Cure For Cancer? Why the Private Sector Has a Better Shot Than Government

Private industry probably will not find the cure for cancer, but its priorities and diversity may give it a better chance than the government has. An important advantage for the private sector is that private companies have far greater access to government-sponsored research than the government does to private research. Secrecy helps a private company beat a competitor to the market. The government has no competitors. Government funding of basic research also lessens the potential disadvantages of making funding decisions based on predicted utility.

The need to bring a product to market also gives private companies a powerful incentive that the public sector, which may fund research of specific aspects of a potential treatment but generally does not fund the development of a treatment from start to finish, does not have. To understand  just how powerful this incentive is, consider that spending on cancer is supposed to rise from $125 billion in 2010 to somewhere between $158 billion to $207 billion.

 This is in part  because political pressure makes it difficult to deny coverage of expensive new drugs of marginal value. One new medication for pancreatic cancer costs $3,500 and increases life expectancy by 12 days. Some argue, however, that because of the large number of drugs in development, today’s high prices are, “the biggest bubble you’ve ever seen.”

In theory, the government is in a better position to take the risks that might be required to achieve a dramatic breakthrough, but a review of cancer grants made by the National Cancer Institute (NCI) shows little willingness to take risks. Dr. Richard Klausner, former director of  NCI  said, “There is no conversation that I have ever had about the grant system that doesn’t have an incredible sense of consensus that it is not working.” 

The private sector’s greater diversity — dozens of large companies and numerous smaller ones compared to one large government — may give it a greater chance to avoid groupthink and produce at least one company that perceives the right solution as worth the risk.

Is there a solution? Cancer mortality rates decreased by an average of 1.6% a year from 2000 to 2009. The more we learn about cancer however, the more we realize how complicated it is. Some argue that the answer lies in prevention for which private companies have little incentive. Environmental factors (diet, tobacco use, etc.) may be linked to at least 67% of all cancers. That suggests the cure for cancer, if there is a cure, will come not from the private or public sector, but from millions of people willing to make key lifestyle changes.