Economic Value of Medical Research


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OHE's Jon Sussex discussed the wider health and economics benefits of medical research at the June 2013 NHS Confederation annual conference.

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Economic Value of Medical Research

  1. 1. The Economic Value of Medical ResearchJon SussexOffice of Health EconomicsNHS Confederation Annual Conferenceand Exhibition 2013Liverpool • 5-7 June 2013
  2. 2. • Medical research• Health gains• Economic returnsAgenda
  3. 3. UK Medical Research Funding Sources 2009/10£billionHealth Departments 0.7MRC & Other Research Councils 0.8Funding Councils etc. 1.1Total Public Sector 2.6Charities 0.9Private Industry 4.5TOTAL (est.) 8.0Source: UKCRC (2012)
  4. 4. • 39% rate of return (real, annual)to cardiovascular research• 9% from health gains• 30% from economic gains• 37% rate of return (real, annual)to mental health research• 7% from health gains• 30% from economic gainsExceptional returns to UKpublic medical research
  5. 5. UK health gains from cardiovascular researchSource: Medical Research: What’s it Worth?
  6. 6. Total QALYs gained in UK from cardiovascularinterventions 1985-20050100020003000Types of medical interventionQuittingsmoking2ary preventionof CHD post-MI1ary preventionof CVDChronic stableangina treatmentSource: Medical Research: What’s it Worth?
  7. 7. Getting health gains soonerThe key factors reported as driving differentuptake patterns in secondary careSource: DH/ABPI (2007)The key factors reported as drivingdifferent uptake patterns in primary care
  8. 8. Economic gains include spilloversSource: Medical Research: What’s it Worth?
  9. 9. Shorter lags to R&D impactsSource: Toole (2007)An extra $1 ofpublic research:Additionalprivate R&DAfter how manyyears?Basic research $8.38 8Clinical research $2.35 3• Only evidence is from the US• But UK pharma industry R&D is the same size relative to GDP asin the US
  10. 10. Medical research is especially productivefor the UK economyRelative to alternative uses ofthe same resources:• Higher paid jobs• Higher return on investment• Terms of trade benefits• As well as spillovers
  11. 11. 1. Medical research and development boosts the economy aswell as health gain2. It uses economic resources to better effect than most otheractivities3. The NHS can contribute to the SUPPLY of research anddevelopment in the UK4. And by being a DEMANDING CUSTOMER for medicalresearch and developmentConclusions
  12. 12. ReferencesDH-ABPI. (2007) Ministerial Industry Strategy Group: long term leadership strategy.London: Department of Health.HERG, OHE and RAND Europe. (2008) Medical research: what’s it worth? London: Officeof Health Economics.Toole, A. (2007) Does public scientific research complement private investment inresearch and development in the pharmaceutical industry? Journal of Law andEconomics. 50(1) 81–104.UKCRC (UK Clinical Research Collaboration). (2012) UK Health Research Analysis2009/10. London: UK Clinical Research Collaboration.
  13. 13. To enquire about additional information and analyses, pleasecontact Jon Sussex at jsussex@ohe.orgTo keep up with the latest news and research, subscribe to our blog,OHE NewsFollow us on Twitter @OHENews, LinkedIn and SlideShareOffice of Health Economics (OHE)Southside, 7th Floor105 Victoria StreetLondon SW1E 6QTUnited Kingdom+44 20 7747 8850www.ohe.orgOHE’s publications may be downloaded free of charge for registered users of itswebsite.©2013 OHE