Imagine you bought a new house and want to plant trees to shade its lawn. You have several options. You could plant a fast-growing variety that will start to provide shade sooner, or you could plant a hardier, but slower-growing variety that will be slower to produce shade. A lot of factors can affect your decision. How long do you plan to live in the house? Does the city offer incentives to plant the hardier variety? This decision is similar to the one faced by those conducting research and development (R&D) for therapeutics. Do they choose to invest in short-term projects that can be commercialized sooner, or do they invest in long-term projects that potentially have a greater impact for consumers?
NIH Common Fund-supported researcher, Dr. Heidi Williams, and her colleagues, found that private firms tend to invest in short-term R&D projects. In looking at privately-funded R&D in cancer treatments from 1973 to 2011, the researchers found significantly more investment in R&D for late-stage cancer drugs rather than drugs to treat early-stage cancer or for cancer prevention. Late-stage cancer treatments are generally shorter-term investments. They move more quickly through clinical trials partially because cancer trials often measure a drug’s effectiveness in terms of improved survival. Improved survival for late-stage cancer patients may be measured in months, while for early-stage cancer patients, it may be measured in years.
Dr. Williams explored several ways to make long-term R&D investments more attractive. One way might be to change patents to provide longer protections for therapeutics that take longer to get to market. Two other options involve the investment of public funds. Much like a city offering financial incentives to plant a hardy, slow-growing tree, public funds could be used to directly encourage private R&D investments in long-term projects. Dr. Williams also explored the option of using earlier end-points in clinical trials that indicate a drug is safe and effective without waiting for survival data. Public investment to develop earlier clinical end-points in cardiovascular trials almost certainly played an important role in bringing drugs like statins to the market faster. Similar investments in developing earlier clinical end-points for cancer or other clinical trials might pay-off in the long run. This would be much like a city making well-developed saplings of the hardy trees available for purchase, so that you would not have to wait as long for them to grow and produce shade.
Do Firms Underinvest in Long-Term Research? Evidence from Cancer Clinical Trials. Budish Eric, Benjamin N. Roin, and Heidi Williams. American Economic Review. July 2015. 105(7): 2044-85. Please note that access to the full-text article may require institutional access.
Read a brief article about Dr. Williams’ research in the New York Times: “Why Preventing Cancer Is Not the Priority in Drug Development.”
On August 27 and 28, 2015, the National Institutes of Health (NIH) Health Economics Common Fund Program and Office of Disease Prevention (ODP) sponsored a workshop on the Economics of Prevention. The goals of the workshop were to discuss the state of the research field, and identify gaps and opportunities to be addressed in future research.
On February 25, 2015, the National Institutes of Health (NIH) Health Economics Common Fund Program convened a workshop to engage a range of stakeholders in discussions about how NIH-funded research can enhance the role of personalized medicine in improving the efficiency and effectiveness of health care.
The goal of the workshop was to facilitate dialogue among researchers, stakeholders, and NIH staff to (1) inform stakeholders of ongoing NIH-funded research initiatives and (2) help researchers focus on questions of critical value to stakeholders.
Senior Policy Researcher Dr. Chapin White met with the Health Economics working group to discuss his research into "Designing Health Plan Networks to Steer Patients to Higher-value Providers." A summary of his remarks can be found here.
Study results from Health Economics-funded researcher Jody Sindelar suggest that for low-income individuals, a greater emphasis on the financial costs of smoking could be more effective to motivate quitting than health-related messages. Read the article summary...
Noted economist Martin F. Gaynor met with the Health Economics Working Group to discuss his thoughts about the current state of health care markets and areas for future research. A summary of his remarks can be found here.
The Health Economics Working Group partnered with the editors of the Forum for Health Economics & Policy to publish a special issue on the economics of personalized health care and prevention. The issue features an introduction by Working Group members Gregory Bloss (NIAAA) and John G. Haaga (NIA) and revised versions of the commissioned papers from five teleconference participants: Anirban Basu, Dana Goldman, Donald Kenkel, David Meltzer, and Kathryn Phillips.
The special issue can be accessed at: http://www.degruyter.com/view/j/fhep.2013.16.issue-2/issue-files/fhep.2013.16.issue-2.xml
In 2012 the Health Economics Working Group held teleconferences with invited experts to discuss the state of the science concerning the determinants and consequences of personalized health care and to discuss medical technologies.
View the executive summaries here:
The Health Economics Program of the Common Fund announced a contract to IMPAQ International, LLC and its subcontractors to design and create a State Health Practice Database for Research (SHPDR). This contract, supported after a competitive review of proposals, will meet the need for state-level data for research on a range of issues affecting health outcomes, in an environment in which health care delivery systems, health care financing, and health care technology are all changing rapidly. The resource resulting from this contract will be a core data set with numeric and categorical variables on health practices that can be used with statistical software, and can be linked with existing health and economic data for hypothesis-driven research. The need for this resource was discussed by experts at a 2010 NIH meeting and elaborated in responses from the scientific community to a Request for Information. Working Group members also consulted with Office of the Assistant Secretary of Planning and Evaluation and other HHS agencies to avoid duplication of efforts.
Read the meeting report...