The impact of immunotherapy on reductions in cancer mortality: Evidence from Medicare.

Immunotherapy is a breakthrough innovation in cancer care, but it is also among the most expensive treatments, with costs exceeding $150,000 per patient. We study the introduction of immune checkpoint inhibitors (ICIs), the most widely used class of immunotherapy drugs. In 2022, ICIs accounted for 44% of the $17.5 billion Medicare Part B cancer drug spending. We focus on metastatic melanoma, the first approved indication for ICIs. While overall cancer mortality rates declined since the 1990s, melanoma mortality rates increased through the early 2010s. Following the first ICI approvals in 2011 and 2014, melanoma mortality declined sharply. Using traditional Medicare claims, we estimate the impact of the introduction of ICIs on healthcare utilization, costs, and 1-year survival for patients with metastatic melanoma, relative to metastatic colorectal cancer (CRC), where ICIs were not approved until 2017. Variation in approval timing allows us to isolate the effect of ICIs from broader cancer care trends. We find that ICIs reduced 1-year mortality by 6.2%. Since about 1 in 5 metastatic melanoma patients received ICIs, this implies a 28.0% reduction among treated patients. The introduction of ICIs also reduced chemotherapy and radiation use, but increased Medicare spending by 59.3% or about 260% among ICI-treated patients. Accounting for life expectancy gains beyond one year, the benefits of ICIs for melanoma patients appear comparable, or potentially even greater, than the substantial added Medicare costs. Nonetheless, ICI use remains relatively low given large survival benefits and few alternative treatments, suggesting that costs and other barriers limit patient access.