different types of cancers located throughout the body.
The ascent of immunotherapy
Much like targeted therapies, immunotherapies represent a growing force in cancer treatment. Immunotherapies come in a variety of mechanisms of action, but all rely upon the body’s own immune system to fight cancer.
Immune checkpoint inhibitors affect the programmed cell death protein 1 (PD-1)/programmed death ligand 1 (PD-L1) pathway in the immune system. Blocking this pathway allows the body’s immune cells to better respond to cancer cells. Since the introduction of the first checkpoint inhibitor a decade ago, more have entered the market. As a result, PD-1/PD-L1 drugs now contribute to much of the growth in oncology spending. 8
Chimeric antigen receptor (CAR) T-cell therapy is another type of immunotherapy. CAR T-cell therapy engineers a patient’s own immune cells to recognize and attack cancer cells.
For the past several years, CAR-T had only three entries in the class and relatively slow uptake. However, 2021 has seen a burst of activity with two new approved CAR-T treatments. In February, the FDA approved Breyanzi® (lisocabtagene maraleucel) for certain adults with lymphoma.9 In March, the FDA approved Abecma® (idecabtagene vicleucel) for adults with multiple myeloma who have not responded to or relapsed after at least four prior lines of treatment. 10
Any discussion of CAR-T needs to address the costs. Although intended as curative one-time treatments, the costs related to these therapies are considerable. The list price for Breyanzi is $410,300. 11 The list price of Abecma is set at $419,500. 12 These prices are in line with other CAR-T therapies in the market.
One of the reasons why existing CAR-T treatments are so expensive is that they are an “autologous” therapy. This means a patient's own cells, in this case T-cells, are taken from the patient they intend to treat. Highly trained scientific staff then modify and multiply the cells in a lab. Next, the cells are re-introduced back into that same patient.
One hope regarding CAR-T therapies is that the cost per dose will come down as the technology matures. One immunology researcher said recently that he would be “very surprised” if autologous therapies cost more than $100,000 to $150,000 per treatment within five years. 13
This reduction in price is something to hope for, as hundreds of clinical trials are underway involving CAR-T therapy. More products and more indications mean the number of patients eligible for CAR-T therapies will grow.
Keeping track of a complex disease
Biomarkers and cancer genomic tools have revealed the diversity of cancer and ushered in a new era of precision treatments. Yet, as promising as targeted therapies and immunotherapies are, they are far from the only new trends in cancer therapies. They are a growing part of an ever-expanding toolbox for oncologists.
Moreover, just because a new cancer drug enters the market doesn’t mean it will or should replace existing therapy options for every patient. Many of these drugs will be used in concert with existing therapies such as chemotherapy. 14
It is also worth noting that many of the new oncology drugs to reach the market recently have done so with accelerated approvals from the FDA. In March, the agency said it will reassess expanded indications for several immune checkpoint inhibitors granted accelerated approval that are failing to prove clinical benefit in confirmatory trials. 15
A group of independent physician providers and pharmacists comprise the OptumRx National Pharmacy & Therapeutics Committee. Before placing new drugs on formularies, the P&T Committee rigorously evaluates them based on clinical evidence.
As the cancer care ecosystem becomes increasingly complex, OptumRx gives providers clear, actionable insights into the latest cancer treatment options. To help improve outcomes for cancer patients, we have developed clinical management programs. These programs equip patients with the resources, tools and clinical assistance needed to better manage their condition.
“The ongoing arrival of newer therapeutics such as targeted and immunotherapies truly underscore just how dynamic oncology is right now,” says Savitha Vivian, senior vice president of clinical services, OptumRx. “OptumRx proactively identifies upcoming oncology therapies through our dedicated pipeline surveillance and conducts rigorous clinical review upon approval. This work informs our formulary strategies and clinical program offerings and enables us to focus on delivering optimal outcomes for patients and plan sponsors.”