Respectful Insolence

Cure for cancer worth $50 trillion

Here’s an interesting tidbit that I came across:

A new study, to be published in a forthcoming issue of the Journal of Political Economy, calculates the prospective gains that could be obtained from further progress against major diseases. Kevin M. Murphy and Robert H. Topel, two University of Chicago researchers, estimate that even modest advancements against major diseases would have a significant impact � a 1 percent reduction in mortality from cancer has a value to Americans of nearly $500 billion. A cure for cancer would be worth about $50 trillion.
“We distinguish two types of health improvements � those that extend life and those that raise the quality of life,” explain the authors. “As the population grows, as incomes grow, and as the baby-boom generation approaches the primary ages of disease-related death, the social value of improvements in health will continue to rise.”

Many critiques of rising medical expenditures focus on life-extending procedures for persons near death. By breaking down net gains by age and gender, Murphy and Topel show that the value of increased longevity far exceeds rising medical expenditures overall. Gains in life expectancy over the last century were worth about $1.2 million per person to the current population, with the largest gains at birth and young age.

“An analysis of the value of health improvements is a first step toward evaluating the social returns to medical research and health-augmenting innovations,” write the authors. “Improvements in life expectancy raise willingness to pay for further health improvements by increasing the value of remaining life.”

I can’t comment on the methodology, but, if accurate, it gives an idea of just what a toll cancer takes not just in human suffering, but in the economy.

Comments

  1. #1 BronzeDog
    April 28, 2006

    Sounds like there’s plenty of reason for Big Bad Pharma to stop suppressing the cure. ;)

  2. #2 Hank Barnes
    April 28, 2006

    Orac,

    You are never gonna cure cancer, unless you properly understand the cause. That’s why you oughta be familiarizing yourself with Dr. Duesberg’s paper on aneuploidy in PNAS.

    Once mastered, then you will become rich and famous and get that nice house in Wrigleyville in Chicago, to which you aspire!

    Hank Barnes

    p.s. Follow the papers that cite to Duesberg to see which direction the research funding is going.

  3. #3 steve
    April 28, 2006

    The economic potential of advances like this always make me doubt the Malthusian predictions of perpetually increasing healthcare costs. Technology has the potential, like it has in every other industry, to be a deflationary force. Health is a huge and underappreciated economic factor. Malaria, for example, is the primary driver of 30 years of negative GDP growth for central Africa. ISTM that anything that alleviates the extremely expensive chemo-surgery-hospice routine for terminal cancer would generate huge potential savings for health care.

  4. #4 Luis
    April 28, 2006

    The idea of curing cancer needs to be replaced by the idea of preventing cancer. Prevention is the key.

    Please see the “Environmental and Occupational Causes of Cancer; A Review of Recent Scientific Literature” regarding the epidemic of cancer.

  5. #6 Gamer
    April 29, 2006

    A cure for cancer, along with AIDS, would be something the politicos would judge as too-important-to-be-left-to-the-market. As such, any pharma company would find themselves out any profit for all of their work. Hence, better to stick with ED and hair loss drugs, at least in terms of return on investment.

  6. #7 Darby
    May 1, 2006

    If you tried to truly calculate economic impact, it would have to include the drain on the federal treasury of increased time on Social Security – but would a cancer cure be the straw that forces a change in the retirement system? Some fundamental changes will have more effects than just keeping healthy folks in the work force and reducing medical costs (but will people cured of cancer eventually rack up heart disease costs?).

    I don’t want to say that the idea isn’t one worthy of discussion, but the numbers don’t really mean anything.

  7. #8 Laura
    May 3, 2006

    I have the actual study I found it on the Univeristy of Chicago Website. Anyways from my understanding what they are doing is calculating an economic value for each individual based on age and life expectancy. They posit that as life expectancy is increased the amount of money a person will spend on healthcare also increases (so the drug companies will still make money). It also says that the increased spending over a lifetime will also benefit the GNP. So finding a cure to cancer would extend life expectancy thus increase economic spending in all areas benefiting our economy overall. For other disorders like heart disease I am guessing innovation in that disease would increase the economic value of a life as well. As far as their method I never took economics nor am I an expert at calculus but that was the gist of it. So I don’t think it is a prediction of overall health costs coming down just the longer we live the more we will spend on health and other products.