R.O.I. on Cancer Spending: Better Than We Think?

In SuperFreakonomics, we write about how chemotherapy is ineffective for treating many forms of cancer, and that it is almost always very expensive. (We also write about the potential conflict of interest when clinical oncologists profit from the administering of these drugs, but that’s another topic for another day.)

Furthermore, it is commonly thought that the nearly-40-year “war on cancer” has largely been a failure, since the age-adjusted mortality rate for cancer is essentially unchanged over that time.

But that’s a deceptive metric. Consider this:

Believe it or not, this flat mortality rate actually hides some good news. Over the same period, age-adjusted mortality from cardiovascular disease has plummeted, from nearly 600 people per 100,000 to well below 300. What does this mean? Many people who in previous generations would have died from heart disease are now living long enough to die from cancer instead.

So how are we to think about the tremendous cost associated with fighting cancer these days?

In a fascinating and important paper new working paper called “An Economic Evaluation of the War on Cancer” (abstract here; pdf here), Eric C. Sun and five co-authors try to measure the degree to which spending on cancer R&D has proved efficient and worthwhile:

For decades, the U.S. 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.

Perhaps even more interesting:

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.

This is good news, of course. It is also a reminder that if you hear a debate about health-care costs and it doesn’t heavily single out cancer costs, then the debate is radically incomplete.

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COMMENTS: 66

  1. Mark (Chicago) says:

    Craig (comment #1) identified the possible confounding effect of lead-time bias on the results of this study (i.e., earlier diagnosis appears to confer longer survival). From a brief read of the paper, it appears that the authors were aware of the potential effect of lead-time (pp 34-37) and investigated its effect on their data.

    Their conclusion, however (on pg 36), is suspect: “In sum, lead time bias likely has quantitatively modest impacts on our results; if anything, it causes us to understate the value of survival gains, and the share of survival accounted for by improved treatment.” Am I reading this correctly? Lead-time bias will cause us to OVERSTATE the value of survival gains by increasing the apparent length of survival.

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  2. serenescene says:

    In regarding Jonathan’s post above and other media quotes I’ve seen, I’ve often wonder where these “45,000 pts a year die because of no insurance”. If you have a serious illness like cancer and are truly indigent, most people qualify for Medicaid where most treatments are covered with no co-pays. I have seen middle to lower middle class people with serious illnesses having to spend down most of their money first before qualifying and unfortunately, that is the hard choice that people have to make for survival. Maybe we need better social workers and counselors to direct people to the help they need.

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  3. scatman says:

    After being diagnosed with leukemia in 1989 and surviving two other cancers since then, I am convinced that whatever we are spending it is worth it! Because if I was diagnosed in 1969, I am probably just a tombstone somewhere now.

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  4. Dan says:

    I would like to read about the root causes of cancer. While I believe aggressive treatment has improved people’s lives – this is anecdotal as I have several cancer – survivor friends who are all happy to still be around – the thing that interests me here is how the spending is accounted for on the social and data ledgers.

    What I mean is: As I understand it, spending on cancer R&D and treatment falls into the gross domestic product figures…which basically is a number that, if it goes up, things ought to be better because there is more economic activity.

    Shouldn’t spending like this be accounted for in a different way? Same with spending on, say, jail building? They both exist because of problems we haven’t really fixed…they are, in the big picture, “whack – a- mole” solutions, expensive band – aids.

    This can’t be easy or it would be getting done, is my guess. I have read about “happiness” index..but do not know if it has gone so far as to re-organize the correlation of economic activity to happiness or a “better” world

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  5. Patricia says:

    New research on marijuana and cancer suggests that we’ve been thwarting the War on Cancer by fighting the War on Pot.

    I draw your attention to the following peer-reviewed scientific research published in Cancer Prevention Research in August 2009:

    A population-based case-control study of marijuana use and head and neck squamous cell carcinoma.

    http://www.ncbi.nlm.nih.gov/pubmed/19638490

    The authors of this study have concluded that “moderate marijuana use is associated with reduced risk of HNSCC.”

    The reduction is significant — about 30-50%. And they mean “reduced” compared to people who don’t smoke at all.

    That’s the same kind of result that the pulmonary disease researchers led by Dr. Donald Tashkin at UCLA Medical School found in their population-based study on marijuana and lung cancer.

    Marijuana users, it turns out, exhibit the same or even slightly lower probability for developing lung cancers as people who don’t smoke anything at all.

    How could that possibly be true, one might ask in vehement protest, given the undisputed fact that the smoke from marijuana contains the same carcinogens found in all burning vegetable matter?

    Research over the last 35 years has revealed that the active ingredients of marijuana function as natural anti-carcinogens. The carcinogens in the smoke appear to be canceled out by the anti-carcinogenic behavior of the components that get you high.

    This is the direct opposite of the behavior researchers have noticed in nicotine. Nicotine appears to function as a cancer accelerant. The THC in marijuana appears to function as a cancer retardant.

    A review of anti-carcinogenic properties of THC and its chemical cousins in marijuana was published in Nature Reviews – Cancer in October 2003:

    CANNABINOIDS: POTENTIAL ANTICANCER AGENTS

    http://www.kubby.com/Guzman-Cancer-nrc1188.pdf

    American cancer researchers actually knew back when the War on Pot began that THC was able to kill lung and breast cancer cells in vitro.

    The government didn’t allow this research to be widely publicized because it might “send the wrong message about drugs to children.”

    Researchers have since then added another eight types of cancer cells to the list of cancers that can be killed or shrunk by THC and the other active ingredients found in marijuana.

    Given the bulk of this research, it’s entirely possible that .the War on Pot has been thwarting the War on Cancer for the last 35 years.

    But the mainstream media cannot cover this story, alas. It might send the wrong message about drugs to children.

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  6. GaryB says:

    Data, data, data…So the fact that the moneys invested in cardiac research have resulted in a 50% decrease in mortality while the moneys invested in cancer research have provided no such relief is used as to argue that cancer research really does have a good ROI? You statisticians are a funny bunch – use the same data to argue any and every side, while, as #1 points out, there are plenty of alternative explanations that make a lot more sense than those proposed.

    But I guess that’s what happens when people trained in math and economics, and not medicine, interpret clinical results (and it’s the same reason why the news media will blare the conclusions of lousy papers published in a journal like JAMA, when any scientist looking at the data will tell you the experimental design was flawed, the methodology was highly biased, and the paper is meaningless (as is often the case with pseudo-clinical studies in which the patients are not randomly selected and physicians are not blinded to who is receiving treatment vs. placebo, or for that matter when the “researcher-physician” is being paid by the drug company funding the study to get the results they want).

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  7. Alan Salzberg says:

    I second Craig’s comment concerning the bias of earlier detection: are we just detecting cancer earlier or are we actually prolonging life?

    Also, general life expectancy has increased 2 years between 1990 and 2000, and more than a year for 60 year-olds, whether or not they have cancer (see, for example, http://www.infoplease.com/ipa/A0005140.html ). This should also discount the calculated increase for cancer patients.

    Finally, willingness-to-pay data, in addition to being biased upward for wealthier people (wealthier people will say they are willing to pay more because they value each dollar less), is not the appropriate measure. We should instead look at the money spent as a limited resource and see if we can save more lives through some other measure–more comprehensive healthcare, prevention, etc.

    -Alan

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  8. Mike says:

    Assuming for the sake of argument we could “cure cancer” tomorrow so that in 2011 nobody would die of cancer. Calculate the impact that would have on Medicare and Social Security. I think you’ll see that the ROI on curing cancer would by tremendously negative.

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