The economic returns from the nation's investment in medical research are exceptional, says a major report issued by Funding First, a public policy initiative of the Mary Woodard Lasker Charitable Trust.
The findings described in Exceptional Returns: The Economic Value of America's Investment in Medical Research provide an entirely new way to understand and value the enormous contribution of medical research to the American standard of living. Using accepted techniques of modern economics, nine leading economists were able to estimate a dollar value for increases in Americans' life expectancy. As a result it is now possible to compare the economic value of extended life to traditional components measured by economists when reporting on this country's Gross Domestic Product (GDP).
These economists found:
- Increases in life expectancy in just the decades of the 1970's and 1980's were worth $57 trillion to Americans - a figure six times larger than the entire output of tangible goods and services in 1998. The gains associated with the prevention and treatment of cardiovascular disease alone totaled $31 trillion during this period.
- Improvements in health account for almost one-half of the actual gain in American living standards in the past 50 years.
- The likely returns from medical research are so extraordinarily high that the payoff from any plausible "portfolio" of investments in research would be enormous. Medical research that reduced deaths from cancer by just one-fifth would be worth $10 trillion to Americans - double the national debt, and infinitely larger than the nation's current level of investment in various aspects of cancer research. Indeed, the value of these "payoffs" is steadily increasing, given the nation's demographics and overall economic prosperity.
Exceptional Returns is based on a set of six research papers authored by nine of America's most distinguished economists from Yale, Harvard, Stanford, Columbia and the University of Chicago. The report discusses the consensus that these economists reached - working independently of each other - that medical research has produced exceptionally high returns in the past, and that a sustained investment by the nation is likely to deliver similarly exceptional returns in the future.
The primary methodology developed in the course of this research looked at the relationship between the "extended healthy lives" of Americans attributable, in part, to advances in medical research, using standard methodologies for assessing the value of each additional year of life. The papers also analyzed the gaps in current mechanisms for measuring "national income" and other economic indicators, and suggest ways to better capture the economic gains attributable to extended healthy life.
Conventional approaches to valuing medical research have focused on two standard measures: the "economic impact" in terms of the significant number of jobs created both directly and indirectly as a result of public and private investment in this sector, and the substantial economic and social "savings" that result from preventing or treating a particular disease, e.g., polio.
Dr. Leon Rosenberg, President of Funding First, commented on the report by saying that, "When it comes to the health of our loved ones or ourselves, we all recognize that medical research has given us longer, more productive lives. We regard this outcome as invaluable. But this report answers - for the first time - the question, What is the true economic value of our national investment in medical research? Those of us directly engaged in the field of medical research were surprised and humbled at the dramatic answer provided by these distinguished economists."
Hugo Sonnenschein, an economist and President of the University of Chicago who participated in the Funding First project, noted that, "While it is more conventional to think of medical research in traditional investment terms - $45 billion annually invested, hundreds of thousands of skilled jobs at companies, universities, and academic medical centers across the nation, and pharmaceutical industry sales alone nearing $100 billion annually - this report documents the extraordinary value of 'extended healthy life' to our society and national economy."
The well-documented increase in life expectancy from 47 years in 1900 to 77 years by the end of the 20th century is attributable to discoveries related to medical research, and corresponding advances in public health, medical diagnoses, health education and prevention, and treatment of chronic and acute diseases. The additional thirty years of healthy life has greatly improved the economic well-being of generations of Americans, and contributes to both past and future growth.
The forthcoming book - and the Exceptional Returns report summarizing its findings - were commissioned by the Funding First initiative of the Mary Woodard Lasker Charitable Trust. Its sister philanthropy, the Albert & Mary Lasker Foundation, annually presents the Albert Lasker Medical Research Awards, the nation's most prestigious awards for basic and clinical medical research. Mary Lasker was one of America's foremost advocates for medical research and public health, and a philanthropist who played a central role in the expansion of the National Institutes of Health over a period of more than fifty years.
Vidyya readers can access the full text of Exceptional Returns: The Economic Value of America's Investment in Medical Research in Adobe PDF format (642 KB).