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An economic evaluation of the war on cancer

Author

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  • Lakdawalla, Darius N.
  • Sun, Eric C.
  • Jena, Anupam B.
  • Reyes, Carolina M.
  • Goldman, Dana P.
  • Philipson, Tomas J.

Abstract

For decades, the US public and private sectors have committed substantial resources towards cancer research, but the societal payoff has not been well-understood. We quantify the value of recent gains in cancer survival, and analyze the distribution of value among various stakeholders. Between 1988 and 2000, life expectancy for cancer patients increased by roughly four years, and the average willingness-to-pay for these survival gains was roughly $322,000. Improvements in cancer survival during this period created 23 million additional life-years and roughly $1.9 trillion of additional social value, implying that the average life-year was worth approximately $82,000 to its recipient. Health care providers and pharmaceutical companies appropriated 5-19% of this total, with the rest accruing to patients. The share of value flowing to patients has been rising over time. In terms of economic rates of return, R&D investments against cancer have been a success, particularly from the patient's point of view.

Suggested Citation

  • Lakdawalla, Darius N. & Sun, Eric C. & Jena, Anupam B. & Reyes, Carolina M. & Goldman, Dana P. & Philipson, Tomas J., 2010. "An economic evaluation of the war on cancer," Journal of Health Economics, Elsevier, vol. 29(3), pages 333-346, May.
  • Handle: RePEc:eee:jhecon:v:29:y:2010:i:3:p:333-346
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    Cited by:

    1. Dubois, Pierre & Kyle, Margaret K, 2016. "The Effects of Pharmaceutical Innovation on Cancer Mortality," CEPR Discussion Papers 11487, C.E.P.R. Discussion Papers.
    2. repec:spr:pharme:v:35:y:2017:i:7:d:10.1007_s40273-017-0503-7 is not listed on IDEAS
    3. Rheinberger, Christoph M. & Herrera-Araujo, Daniel & Hammitt, James K., 2016. "The value of disease prevention vs treatment," Journal of Health Economics, Elsevier, vol. 50(C), pages 247-255.
    4. Rodrigo Camejo & Clare McGrath & Marisa Miraldo & Frans Rutten, 2014. "Distribution of health-related social surplus in pharmaceuticals: an estimation of consumer and producer surplus in the management of high blood lipids and COPD," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 15(4), pages 439-445, May.
    5. Bloom, David E. & Chen, Simiao & Kuhn, Michael & McGovern, Mark & Oxley, Les T. & Prettner, Klaus, 2017. "The economic burden of chronic diseases: Estimates and projections for China, Japan, and South Korea," Hohenheim Discussion Papers in Business, Economics and Social Sciences 09-2017, University of Hohenheim, Faculty of Business, Economics and Social Sciences.
    6. Rejon-Parrilla, J.C & Hernandez-Villafuerte, K. & Shah, K. & Mestre-Ferrandiz, J. & Garrison, L. & Towse, A., 2014. "The Expanding Value Footprint of Oncology Treatments," Consulting Reports 000050, Office of Health Economics.
    7. Amitabh Chandra & Jonathan Skinner, 2012. "Technology Growth and Expenditure Growth in Health Care," Journal of Economic Literature, American Economic Association, vol. 50(3), pages 645-680, September.
    8. Hammitt, James K. & Herrera-Araujo, Daniel & Rheinberger, Christoph, 2016. "The Value of Cancer Prevention vs Treatment," TSE Working Papers 16-628, Toulouse School of Economics (TSE).
    9. Adam Leive & Thomas Stratmann, 2015. "Do national cancer screening guidelines reduce mortality?," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(4), pages 1075-1095, October.
    10. Amitabh Chandra, 2011. "Comment on "The Value of Progress against Cancer in the Elderly"," NBER Chapters,in: Investigations in the Economics of Aging, pages 233-236 National Bureau of Economic Research, Inc.
    11. Eric Budish & Benjamin N. Roin & Heidi Williams, 2015. "Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials," American Economic Review, American Economic Association, vol. 105(7), pages 2044-2085, July.
    12. Eric Budish & Benjamin Roin & Heidi Williams, 2013. "Do fixed patent terms distort innovation? Evidence from cancer clinical trials," Discussion Papers 13-001, Stanford Institute for Economic Policy Research.
    13. Dubois, Pierre & Kyle, Margaret, 2016. "The Effects of Pharmaceutical Innovation on Cancer Mortality Rates," TSE Working Papers 16-688, Toulouse School of Economics (TSE).

    More about this item

    Keywords

    Cancer Economic gains Life expectancy;

    JEL classification:

    • I1 - Health, Education, and Welfare - - Health
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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