How cost-effective are new cancer drugs in the U.S.?

<b>Introduction</b>: More than 8 times as many new cancer drugs were approved during 2005-2015 as were approved during 1975-1985 (66 vs. 8). The average annual 2010-2014 growth rate of U.S. cancer drug expenditure was 7.6%. This has contributed to a lively debate about the value and cost-effectiveness of new cancer drugs.<b>Areas covered</b>: We assess the average cost-effectiveness in the U.S. in 2014 of new cancer drugs approved by the FDA during 2000-2014, by performing an original econometric investigation (rather than a literature review) of whether there were larger declines in premature mortality and hospitalization, and larger increases in survival, from the cancers that had larger increases in the number of drugs ever approved, controlling for the change in cancer incidence and mean age at time of diagnosis.<b>Expert opinion</b>: Cancer drugs approved during 2000-2014 are estimated to have reduced the number of potential years of life lost before age 75 in 2014 by 719,133. Cancer drugs approved during 1989-2005 are estimated to have reduced hospital cost in 2013 by $4.8 billion. Our baseline estimate of the cost per life-year gained in 2014 from cancer drugs approved during 2000-2014 is $7853.