An Economic Evaluation of the War on Cancer

47 Pages Posted: 15 Dec 2009 Last revised: 22 Jan 2018

See all articles by Eric C. Sun

Eric C. Sun

University of Chicago

Anupam B. Jena

Harvard University; National Bureau of Economic Research (NBER)

Darius N. Lakdawalla

University of Southern California - Schaeffer Center for Health Policy and Economics; RAND Corporation; National Bureau of Economic Research (NBER)

Carolina M. Reyes

Genentech, Inc. - San Francisco

Tomas Philipson

University of Chicago; National Bureau of Economic Research (NBER)

Dana P. Goldman

RAND Corporation; National Bureau of Economic Research (NBER)

Date Written: December 2009

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. These calculations suggest that from the patient's point of view, the rate of return to R&D investments against cancer has been substantial.

Suggested Citation

Sun, Eric C. and Jena, Anupam B. and Lakdawalla, Darius N. and Reyes, Carolina M. and Philipson, Tomas J. and Goldman, Dana P., An Economic Evaluation of the War on Cancer (December 2009). NBER Working Paper No. w15574. Available at SSRN: https://ssrn.com/abstract=1522363

Eric C. Sun (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Anupam B. Jena

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Darius N. Lakdawalla

University of Southern California - Schaeffer Center for Health Policy and Economics ( email )

635 Downey Way
Los Angeles, CA 90089-3333
United States

RAND Corporation ( email )

P.O. Box 2138
1700 Main Street
Santa Monica, CA 90407-2138
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Carolina M. Reyes

Genentech, Inc. - San Francisco ( email )

1 DNA Way
South San Francisco, CA 94080-4990
United States

Tomas J. Philipson

University of Chicago ( email )

Graduate School of Business
1101 East 58th Street
Chicago, 60637

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Dana P. Goldman

RAND Corporation ( email )

P.O. Box 2138
Santa Monica, CA 90407-2138
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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