In an insidiuously chilling editorial in the NEJM, the intersection of micro- and macro-economics of oncolgy is explained. Oncology through the 20th century consisted of using available poisons to hurt cancer cells (bad guys) quicker than other body cells (good guys). Given the obvious potential to seriously harm patients, only few physicians did so. This anachronistic process led to these few physicians 'selling' chemotherapy medicines out of their office.
Towards the end of the 20th century, this vending became incredibly profitable as cancer medications became more expensive (and as people stopped dying of communicable diseases with better public health, vaccines and antibiotics). But as the rate of medical costs soar, medical payers (CMS and private insurers) have begun focusing on decreasing oncology care costs. And so we now end up with a non-sustainable system.
But what's the actual problem? Greedy pharmaceuticals - not really, as they're not humanitarians, they're capitalists. The governmentn - well, for anyone to the left of Rick Perry...perhaps. But what exactly is the government supposed to do - pay more for medicines when it doesn't need to?
No, I'd say the fault lies in the fundamental pay scheme of modern American medicine which emphasizes pay-for-service rather than pay-for-outcome. Here's a model of how it would work, per the NEJM article:
One solution is adopting clinical pathways for which practices are paid disease-management fees that are not based on chemotherapy sales. For instance, one large oncology group has developed care pathways specifying preferred drug combinations and sequences — for example, allowing only a few first-line, mostly generic regimens for patients with non–small-cell lung cancer, as compared with the 16 possible drugs and many more combinations included in National Comprehensive Cancer Network pathways. This approach has been shown to result in equal or better survival, less use of chemotherapy near the end of life, and 35% lower costs than usual care.