|
1 December, 2009 - A recent working paper from the National Bureau of Economic Research compares the investment in cancer R&D since the beginning of the war on cancer with the value of the increases in survival that resulted between 1988 and 2000 and found that the gains for society and patients have far outweighed the costs, generating 23 million additional life-years and $1.9 trillion in value to society overall. [1]
Advances in treatment, rather than advances in detection, were primarily responsible for driving the value of survival gains. In fact, 97% of the total value of cancer gains is attributable to willingness to pay for treatment advances. The authors acknowledge that this may be surprising given that there have been significant advances in detection, but state that their “results suggest that the gains in treatment have been even larger.”
Drawing on data from SEER, the researchers found that life expectancy for cancer patients increased 3.9 years. In aggregate, patients have received “tremendous value” from these advances, with a total consumer surplus of about $1.9 trillion. The producer surplus was calculated to be $98-393 billion, based on sales and the range of profit margins for different types of companies. Combining the consumer surplus and the producer surplus, and subtracting out R&D spending, produces a total social surplus of $1.6 to 1.9 billion.
Approximately $300 billion has been spent on R&D since the early 1970s which means that private and federal investments have been fruitful. And “longevity increases far outweigh the costs of achieving them.”
Click here for the paper.
[1]E. C. Sun, et al. “An Economic Evaluation of the War on Cancer,” NBER Working Paper Series, Paper #15574, December 2009.
|
