As pipelines grow and precision therapies multiply, the economics of cancer care have become one of the most contested debates in modern healthcare. How do we value an extra six months of life, or a chance, however small, of remission? And as scientific breakthroughs accelerate, are payers and policymakers equipped to keep pace?

The Emotional and Financial Weight of Cancer

Cancer is both a personal and systemic crisis. For patients and their families, the diagnosis reshapes everything: work, relationships, identity, and the imagined future. But while the emotional toll is immeasurable, the financial burden is quantifiable, and rising sharply.¹ 

Across OECD countries, cancer increases annual health expenditure by EUR 449 billion, around 6% of all healthcare spending, which is more than the entire annual health budget of France (EUR 325 billion in 2024)^1,2

At the societal level, the impact of cancer extends beyond hospital walls and treatment centres. The disease reduces workforce productivity by the equivalent of 3.1 million full-time workers, leading to a loss of EUR 163 billion per year.¹

For individuals, the financial impact is personal and lasting. People living with cancer see an average reduction of EUR 2,955 in annual wages, approximately three weeks of income for an average worker.¹

Analyses of global medicine spending show that oncology represents one of the largest and fastest-growing areas of pharmaceutical expenditure worldwide, with spending increasingly concentrated in novel targeted and immunotherapy agents.³ 

This growing divide between scientific promise and financial sustainability sits at the heart of oncology’s moral dilemma. Every new therapy raises the same question: can we afford hope on this scale?

Why Oncology Drugs Are Expensive

Oncology drug pricing reflects the high scientific and commercial stakes involved in bringing new cancer therapies to patients. Only a small proportion of oncology candidates progress from early research through to approval, meaning the costs of many failed programmes are effectively carried by the few that reach the market.¹ At the same time, precision medicine increasingly targets narrower tumour subtypes, which can improve outcomes but reduces the size of eligible patient populations and raises the per-patient cost of development and manufacturing.¹ Clinical trials in oncology are also complex, often requiring biomarker stratification, adaptive trial designs, and crossover analyses, which increase trial duration, scale, and analytical demands.¹ 

Even after launch, many cancer medicines undergo continuous research to expand into additional indications, adding further ongoing R&D investment.¹ Meanwhile, patent expiries narrow the window in which companies can recover these costs, heightening commercial pressure to price high during the period of exclusivity.³ In short, oncology pricing is shaped by scientific complexity, high development risk, and the structural realities of financing innovation.

When Value Becomes Difficult to Measure

Even after approval, determining value is challenging. Many oncology medicines enter the market based on surrogate endpoints such as progression-free survival, but these do not always translate into longer or better life. Health technology assessments in Europe now report little or no demonstrated added benefit for most new oncology drugs, even as clinical innovation accelerates.³

Meanwhile, treatment pathways are becoming more dynamic. Immunotherapies and targeted agents shift earlier in the disease course, combine with other modalities, and expand across tumor types, making real-world care far more complex than the linear assumptions built into many economic models.³

Cost-effectiveness tools like QALYs offer structure, but they cannot capture the psychological and social weight of hope, identity, or time regained with loved ones. End-of-life modifiers try to account for compassion, yet they expose how value in oncology is not only clinical or economic, it is deeply human.

Rethinking Value: Policy and Global Lessons

The UK’s Cancer Drugs Fund (CDF) is a useful example. Originally established to provide access to cancer medicines that the NHS in England could not routinely fund because National Institute for Health and Care Excellence (NICE) judged them not to be cost-effective, the CDF has since shifted toward a managed access model.⁴ The CDF now allows earlier access while real-world data are collected to confirm value. 

Italy and the United States are both testing outcomes-based reimbursement, though with different levels of maturity and scale. Italy has implemented national managed entry agreements that link payment to real-world treatment response, particularly in oncology, although recent evidence suggests that while these schemes return some spending to the health system, the overall financial impact remains modest.⁵ 

In the United States, outcomes-based contracts are emerging primarily through private insurers and accountable care arrangements, with payers and manufacturers viewing them as a mechanism to manage uncertainty and demonstrate value.⁶ These models reflect a broader shift away from fee-for-service toward value-based reimbursement, where success depends on high-quality patient-level data and the ability to balance financial risk across stakeholders. Importantly, outcomes-based reimbursement is not just a contracting tool; it requires organisational and cultural change to align incentives, measure results, and embed value as a guiding principle in care delivery.⁷

Countries with growing healthcare investment are increasingly experimenting with tiered or differential pricing models as a way to balance access and affordability. The approach involves adjusting medicine prices according to a country’s capacity to pay, with the aim of expanding access in lower-income markets while allowing manufacturers to retain commercial incentives in wealthier ones. However, these models are not without risk: if poorly designed, they can entrench monopoly power, limit the use of generics and compulsory licensing, and ultimately still leave the poorest populations priced out of treatment. Ensuring that tiered pricing does not become a mechanism that protects corporate interests at the expense of equitable access remains a key concern.⁸ 

What these models share is a shift towards adaptive reimbursement: recognising that static frameworks cannot keep pace with the speed of oncology innovation.

The Future of Oncology Economics

The future lies in integration. Value frameworks must incorporate not only clinical outcomes but the ethical and social dimensions of care. Meanwhile, the pressure is increasing. Population ageing alone is expected to increase per-person cancer spending by 67% by 2050, even before accounting for new medicines.¹

Yet, there is a counterbalance. Around 40% of cancers are preventable, and stronger action on risk factors could reduce premature cancer deaths by 12% and healthcare spending by 9% across OECD countries.¹

At its core, this is a conversation about the world we want to build: one where innovation serves everyone, or one where hope is contingent on the ability to pay.

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References

1. OECD (2024). Tackling the Impact of Cancer on Health, the Economy and Society, OECD Health Policy Studies. OECD Publishing, Paris, https://doi.org/10.1787/85e7c3ba-en. 
2. Eurostat. Healthcare Expenditure Statistics - Overview. Available at: https://ec.europa.eu/eurostat/statistics-explained/index.php?title=Healthcare_expenditure_statistics_-_overview 
3. IQVIA Institute for Human Data Science (2025). Global Oncology Trends 2025: Adopting New Therapies as Modalities Shift and Expenditures Rise. Available from www.iqviainstitute.org
4. NHS England. Cancer Drugs Fund. Available at: https://www.england.nhs.uk/cancer/cdf/
5. Trotta F, Guerrizio MA, Di Filippo A, Cangini A. Financial Outcomes of Managed Entry Agreements for Pharmaceuticals in Italy. JAMA Health Forum. 2023;4(12):e234611. Published 2023 Dec 1. doi:10.1001/jamahealthforum.2023.4611
6. Nazareth T, Ko JJ, Sasane R, et al. Outcomes-Based Contracting Experience: Research Findings from U.S. and European Stakeholders. J Manag Care Spec Pharm. 2017;23(10):1018-1026. doi:10.18553/jmcp.2017.23.10.1018
7. de Silva Etges APB, Liu HH, Jones P, Polanczyk CA. Value-based Reimbursement as a Mechanism to Achieve Social and Financial Impact in the Healthcare System. J Health Econ Outcomes Res. 2023;10(2):100-103. Published 2023 Oct 31. doi:10.36469/001c.89151
8. Williams OD, Ooms G, Hill PS. Cautionary Notes on a Global Tiered Pricing Framework for Medicines. Am J Public Health. 2015;105(7):1290-1293. doi:10.2105/AJPH.2015.302554

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