Measuring the Gains from Medical Research : An Economic Approach

In 1998, health expenditures in the United States accounted for 12.9% of national income - the highest share of income devoted to health in the developed world. The United States also spends more on medical research than any other country - in 2000, the federal government decicated $18.4 billion to it, compared to only $3.7 billion for the entire European Union. In this book, leading health economists ask whether we are getting our money's worth. From an economic perspective, they find, the answer is a resounding "yes"; in fact considering the extraordinary value of improvements to health, we may even be spending "too little" on medical research. The evidence these papers present and the conclusions they reach are surprising and convincing: among them, that growth in longevity since 1950 has been as valuable as growth in all other forms of consumption combined; that medical advances producing 10% reductions in mortality from cancer and heart disease alone would add roughly $10 trillion (a year's GDP) to national wealth; and that the average new drug approved by the FDA yields benefits worth many times its costs of development. For anyone concerned about the cost and value of medical research, from policymakers to health care professionals and economists, this should be a landmark book.