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By Robert J. Hariri, MD, PhD, Chairman, Founder and Chief Scientific Officer of Celgene Cellular Therapeutics.
Medical innovation is the source of dramatic improvements in the quality and length of life and also creates enormous value for society and the economy at large. For example, in 1900, the average U.S. life expectancy was 49 years. Today, it is 79. It is estimated by 2040, U.S. life expectancy will reach 85 years. This is primarily the result of innovation in medicine and improvements to public health. New medical treatments accounted for 45 percent of the increase in U.S. life expectancy between 1960 and 1997 and for nearly three-quarters of the increase in U.S life expectancy in the first decade of the 21st century.
Living longer, healthier lives translates to economic health as well. Economists’ Kevin Murphy, PhD, and Robert Topel, PhD, calculate that life expectancy gains from 1970 to 2000 have added approximately $3.2 trillion per year to national wealth. They also estimate that a 1% reduction in cancer mortality would be worth $500 billion to the U.S. economy.
Unfortunately, there are a number of misconceptions about new medical treatments that are based on outdated information, or failing to consider medical innovation in perspective. One misconception is that prescription drug spending is growing rapidly. In fact, is it not — spending on prescription drugs actually declined by 3.5 percent per capita in the U.S. last year. And the small portion of health care spending accounted for by prescription drugs actually saves money by reducing the need for other medical services. Continue reading →