New Wakely analysis of seven years of Medicare claims data (2018–2024) shows oncology spending is shaped by therapeutic innovation, adoption cycles, biosimilars, and benefit channel dynamics—not price inflation alone.
The paper introduces a new framework for forecasting oncology trend:
Oncology Trend = Price + Adoption + Duration + Benefit Channel + Replacement
This framework suggests that future oncology forecasting requires more than historical trend analysis. Organizations should also consider how innovation, treatment duration, biosimilars, and shifts between Medicare Part B and Part D influence future spending.
DOWNLOAD NOWOncology trend is not one trend. Medicare data shows why cancer spending rises, stabilizes, and shifts as new therapies become standards of care.
What is driving oncology spending in Medicare? A new Wakely white paper, Rethinking Oncology Trend: Evidence from Medicare Lung and Breast Cancer Spending, 2018–2024, finds that oncology costs are shaped less by steady price inflation and more by waves of therapeutic innovation, adoption, replacement, and shifts across Medicare benefit channels.
Using Medicare claims for lung and breast cancer, Wakely researchers identified two distinct models of oncology spending:
- Adoption model: Lung cancer spending accelerated rapidly as immune checkpoint inhibitors such as pembrolizumab (Keytruda) became the standard of care before stabilizing as adoption matured.
- Replacement model: Breast cancer spending remained comparatively stable because growth from antibody-drug conjugates (ADCs) was partially offset by biosimilar competition in trastuzumab-based therapies.
In this paper, you’ll learn
- Why oncology spending is driven by innovation cycles rather than inflation
- How immunotherapy changed lung cancer economics
- Why biosimilars stabilized breast cancer spending
- A practical framework for forecasting oncology costs
- What Medicare Advantage organizations should consider when modeling future oncology trend
Who should read this?
- Medicare Advantage organizations
- Healthcare actuaries
- Pharmacy and medical directors
- Oncology benefit managers
- Health economists
- Healthcare strategy leaders
Download the white paper to explore how therapeutic innovation is reshaping oncology spending—and what it means for forecasting future healthcare costs.
Key Findings
- Oncology spending is innovation-driven. Medicare oncology trend is influenced by when breakthrough therapies are adopted and how quickly they become standard of care.
- Lung cancer illustrates an adoption cycle. Spending increased rapidly as checkpoint inhibitors, especially pembrolizumab (Keytruda), became widely used, then stabilized as adoption matured.
- Breast cancer illustrates a replacement cycle. Newer therapies, including antibody-drug conjugates such as Enhertu and Trodelvy, grew while biosimilar competition reduced spending on trastuzumab-based therapies.
- Price is only one part of the equation. Adoption, duration, benefit channel, and replacement dynamics may be more important than annual unit cost changes.
- Part B and Part D must be evaluated together. Future oncology innovation is expected to span infused biologics and oral precision therapies, making integrated medical and pharmacy trend forecasting increasingly important.
Why This Matters for Medicare Advantage Plans
Traditional trend models may miss the timing and magnitude of oncology spending changes because they often rely heavily on historical price and utilization patterns. This analysis suggests that the largest changes in oncology spending may occur when treatment standards shift—not simply when existing therapies become more expensive.
For Medicare Advantage plans, this creates a strategic need to monitor the oncology pipeline, understand disease-specific adoption patterns, evaluate biosimilar and generic competition, and model how therapies may move across Medicare Part B and Part D. The future of oncology forecasting lies in anticipating therapeutic evolution—not just extrapolating past trend.
Frequently Asked Questions
- What is oncology trend?
Oncology trend refers to changes in cancer-related healthcare spending over time. In Medicare, oncology trend may be influenced by drug prices, therapy adoption, treatment duration, biosimilar competition, therapeutic replacement, and shifts between Medicare Part B and Part D.
- What drives oncology spending?
This analysis of Medicare 5% Limited Data Set (LDS) claims from 2018–2024 suggests oncology spending is driven less by annual drug price inflation and more by cycles of therapeutic innovation and adoption.
- Why did lung cancer spending increase?
Lung cancer spending rose rapidly as immune checkpoint inhibitors, particularly pembrolizumab (Keytruda), became the standard of care. Spending stabilized once adoption matured.
- Why has breast cancer spending remained relatively stable?
New antibody-drug conjugates increased spending, but much of that growth was offset by biosimilar competition in trastuzumab therapies.
- How should Medicare Advantage plans forecast oncology costs?
Historical trend alone is no longer sufficient. Forecasting should incorporate treatment adoption, duration of therapy, benefit channel, and therapeutic replacement.
