Cancer Institute NSW Monograph The Health Returns on Investment in Cancer Research May 2008 Parisa Glass, M Lynne Pezzullo, Henry G Cutler, Katie A Yates, Elizabeth A Tracey, Heidi Welberry, Angelina Catanzariti and James F Bishop In collaboration with Access Economics Pty Ltd. Cancer Institute NSW catalogue number: RM-2008-3 National Library of Australia Cataloguing–in–Publication data: The Health Returns on Investment in Cancer Research State Health Publication number SHPN (CI) 080046 ISBN 978-1-74187-191-3 Key words: Cancer, Health Economics, Research, ROI, Wellbeing gains. Suggested citation: Glass P, Pezzullo ML, Cutler H, Yates K, Tracey E, Welberry H, Catanzariti A, Bishop J. The Health Returns on Investment in Cancer Research. Cancer Institute NSW, May 2008. Published by the Cancer Institute NSW, May 2008. Cancer Institute NSW Level 1, Biomedical Building Australian Technology Park EVELEIGH NSW 2015 PO Box 41 Alexandria NSW 1435 Telephone (02) 8374 5600 Facsimile (02) 8374 5700 E–mail [email protected] Homepage www.cancerinstitute.org.au Publications www.cancerinstitute.org.au/publications Copyright © Cancer Institute NSW May 2008. This work is copyright. It may be reproduced in whole or part for study or training purposes subject to the inclusion of acknowledgement of the source. It may not be reproduced for commercial usage or sale. Reproduction for purposes other than those indicated above requires written permission from the Cancer Institute NSW. Contents List of tables and fi gures 2 4. Estimating expenditure on cancer R&D in Australia, New South Wales Foreword from the Minister 6 and the world 41 4.1 Expenditure on health and cancer R&D Chief Cancer Offi cer’s report 7 in Australia 41 Executive Summary 8 4.1.1 Methodology 41 4.1.2 Findings: health R&D in Australia 44 1. Introduction 15 4.1.3 Findings: health R&D in NSW 51 2. Gains in wellbeing from cancer averted 17 4.1.4 Findings: cancer R&D in Australia 54 2.1 Methods for quantifying gains in wellbeing 17 4.1.5 Findings: cancer R&D in NSW 60 2.1.1 Valuing life and health 17 4.2 International perspectives 63 2.1.2 DALYs and QALYs 18 4.2.1 International comparisons of expenditure on health R&D 63 2.2 Perspective: Cancer in Australia and NSW 19 4.2.2 International comparisons of expenditure on cancer R&D 64 2.2.1 The burden of cancer in Australia in 2003 19 5. Returns on investment (ROI) in cancer R&D 68 2.2.2 Cancer in NSW in 2005 20 5.1 Introduction 68 2.3 Cancer-related gains in wellbeing – averted years of life lost 20 5.2 Key parameters 68 2.3.1 Years of life lost due to cancer 21 5.2.1 Cancer R&D share of total gains in wellbeing 68 2.3.2 YLDs – years of healthy life lost due to disability 29 5.2.2 Australia’s share of global R&D 69 2.3.3 DALYs averted = wellbeing gains 30 5.3 Methodology 72 2.3.4 Value of gains in wellbeing 32 5.4 Returns on investment 73 3. Projecting the health gains in cancer 5.4.1 NSW 73 over the coming decade 33 5.4.2 Australia 73 3.1 Is the future the same as the past? 33 5.4.3 Discussion 73 3.2 Projections 34 5.5 Sensitivity analysis 74 3.2.1 Methodology 34 5.5.1 Results 76 3.2.2 Results 36 3.2.3 Analysis 39 1 The Health Returns on Investment in Cancer Research 6. Case studies 78 6.1 Screening and adjuvant breast cancer treatment – CISNet 78 6.1.1 CISNet study and fi ndings 79 6.1.2 Estimated gains for Australia and NSW 80 6.1.3 Discussion – comparability of Australia and the US 82 6.2 Herceptin 84 6.2.1 Clinical trial fi ndings 84 6.2.2 Herceptin treatment, costs and wellbeing gain in Australia 85 6.3 Chemoprevention of breast cancer 86 6.3.1 Data and methods 86 6.3.2 Markov Modelling 86 6.3.3 Cost effectiveness and net wellbeing gains 89 Glossary of acronyms 90 References 91 2 List of tables and fi gures Tables Table 4.1 Australian health R&D (SEO), by sector, Cancer DALYs averted from 1980 to 2005 9 1992–93 to 2004–05 46 Sensitivity Analysis results 14 Table 4.2 Australian health R&D (RFCD), by sector, Table 2.1 1992–93 to 2004–05 47 Cancer burden (YLDs, YLLs and DALYs) by type, Australia, 2003 20 Table 4.3 Australian health R&D (SEO) by sector and Table 2.2 source of funds, 2004–05 48 Cancer YLLs 1980–2005: actual, counterfactual and losses averted, NSW 23 Table 4.4 Australian health R&D (RFCD) by sector and Table 2.3 source of funds, 2004–05 49 Cancer YLLs 1980–2005: actual, counterfactual and losses averted, Australia 24 Table 4.5 Australian health R&D (SEO) by sector and Table 2.4 type of activity, 2004–05 50 Cancer YLLs, YLDs and DALYs averted from 1980 to 2005, NSW 31 Table 4.6 Australian health R&D (RFCD) by sector and Table 2.5 type of activity, 2004–05 50 Cancer YLLs, YLDs and DALYs averted from 1980 to 2005, Australia 31 Table 4.7 NSW health R&D (SEO), by sector, Table 2.6 1992–93 to 2004–05 52 AIHW