The cost of diagnosing and treating cancer in the UK is expected to increase from £9.4 billon in 2010 to £15.3 billion by 2021, a rise of £5.9 billion or 62%, according to a new report.

This will mean that the average cost of treating someone diagnosed with cancer will rise to almost £40,000 by 2021, from around £30,000 last year, says the study, which is published by private health firm Bupa.

The authors have calculated cancer-related spending over the next 10 years in the public, private and voluntary sector in the UK, and they find that the biggest impact will be felt by the NHS, with a £5.2 billion increase (65%), followed by the private sector, where spending will be up £531 million (also 65%) and then the voluntary sector, with an increase of £131 million, or 22%.

Demand for cancer diagnosis and treatment will rise 2% annually over the next 10 years, while demand for new technologies and treatments, which added just under 3.7% per year to real-terms costs during 2003/4 to 2010/11, is expected to continue at this same rate of increase over the next decade, according to the report.

The authors identify three approaches which they believe could help address this challenge. First, they say, we need to find new ways to address the costs of tests and treatments for cancer, with better national planning for availability of new drugs and technologies, the integration of companion tests for personalised medicines into care pathways, and finding new ways to bring cancer drugs to market.

Pending the planned introduction of value-based pricing, "the government should be open to industry risk-sharing approaches and acceptance of responsibility for outcomes by pharmaceutical companies," they suggest.

Second, the authors say we need to change how and where we treat cancer patients and survivors. Out-of-hospital care needs to be made a standard choice for patients, where clinically appropriate, and they must be enabled to manage their follow-up appointments.

And third, it must be made easier for people to navigate their cancer treatment options, enabling them to transfer between public and private facilities more easily.

The increase in the overall cost of cancer diagnosis and treatment is partly due to the UK's ageing population, which is predicted to lead to a 20% growth in cancer rates by 2021. "Ironically, the reasons behind this dramatic increase in costs are a cause for celebration," writes Professor Karol Sikora, consultant oncologist at Hammersmith Hospital and medical director of Cancer Partners UK, in a foreword to the report.

"Fortunately, when cancer does strike, we now have powerful new technologies available to gradually turn cancer into a chronic, controllable disease like diabetes. However, the rising numbers and the advent of innovation come with a hefty price tag," he adds.

There are now 700 targeted drugs in the global clinical trial pipeline, many with companion diagnostics to guide patient selection, notes Prof Sikora. But, he adds, over the last six months, the average monthly cost of each of eight cancer drugs approved in the US was over $10,000. 

"If this trend continues, it could bankrupt the healthcare systems of rich countries and never be affordable by the poor," he warns.

In a statement, the Department of Health has dismissed the Bupa report's findings. 

"We do not recognise these figures," it says. "Over the past five years, expenditure on cancer has grown no faster than costs for the NHS as a whole. This has been achieved despite increasing numbers and the introduction of new drugs, and is a good example of how the NHS is working more efficiently as part of plans to save up to £20 billion by 2015."