The Business Side of Cancer Treatments


Receiving a cancer diagnosis is devastating news for any family to hear. What makes it even worse is the price tag that comes along with its treatment. The months (or years) of hospital visits, doctor's appointments, tests, scans and chemotherapy sessions often add up to a hefty medical bill.

Cancer drugs are incredible life-saving inventions. Without them, millions of lives around the world would be lost. But, cancer drugs are also big business.

For example, ipilimumab (Yervoy) is an immunotherapy drug that saw significant success in clinical trials. In 2011 the U.S. Food and Drug Administration (FDA) approved the use of this drug for the treatment of metastatic melanoma. The drug ran $120,000 for four doses in 2012. More recent reports indicate that price may have increased to $150,000.

Ipilimumab was never expected to be a miracle drug. In fact, the drug's marketing claimed it could increase a patient's life by approximately four months compared to the next-best alternative. Despite this, ipilimumab sales surpassed $1 billion in 2016.

When it comes to the business side of cancer, business is booming.

The High Costs of Cancer

Cancer drugs are highly profitable. But, apart from making a profit, why are these life-saving drugs so expensive?

The answer to this has many parts but the key reasons include:

  • The cost of cancer drugs is influenced by the high cost of drug development.
  • Each cancer drug represents a mini-market monopoly.
  • The cost of cancer drugs is influenced by the lack of price checks on the pharmaceutical industry.

The Cost of Research and Development

According to leading experts, the high cost of cancer drugs comes from the research & development costs necessary to create the medications. Pharmaceutical companies claim it takes approximately $1 billion to bring a drug to market. Thus, these costs are often passed on to the consumers.

Cancer Drug Monopolies

A person with diabetes has multiple drug options to choose from. If you have pneumonia, there are many different antibiotics your doctor can prescribe to treat it. This competition is what keeps prices down for many drugs.

It is the lack of competition between cancer drugs that allows manufacturers to charge exorbitant prices. This is often referred to as a mini-monopoly. A cancer sufferer who is looking for the latest drug with the best survival rates doesn't have the luxury of shopping around. The choices are usually between 1 or 2 drugs, or nothing at all.

Pharmaceutical Companies Lack Cost Oversight

The United States has a free-market healthcare system. Unlike places such as Canada or the United Kingdom, the U.S. government does not have the power to negotiate drug prices with pharmaceutical companies on a national level. This lack of control leaves consumers more susceptible to the higher drug prices of Big Pharma.

How the Business Side of Cancer Treatment Keeps Costs High

Even in places where the costs of cancer treatments are more affordable, healthcare systems around the globe are struggling to pay for cancer drugs.

The global trend of soaring cancer drug prices has been going on for some time. A 2015 study by the U.S. National Bureau of Economic Research found the prices of cancer drugs have increased 10% every year between 1995 and 2013. There are no signs of this trend slowing down.

As we live longer and worldwide cancer rates rise, the demand for oncology drugs will continue to grow. This is the paradoxical relationship we now face. More people need more treatment which drives up demand. But, by increasing demand, we're also increasing the very cost of the treatment itself.

Reducing the Costs of Cancer Treatment

The financial price of cancer treatment can be overwhelming for most families. However, there are a few avenues for financial help:

  • There are nonprofit groups that offer financial assistance, such as the HealthWell Foundation and the Cancer Financial Assistance Coalition.
  • Some government agencies, faith-based organizations and local charities offer support to cancer patients and their families. Cancer Care has a great list of all the different organizations you can consider.
  • Ask your hospital for a payment plan before starting treatment. Make sure you get everything in writing when agreeing to treatments and the financial costs involved.

Cancer research has never been more exciting than it is today. From super-boosting the immune system to developing personalized approaches, research is changing the face of cancer treatment. But, it comes at a cost.

The good news is that more and more healthcare professionals, government agencies, hospitals, and even insurers are becoming aware of the ever-increasing costs of cancer care. These groups are starting to recognize the unsustainable burden it is placing on many families. We hope this increased awareness will bring with it a sustained and coordinated effort to address the problem and stem the rising price of cancer drugs.

Authored by Katy Moncivais, Ph.D.Medical Editor
Photo of Katy Moncivais, Ph.D.
Katy Moncivais holds a Ph.D. in Biomedical Engineering from The University of Texas at Austin. She’s an experienced Regenerative Medicine Consultant with a demonstrated history of working in the hospital & healthcare industry. Skilled in adult stem cells, medical devices, biomechanics, bacterial and mammalian cell culture, and regenerative medicine, she provides guidance on an array of topics affecting consumers. In her role at, Dr. Moncivais works alongside the writing and research staff to help deliver fact-based news stories to consumers. Her unique professional history alongside her rigorous educational background allows her to contribute to a variety of consumer-focused topics with a fresh perspective. In addition, Dr. Moncivais reviews portions of medically driven content to ensure scientific accuracy.
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