Duke 2008 | ASHE | Equity and Efficiency in Health and Healthcare

Although cancer continues to be a leading cause of death, the last three decades have witnessed tremendous advancement in the technologies used to diagnose and treat the disease. Despite the abundant research documenting overall gains in cancer survival, limited evidence has been brought to bear on how the economic value of these gains compares against the costs of improved technology, and to what degree the social value of technological improvements has been divided between patients and firms. Using data on improvements in cancer survival between 1990 and 2000, we find the aggregate social value of gains in cancer survival during this timer period to be $1.6-$1.9 trillion, with the majority of these gains being driven by improvements in treatment, as opposed to diagnostic, technologies. Health care providers and pharmaceutical companies were able to appropriate 6-19% of this total, with the rest accruing to patients. Moreover, the share of value flowing to consumers has been increasing rapidly over time. These results suggest that recent advances in cancer technology have been worthwhile, and that patients, not firms, have been the primary beneficiaries of these new technologies.