It is projected the United States will spend $245 billion on cancer care in 2030, a 35% increase over the amount spent in 2015. Innovative treatments including targeted therapies — complex, precision medicine that attack specific cancer molecules — have driven much of this spending trend while also significantly improving outcomes. But there are legitimate questions about whether some of this spending has been less effective or even wasteful.

A new Schaeffer Center study analyzes the link between targeted therapies and outcomes among Medicare patients newly diagnosed with breast cancer, finding targeted therapies used in advanced-stage cancers improved mortality, whereas patients with early-stage cancers had little improvement in mortality from targeted drugs. The study was published in the May 2021 issue of Health Affairs.

“Up until now, there hasn’t been any real-world studies that have looked at the relationship between targeted therapy use, spending and outcomes,” said Alice Chen, senior author on the study and a senior fellow at the USC Schaeffer Center for Health Policy & Economics. “Given the growing prominence targeted therapies have, it is an important question to look at.” Chen is also an associate professor at the USC Price School of Public Policy.

Targeted therapies accounted for about 90% of new active substance approvals in oncology between 2011 and 2018. By March 2021 there were 27 targeted therapies approved for breast cancer.

Spending on targeted therapies for advanced-stage breast cancer increased nineteen-fold

Chen and her colleagues analyzed 15 years of data, focusing on women ages 65 and older who were diagnosed with malignant breast cancer. They looked at spending on targeted therapies, nontargeted therapies and other cancer care.

They found per-patient spending on targeted therapies in the first year after a patient’s diagnosis increased markedly over the study period for all patients, driving up total spending on cancer care. For women with advanced-stage breast cancer, spending on targeted therapies increased from just over $1,000 in the year 2000 to close to $19,000 in 2015. For patients with early-stage cancer, spending increased from $82 to $3,289 over the study period.

Targeted therapies for advanced-stage cancer improve outcomes

The relationship between spending on new, targeted therapies and cancer outcomes using real-world data is important to analyze because it allows us to estimate a return on spending and value. Breast cancer is one of the more costly cancers in the U.S. It is also one of the first cancers for which targeted therapies have been used pervasively.

The researchers found that while national spending on targeted therapies increased, higher first-year spending on targeted therapies for patients with advanced-stage cancer was associated with significantly lower mortality two to four years after diagnosis.

Furthermore, the results suggest that only targeted therapies generated meaningful survival gains for patients with advanced-stage breast cancer. Spending on non-targeted therapies and other types of cancer care was not associated with improved outcomes. In addition, spending on targeted therapies for early-stage cancer patients did not improve mortality.

“Many ask whether spending on targeted therapies for advanced-stage breast cancer is worth it,” said Meng Li, nonresident fellow at the USC Schaeffer Center and coauthor of the study. “We found that the evidence suggests it is.” Li is an assistant professor in health services research at the University of Texas MD Anderson Cancer Center.

According to the analysis, the cost per quality-adjusted life year gained is between $60,000 and $96,000 — an estimate that is within commonly cited thresholds for being cost effective.

More research is needed to understand the value of specific types of cancer care across the full trajectory, conclude the authors. Nevertheless, these findings highlight the importance of differentiating spending by type of therapy used when evaluating spending on complex diseases.

Dana Goldman, director of the USC Schaeffer Center and distinguished professor of public policy, pharmacy and economics at USC co-authored this study. Funding for this research was provided by the Leonard D. Schaeffer Center for Health Policy & Economics and the National Institutes of Health under award numbers 2P30AG043073, P30AG024968, and P01AG033559.

— Stephanie Hedt