One exciting area of cancer research today is immunotherapy. Researchers are increasingly figuring out what makes cancer cells into cancer cells. Normal cells are genetically programmed to replicate at a certain rate and then to die; with cancer cells, this programming goes wrong. Normal cells are vulnerable to the body's immune system; cancer cells have defenses that deflect the attention of immune cells or block their action.
For decades, researchers tried a vaccine approach, meaning they sensitized the patient's immune system against the type of cancer involved. This has not worked too well, as the immune system attacked the cancer but wasn't able to kill it. Approaches that involved boosting the immune systems also have issues, because an overactive immune system itself causes serious diseases. Currently there are attempts to block the cancer cells' defense against the immune system, and these seem promising. One of these new immunotherapy drugs is on the market (for melanoma) and s few others are close.
There isn't going to be a single "cure" for cancer because there are so many types and subtypes of cancer, e.g. there are dozen types of breast cancer, in each one the cancer cells use a different method to defeat the immune system and medical treatments, and cancer cells mutate in the patient so that a treatment may initially work but then stop working, and a pt may ultimately have a mix of different cancers.
Much progress has been made even so, in some cancers more than in others. For example, there is a blood cancer called chronic myelogenous leukemia (CML), and it used to be that once you got it, on average you might live a year or so, only about 10% of its were alive 8 years later. A drug called Gleevec was developed 10 years ago, that extended average survival to over a decade, about 80-90% of pts now live over 8 years and the typical CML pt has a good chance of dying of old age.
Gleevec: the Breakthrough in Cancer Treatment | Learn Science at Scitable
Breast cancer is another example, in the 1950s the typical woman would only live a couple of years after diagnosis, today many pts are effectively cured and many others live a long time. Ten year survival rate (what pct of women live ten years post-diagnosis) has gone from about 20% to over 70%.
http://www.medscape.com/viewarticle/729858
As for the economic incentive to develop better treatments, there are enormous rewards. Gleevec sells something like $4-5 billion/yr and has brought over $30 billion dollars to the pharma company that developed it. It costs about $70K/year to be on Gleevec, but not for much longer, as the drug is going generic soon.
Suppose a company develops a one-time "cure" for a particular cancer that is otherwise a rapid death sentence - instead of taking a drug for years, you get one course of treatment and then go on to live a normal life - what would the economics of that be? Pretty powerful. The cost of that treatment would be huge and probably charged on a sliding scale - far more for a young person, less for an elderly person, scaled to the decades of life that the treatment would save. After all, there are already drugs that cost $250K/yr today. I think we'd see the first million-dollar drug.
One aspect of economic incentives that is not working well is early detection. Cancers are easier to treat and the pt's chances of survival are much better if the cancer is found early, but no-one gets hundreds of thousands of dollars' financial reward for finding a pt's cancer early. Similarly, diagnostic screening tests are not big business, the companies developing them don't make much money.