Policy Brief: The Impact of Recent White House Proposals on Cancer Research | June 2022

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In February 2022, the Biden Administration aimed to reignite the Cancer Moonshot through its proposed federal budget and stated that one of its objectives is to reduce cancer mortality by 50% over the next 25 years. Currently, there is already a very large amount of development activity for cancer treatments generated by the market and existing government policy. We find that about 49.2% of the total FDA pipeline is for new cancer treatments and 27.0% of new drug and biologics approvals are for cancer. Two of the Administration’s major policy proposals affect this large amount of cancer R&D activity and new drugs going forward. The first is a proposed increase of public funding for cancer research and the second are proposed price controls on cancer treatments. If the increase in cancer research for the fiscal year 2023 was permanent, it would amount to an annual increase of about $1.9 billion, or 3.4% of the current overall public and private cancer R&D spending of $56.8 billion. In contrast, we find that the latest publicly proposed price controls reduce overall annual cancer R&D spending by about $18.1 billion, or 31.8%. Thus, the reduction in total R&D spending from proposed price controls is more than 9.4 times as large as the increase from the proposed budgetary expansion. Regardless of the level of R&D assumed needed to generate a new drug, the same proportional effects would apply to new drugs so that 9.4 times as many new drugs are lost due to price controls as gained from the budget expansion. We therefore conclude that the overall effect of the Administration’s policies affecting cancer research is to greatly reduce, rather than raise, the large amount of development activity in cancer. This would ultimately raise, as opposed to lower, cancer mortality compared to the status quo and thus be counterproductive to the Cancer Moonshot objectives.

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Posted on

June 27, 2022

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