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

1. The Economic Value of Medical Research
Jon Sussex
Office of Health Economics
NHS Confederation Annual Conference
and Exhibition 2013
Liverpool • 5-7 June 2013

2. • Medical research
• Health gains
• Economic returns
Agenda

3. UK Medical Research Funding Sources 2009/10
£billion
Health Departments 0.7
MRC & Other Research Councils 0.8
Funding Councils etc. 1.1
Total Public Sector 2.6
Charities 0.9
Private Industry 4.5
TOTAL (est.) 8.0
Source: UKCRC (2012)

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 gains
Exceptional returns to UK
public medical research

5. UK health gains from cardiovascular research
Source: Medical Research: What’s it Worth?

6. Total QALYs gained in UK from cardiovascular
interventions 1985-2005
0
1000
2000
3000
Types of medical intervention
Quitting
smoking
2ary prevention
of CHD post-MI
1ary prevention
of CVD
Chronic stable
angina treatment
Source: Medical Research: What’s it Worth?

7. Getting health gains sooner
The key factors reported as driving different
uptake patterns in secondary care
Source: DH/ABPI (2007)
The key factors reported as driving
different uptake patterns in primary care

8. Economic gains include spillovers
Source: Medical Research: What’s it Worth?

9. Shorter lags to R&D impacts
Source: Toole (2007)
An extra $1 of
public research:
Additional
private R&D
After how many
years?
Basic research $8.38 8
Clinical research $2.35 3
• Only evidence is from the US
• But UK pharma industry R&D is the same size relative to GDP as
in the US

10. Medical research is especially productive
for the UK economy
Relative to alternative uses of
the same resources:
• Higher paid jobs
• Higher return on investment
• Terms of trade benefits
• As well as spillovers

11. 1. Medical research and development boosts the economy as
well as health gain
2. It uses economic resources to better effect than most other
activities
3. The NHS can contribute to the SUPPLY of research and
development in the UK
4. And by being a DEMANDING CUSTOMER for medical
research and development
Conclusions

12. References
DH-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: Office
of Health Economics.
Toole, A. (2007) Does public scientific research complement private investment in
research and development in the pharmaceutical industry? Journal of Law and
Economics. 50(1) 81–104.
UKCRC (UK Clinical Research Collaboration). (2012) UK Health Research Analysis
2009/10. London: UK Clinical Research Collaboration.

13. To enquire about additional information and analyses, please
contact Jon Sussex at jsussex@ohe.org
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