Measuring the contribution of biomedical research to the production of health

Technologically induced increases in health care costs have compelled policy-makers to ask hard budgetary questions about the value of biomedical research. Specific examples can be given to illustrate the returns from biomedical research on a disease-by-disease basis, but this information does not give a comprehensive enough perspective. The purpose of this paper is to estimate the historical contribution that biomedical research has made to the prolongation of life. Using a production function approach and various statistical models of the lag process, we estimate 23–48% of the decline in mortality over the 1930–1978 period can be attributed to biomedical research efforts. The lower bound estimate translates into a net return of $83 billion for our society, illustrating the past wisdom of investment in biomedical research. In recent years, however, the year-to-year decline in mortality rates has slowed, suggesting that mortality may not be an adequate output measure to justify expansion in research expenditures. Without alternative output measures, policy-makers and planners will have a difficult time in evaluating research benefits and making decisions on the allocation of future resources.