The Chemotherapy Drug Industry

The National Institutes of Health estimates direct medical costs for cancer was $158 billion in 2020 in the US.   That includes spending on drugs.  One industry analyst put the size of the global chemotherapy market at $137 billion in 2020.  The analysis group EvaluatePharma estimated total oncology sales in 2018 is $123.8 billion (out of a total prescription medicine market of $864 billion).  Deloitte estimates sales of pharmaceuticals exceeded $900 billion in 2020.

A report released in 2016 found total spending worldwide on cancer drugs at $107 billion.  A disproportionate amount – 45 percent – is spent in the United States.  One credible estimate predicts a more than 50 percent rise in chemotherapy demand by 2040.  Zion Market Research projects a global market size of $169.9 billion by 2026.

EvaluatePharma in 2019 projected an annual growth rate in oncology sales of 11.4% to a total of $237 billion by 2024. They project oncology will have “close to 20 percent market share of pharma sales by 2024.”

drug development

Automation in the clinical laboratory. Pipetting robot laboratory. Medicine robotics. NGS DNA diagnostics. Research and science background

There is a wide range in the cost of individual chemotherapy treatment, as drugs differ significantly in their cost and necessary duration of treatment. The cost of eight weeks of chemotherapy can range from $100 to $30,000 or more. While the drugs can be the largest part of the cost, there are other expenses like hospital charges, travel, cosmetic items, or loss of work.

 

Growing Industry

Both the number of drug products designed to fight cancer and the money spent on these product grow every year.

A large part of this growth is due to biopharmaceuticals (biologics) – first introduced in the 1990s and now a large part of the oncology treatment arsenal.  Other technologies such as cancer vaccines and antibody delivery systems have the potential to take off.

The chemotherapy market contains hundreds of competitors, ranging from large brand name marketers to small niche generic producers.  Nature reported in 2022 that over 700 companies worldwide were conducting clinical trials on cancer medications.

The pharmaceutical industry as a whole is a high operating leverage proposition. Research costs are high at over $100 billion per year worldwide. Only 1 in 5000 compounds reaches the market. Research costs are higher as a share of the revenues than for any other industry. Once the patent on a new medicine expires, prices drop, so the industry depends on new product introductions. Failures in development put companies at risk; the industry is rife with mergers and acquisitions.

Prescriptions for oral chemotherapy drugs can be filled through a number of channels – community pharmacies, mail order pharmacies, specialty pharmacies, hospital pharmacies, as part of competitive acquisition programs (CAP) through a physician’s office, or through office-based pharmacies, which are legal in a number of states . In the US, cancer doctors are allowed to profit from the sale of chemotherapy drugs, which is not the case with other drugs.

See page on drug development value chain.

Different roles

Most new molecular entities (NMEs) are developed and taken through the approval process by the smaller companies, and single-product pharmaceutical companies are not uncommon.

However, most drugs on the market under patent protection are owned or licensed by only a few companies.  https://www.ncbi.nlm.nih.gov/pubmed/24680947

This is one big difference between Big Pharma and small drug companies.

New Products

The industry lives on new products which, especially while under patent protection, can be sold for high prices.  In the past decade pharmaceutical companies have increased their output of cancer drugs:

Time period

Number new drugs
approved by FDA

Before 1960

7

1960s

10

1970s

11

1980s

13

1990s

30

2000-2009

35

2010-2019

103

2020

16

2021

12

Informally, the term “blockbuster drug” is employed to describe medications that exceed $1 billion in sales. Despite talk about billion-dollar medicines, most new drugs are not expected to earn that much.  McKinsey Consulting predicts the peak sales in any one year for most of these drugs will be below $500 million.

 

Major Players in the Global Pharmaceutical Industry

Be careful when you see numbers about the size of the chemotherapy market.  It is important to find out what the boundaries of the market they are talking about are.  Are they talking about the US market or the global market?  Are they including immunotherapy agents?  Callaix includes immunotherapy in our list of chemotherapy agents, but not everyone does.  Are they including hormones and hormone suppressants used to treat cancer?  Are they talking about development costs or sales?

InsiderMonkey reports the largest pharmaceutical companies in terms of revenue were:

  1. Pfizer – $51 billion
  2. Roche – $59 billion
  3. Novartis – $47 billion
  4. Merck – $46 billion
  5. Johnson and Johnson – $42.2 billion (in pharmaceuticals)
  6. GlaxoSmithKline –  $43.5 billion
  7. AbbVie – $33 billion
  8. Sanofi – $27 billion
  9. Bristol-Myers Squid – $26 billion
  10. AstraZeneca – $23 billion
  11. Amgen – $22.85 billion

Note that for diversified corporations, only the pharmaceutical portion was used for this list.  Otherwise, Johnson and Johnson would be bigger than Pfizer, for instance.