cancer burden estimated, DALYs due to cancer per 1,000 people 31 Table 4.8 NSW health R&D (RFCD), by sector, Table 2.7 1992–93 to 2004-05 53 Cancer wellbeing gains, 1980–2005, NSW and Australia ($ billion) 32 Table 4.9 Australian cancer R&D (SEO), by sector, Table 3.1 1992–93 to 2004–05 56 Cancer mortality rates, 2005 and historical change, NSW 35 Table 4.10 Australian cancer R&D (SEO), by sector, Table 3.2 % of health total 57 Cancer mortality rates, 2005 and historical change, NSW 35 Table 4.11 Australian cancer R&D (RFCD), by sector, Table 3.3 1992–93 to 2004–05 57 Projected YLLs, YLDs and DALYs averted from 2006 to 2016, NSW 37 Table 4.12 Australian cancer R&D (RFCD), by sector, Table 3.4 % of health total 58 Projected YLLs, YLDs and DALYs averted from 2006 to 2016, Australia 37 Table 4.13 Australian cancer R&D (SEO) by sector and Table 3.5 type of activity, 2004–05 58 Cancer wellbeing gains, 2006–2016 projections, NSW ($ billion) 38 Table 4.14 Australian cancer R&D (RFCD) by sector and Table 3.6 type of activity, 2004–05 59 Cancer wellbeing gains, 2006–2016 projections, Australia ($ billion) 38 3 The Health Returns on Investment in Cancer Research Table 4.15 Table 6.6 Australian cancer R&D (SEO) by sector and Summary of key parameters – relative risks 88 source of funds, 2004–05 59 Table 6.7 Table 4.16 ICERs ($/QALY) – summary 2005 89 Australian cancer R&D (RFCD) by sector and source of funds, 2004–05 59 Table 6.8 Costs, benefi ts and wellbeing gains, raloxifene Table 4.17 chemoprevention, Australia and NSW 89 NSW cancer R&D (SEO) by sector, 1992–93 to 2004–05 61 Figures Table 4.18 NSW cancer R&D (RFCD) by sector, Figure E1 1992–93 to 2004–05 62 Cancer wellbeing gains, 1980 to 2005 (averted YLLs, YLDs and DALYs), NSW 10 Table 4.19 Health-related R&D expenditure, OECD Figure E2 12–countr y sectoral comparison 64 Cancer wellbeing gains, 1980 to 2005 (averted YLLs, YLDs and DALYs), Australia 10 Table 4.20 Non-commercial cancer research expenditure, Figure E3 2004 (US$ million) 65 Projected YLLs – three scenarios, Australia, 1980-2016 11 Table 5.1 Number of publications on cancer both by Figure E4 Australian researchers and in the world, NSW non-commercial cancer R&D, 1999–2006 71 1992-93 to 2004-05 13 Table 5.2 Figure E5 NSW share of Australian publications on cancer, Non-commercial cancer research expenditure, according to SCI-SSCI and Medline, 1999–2006 71 2004 (A$ per capita) 13 Table 5.3 Figure 2.1 Results from the simulation 77 Cancer burden (DALYs) by type, gender and YLLs/YLDs (% total) 19 Table 6.1 Reductions in breast cancer mortality rates in Figure 2.2 2000 attributed to adjuvant treatments and Cancer mortality rates, change 1980 to 2005, screening, CISNet 80 by age and gender, NSW 21 Table 6.2 Figure 2.3 Modelled deaths averted due to screening Cancer mortality rates, change 1980 to 2005, and adjuvant therapy, NSW, 2005 81 by age and gender, Australia 22 Table 6.3 Figure 2.4 Modelled deaths averted due to screening Cancer YLLs 1980–2005: actual, counterfactual and adjuvant therapy, Australia, 2004 81 and losses averted, NSW, males 23 Table 6.4 Figure 2.5 Modelled YLLs, YLDs and DALYs averted, Cancer YLLs 1980–2005: actual, counterfactual NSW, 2005 81 and losses averted, NSW, females 24 Table 6.5 Figure 2.6 Modelled YLLs, YLDs and DALYs averted, Cancer YLLs 1980–2005: actual, counterfactual Australia, 2004 81 and losses averted, Australia, males 25 4 Figure 2.7 Figure 4.4 Cancer YLLs 1980–2005: actual, counterfactual Australian non-commercial health R&D (SEO) and losses averted, Australia, females 25 by type of activity, 2004–05 49 Figure 2.8 Figure 4.5 Mortality rates by age and gender, NSW non-commercial health R&D, 1980 to 2005, NSW 26 1992–93 to 2004–05 51 Figure 2.9 Figure 4.6 Mortality rates by age and gender, Australian non-commercial cancer R&D, 1980 to 2005, Australia 27 1992–93 to 2004–05 54 Figure 2.10 Figure 4.7 Female mortality rates in four age cohorts, Australian non-commercial cancer R&D (SEO) 1980–2005, Australia and NSW 28 by sector, 2004–05 55 Figure 2.11 Figure 4.8 Averted YLLs as a share of counterfactual YLLs NSW non-commercial cancer R&D, (%) in four age cohorts, females 28 1992–93 to 2004–05 60 Figure 2.12 Figure 4.9 Annual growth in cancer new cases and Non-commercial cancer research expenditure, population, NSW and Australia 30 2002–03 and 2004 65 Figure 2.13 Figure 4.10 Cancer wellbeing gains, 1980 to 2005 Non-commercial cancer research (averted YLLs, YLDs & DALYs), NSW 31 expenditure, 2004 (A$ million) 66 Figure 2.14 Figure 4.11 Cancer wellbeing gains, 1980 to 2005 Non-commercial cancer research expenditure, (averted YLLs, YLDs & DALYs), Australia 32 2004 (% of GDP) 66 Figure 3.1 Figure 4.12 Projected YLLs – three scenarios, NSW 36 Non-commercial cancer research