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The ever-escalating cost of cancer drugs

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Cancer isn't cheap.

The total cost of oncology drugs and supportive care medications surged 11.5 percent in 2015 to reach $107 billion globally, according to a new study from IMS Institute for Healthcare Informatics. The spending is based on invoice prices, the amount hospitals or pharmacies paid to distributors.

That pace may slow somewhat during the next several years, but it's still likely to grow faster than the rate of inflation. The cost of cancer drugs will rise between 7.5 percent to 10.5 percent annually through 2020, the IMS study said, at a time when the U.S. inflation rate is likely to remain below 2 percent.

The rapid rise in cancer drug costs reflects both good and bad news. The numbers are going up partly because of new treatments such as immunotherapy drugs that use the patient's immune system to attack cancer cells. At the same time, drugmakers are also hiking prices on existing drugs. The average annual cost of treatment for cancer patients rose 19 percent to $58,097 in 2014, the study found.

That's leading to questions over who'll pay for the increased costs, though patients increasingly bear the brunt, the study said.

"Most health systems are struggling to adapt and embrace this evolution -- including the regulatory systems, skilled professionals, diagnostic and treatment infrastructures, and financing mechanisms that are required to serve the needs of cancer patients around the world," said Murray Aitken, IMS Health senior vice president and executive director of the IMS Institute for Healthcare Informatics, in a statement.

The pipeline of new therapies and America's National Cancer Moonshot Initiative -- which aims to accelerate cancer research -- demand "urgent attention" to questions such as who ends up financing cancer treatments, he said.

Patients can find relief through coupons from drugmakers that lower the cost of prescriptions. The report found that the average coupon saves patients about $750 per prescription.

The issue of surging drug prices came to the forefront last year when Martin Shkreli, the CEO of Turing Pharmaceuticals, boosted the price of a six-decade old drug by 5,000 percent. While Shkreli became the poster boy for accusations of price-gouging, the practice has grown fairly common in the pharmaceutical industry.

The full episode of 60 Minutes from June 21, ... 44:05

About 20 brand-name prescription drugs have at least quadrupled in price since December 2014. Earlier this year, lawmakers investigating Turing and Valeant Pharmaceuticals (VRX) released thousands of pages of documents that suggest price hikes were designed to boost profits, rather than fund the development of new drugs.

As for cancer drugs, some of the new therapies carry mind-boggling prices. The U.S. Food and Drug Administration approved Daratumumab last year for treating multiple myeloma, a form of blood cancer.

The Johnson & Johnson (JNJ) medication was hailed as a "breakthrough" by biotech site FierceBiotech. But it doesn't come cheaply: The IMS study estimates Daratumumab's monthly cost at as much as $14,000 per patient. The typical cost for the first year of treatment is more than $135,000, according to FierceBiotech, which cited J&J.

As many cancer patients and their families know, it's difficult to say no to a costly drug treatment if it offers the hope of remission or a longer life. Unfortunately, cancer drug costs are also one of the top causes of personal bankruptcy.

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