Key insights
- A new study suggests a cure for cancer could generate a massive economic return, potentially $41,684 per US household annually. The authors argue for increased investment in cancer research, highlighting that the long-term benefits of pharmaceutical innovation outweigh short-term savings from price controls. This could indirectly benefit the healthcare and pharmaceutical sectors, but the impact on US equities is marginal.
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If you're looking for a return on investment that pays out to everyone rather than just the investor, few might be better than cancer research.
That's according to a paper published this week by researchers at the University of Chicago and the National Bureau of Economic Research showing that the economic value of the lives saved from a cure for cancer would amount to $41,684 per U.S. household per year, or $197 trillion total over 35 years.
To reach that figure, the researchers estimated how many years cancer cuts short American lives, then multiplied by $580,000, the value the federal government assigns to a year of human life when writing environmental regulations. They also adjusted for inflation and other factors.
By valuing human life rather than counting only dollars changing hands, the economists concluded cancer research would deliver an enormous return on investment.
"For a breast cancer patient who dies at age 45 rather than living to age 75, this implies a loss of 30 life years," the researchers, led by economist Tomas J. Philipson, wrote. "Using U.S. federal government valuations, this implies a loss in value of 30 x $580,000, totaling $17.4 million."
If the calculations are even close to right, the U.S. should be spending far more on cancer research, purely on economic grounds. Assuming a cancer-curing research program would cost $500 billion to $900 billion, the return would be anywhere between 570% and 1,024%, they found. For comparison, the federal government budgeted $7.35 billion for fiscal year 2026 on cancer research through the National Cancer Institute.
"Given the significant economic value of reducing cancer mortality, the long-run returns to pharmaceutical innovation dwarf any short-term savings from attempts to hold down prices through price controls or other means," the researchers wrote. "The trillions in potential benefits from eliminating cancer mortality mean that investing in cancer innovation is among the highest-return investments society could make."
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