Fact Check Friday: The Truth about Spending on Cancer Medicines

This week, as part of our Catalyst blog series: Fact Check Friday, we debunk a myth about cancer care to show that maybe the sky isn’t falling after all.

MYTH:

Cancer drug costs are unsustainable.

FACT:

Spending on cancer medicines represents less than 1% of overall health care spending.

Spending on cancer medicines represents just 1 percent of overall health care spending in the United States.  In fact, Milliman found that cancer medicines represents 20 percent of total spending on cancer treatment, whereas inpatient spending accounts for approximately 43 percent and other categories make up 37 percent of spending. These findings are consistent with a 2013 study of a large commercially insured population, which found that among severely ill patients, medication costs were about one-fifth (20 percent) of total health care spending. Looking ahead, spending on cancer medicines is expected to increase by 6-8 percent through 2018 according to IMS Health.

Despite representing such a small share of spending, cancer medicines are often singled out because insurance covers a lower share of prescription drug costs than other medical services. On average, patients pay out of pocket nearly 20 percent of their total prescription drug spending, compared to 5 percent of spending for hospital care. This violates the basic purpose of insurance, and why our focus should be on improving coverage for medicines.  At the same time, the biopharmaceutical industry continues to work directly with patients through platforms, such as the Partnership for Prescription Assistance, to help patients access needed medicines.

In the last several decades, we have made tremendous progress in the fight against cancer, and while it remains pervasive, there is hope that cancer can one day be a chronic, manageable disease. In order to achieve this goal, we need to look holistically at the cost of cancer care and maintain an ecosystem that supports and encourages the development of innovative new therapies. 

Read other Fact Check posts.

Subscribe to timely updates. {{cta('4fe14269-44de-493b-a19c-946e0454614a')}}