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The Expanding Pharmaceutical Arsenal in the War on Cancer

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  • Frank R. Lichtenberg

Abstract

Only about one third of the approximately 80 drugs currently used to treat cancer had been approved when the war on cancer was declared in 1971. We assess the contribution of pharmaceutical innovation to the increase in cancer survival rates in a differences in differences' framework, by estimating models of cancer mortality rates using longitudinal, annual, cancer-site-level data based on records of 2.1 million people diagnosed with cancer during the period 1975-1995. We control for fixed cancer site effects, fixed year effects, incidence, stage distribution of diagnosed patients, mean age at diagnosis, and surgery and radiation treatment rates. Cancers for which the stock of drugs increased more rapidly tended to have greater increases in survival rates. The increase in the stock of drugs accounted for about 50-60% of the increase in age-adjusted survival rates in the first 6 years after diagnosis. New cancer drugs increased the life expectancy of people diagnosed with cancer by about one year from 1975 to 1995. The estimated cost to achieve the additional year of life per person diagnosed with cancer below $3000 is well below recent estimates of the value of a statistical life-year. Since the lifetime risk of being diagnosed with cancer is about 40%, the estimates imply that new cancer drugs accounted for 10.7% of the overall increase in U.S. life expectancy at birth.

Suggested Citation

  • Frank R. Lichtenberg, 2004. "The Expanding Pharmaceutical Arsenal in the War on Cancer," NBER Working Papers 10328, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:10328
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    1. Frank Lichtenberg, 2005. "The Impact of New Drug Launches on Longevity: Evidence from Longitudinal, Disease-Level Data from 52 Countries, 1982–2001," International Journal of Health Economics and Management, Springer, vol. 5(1), pages 47-73, January.
    2. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
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    1. Kyle, Margaret & Dubois, Pierre, 2016. "The Effects of Pharmaceutical Innovation on Cancer Mortality," CEPR Discussion Papers 11487, C.E.P.R. Discussion Papers.
    2. 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.
    3. Dolan, Paul & Metcalfe, Robert, 2012. "The relationship between innovation and subjective wellbeing," Research Policy, Elsevier, vol. 41(8), pages 1489-1498.
    4. Lionel Perrier & Magali Morelle & Nathalie Havet & Anthony Montella & Bertrand Favier & David Perol & Frédéric Gomez & Marie-Odile Carrere & Paul Rebattu, 2009. "The effect of health care expenditures on survival in locally advanced and metastatic Non Small Cell Lung Cancer," Working Papers 0903, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    5. Martin, Stephen & Rice, Nigel & Smith, Peter C., 2008. "Does health care spending improve health outcomes? Evidence from English programme budgeting data," Journal of Health Economics, Elsevier, vol. 27(4), pages 826-842, July.
    6. Fabio Pammolli & Massimo Riccaboni & Nicola Carmine Salerno, 2012. "I Farmaci Oncologici in Italia: innovazione e sostenibilità economica," Working Papers CERM 02-2012, Competitività, Regole, Mercati (CERM).
    7. Lichtenberg Frank R., 2008. "Pharmaceutical Innovation and U.S. Cancer Survival, 1992-2003: Evidence from Linked SEER-MEDSTAT Data," Forum for Health Economics & Policy, De Gruyter, vol. 10(1), pages 1-27, March.
    8. Dubois, Pierre & Kyle, Margaret, 2016. "The Effects of Pharmaceutical Innovation on Cancer Mortality Rates," TSE Working Papers 16-688, Toulouse School of Economics (TSE).
    9. Rosarin Sruamsiri & Dennis Ross-Degnan & Christine Y Lu & Nathorn Chaiyakunapruk & Anita K Wagner, 2015. "Policies and Programs to Facilitate Access to Targeted Cancer Therapies in Thailand," PLOS ONE, Public Library of Science, vol. 10(3), pages 1-17, March.
    10. Okunade, Albert A., 2004. "Concepts, measures, and models of technology and technical progress in medical care and health economics," The Quarterly Review of Economics and Finance, Elsevier, vol. 44(3), pages 363-368, July.

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    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J1 - Labor and Demographic Economics - - Demographic Economics

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