GlaxoSmithKline

Revenues: $43.76 billion 

Stock exchange: London

Leading oncology drug products: tositumomab, belantamab, denosumab, niraparib

 

BristolMyers Squib

Revenues: $42.8 billion

Stock exchange: New York

Leading oncology drug products:

 

Novartis

Revenues: 48.7 billion

Stock exchange: Swiss Stock Exchange

Leading oncology drug products: crizanlizumab, everolimus, ofatumumab, panobinostat, letrozole, imatinib mesylate, deferasirox, ruxolitinib, ribociclib, tisagenlecleucel-T, trametinib, alpelisib, aldesleukin, eltrombopag, midostaurin, octreotide acetate, capmatinib, dabrafenib, nilotinib, lapatinib, pazopanib, zoledronic acid, ceritinib

 

Bayer

Revenues: $41.48 billion

Stock exchange: Frankfurt

Leading oncology drug products:

 

AstraZeneca 

Revenues: $25.28 billion

Stock exchange: London

Leading oncology drug products: anastrozole, acalabrutinib, bicalutamide, trastuzumab, fulvestrant, durvalumab, gefitinib, selumetinib, olaparib, osimertinib, goserelin acetate

 

Johnson and Johnson (Janssen)

Revenues:  $82.6 billion

Stock exchange: New York

Leading oncology drug products: erdafitinib, daratumumab, apalutamide, ibrutinib, amivantamab-vmjw, trabectedin, abiraterone

 

Merck

Revenues:  $50.0 billion

Stock exchange: New York

Leading oncology drug products: pembrolizumab, trastuzumab-dttb, temozolomide, vorinostat

 

AbbVie

Revenues:  $45.8 billion

Stock exchange: New York

Leading oncology drug products: Venetoclax, Ibrutinib

 

BristolMyersSquib

Revenues:  $42.5 billion

Stock exchange: New York

Leading oncology drug products:

 

Pfizer

Revenues:  $41.9 billion

Stock exchange: New York

Leading oncology drug products:  exemestane, avelumab, inotuzumab, bosutinib, encorafenib, irinotecan, glasdegib, epirubicin, palbociclib, estramustine, idarubicin, axitinib, lorlatinib, binimetinib, gemtuzumab, filgrastim-aafi, pegfilgrastim-apgf, rituximab-pvvr, sunitinib, talazoparib, temsirolimus, crizotinib, trastuzumab-qyyp, dacomitinib, bevacizumab-bvzr

 

Amgen

Revenues:  $25.4 billion

Stock exchange: New York

Leading oncology drug products: blinatumomab, talimogene laherparepvec, carfilzomib, panitumumab

 

Gilead

Revenues:  $24.7 billion

Stock exchange: New York

Leading oncology drug products: brexucabtagene, sacituzumab govitecan-hziy, axicabtagene ciloleucel, idelalisib

 

Eli Lilly / Loxo

Revenues:  $24.5 billion

Stock exchange: New York

Leading oncology drug products: pemetrexed, ramucirumab, cetuximab, gemcitabine, necitumumab, selpercatinib, abemaciclib

 

Biogen

Revenues:  $13.4 billion

Stock exchange: New York

Leading oncology drug products: none

 

According to the website Biospace, the biggest-selling cancer drugs in 2021 were:

Pembrolizumab – Keytruda – $17.18 billion

Lenalidomide – Revlimib – $12.8 billion in sales

Nivolumab – Opdivo – $7.52 billion

Ibrutinib – Imbruvica – $5.4 billion

Palbociclib – Ibrance – $5.43 billion

Pertuzumab – Perjeta – $4.28 billion

Atezolizumab – Tecentriq – $3.58 billion

Bevacizumab – Avastin – $3.3 billion

Trastuzumab – Herceptin – $2.91 billion

Rituximab – Rituxan – $2.77 billion

Daratumumab and hyaluronidase-fihj – Daralex – $1.64 billion

Enzalutamide – Xtandi – $1.64 billion

Abiraterone – Zytiga – $1.18 billion

Venetoclax – Venclexta – $934 million

Obinutuzumab – Gazyva – $773 million

Ruxolitinib – Jakafi – $591 million

 

 

Secrecy

Why is the chemotherapy industry so secretive?   Why is it so hard to find information on usage of chemo agents?

It’s easy to find how many people take arthritis or heartburn or anti-anxiety pills.  A search of the web tells you how many patients take cholesterol medicines and blood pressure medicines.  You can find breakdowns by drug class and estimates of the numbers of prescriptions for each medicine.

Not so with chemotherapy.  It is still enshrouded in secrecy the way other industries were before the internet.  Who benefits from this secrecy? The drug companies and the oncology industry.

We hear much hype about the new drugs, the ones still under patent protection.  We don’t hear so much about the older drugs that pharmaceutical companies don’t make as much money on.

 

Related: the war on cancer.