Tomas Philipson’s research while affiliated with University of Chicago and other places

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Publications (206)


Screening Protocols Recommended by the USPSTF Over Time for Four Cancer Types
CT, computed tomography; FIT, fecal immunochemical test; Flex sig, flexible sigmoidoscopy; FOBT, fecal occult blood test; gFOBT, guaiac fecal occult blood test; HPV, human papilloma virus; hrHPV, high-risk human papillomavirus; LDCT, low-dose computed tomography; Pap, Papanicolaou smear or Pap test; USPSTF, US Preventive Services Task Force
Methodology to Estimate the Full Potential Value of Cancer Screening
Methodology to Estimate the Value of Cancer Screening Considering Adherence
Cumulative Number of Eligible Individuals Since USPSTF Recommendations
Max, maximum scenario; min, minimum scenario; USPSTF, US Preventive Services Task Force
Observed and Imputed Cancer Screening Adherence Rates Over Time

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The aggregate value of cancer screenings in the United States: full potential value and value considering adherence
  • Article
  • Full-text available

August 2023

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53 Reads

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21 Citations

BMC Health Services Research

Tomas J. Philipson

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Troy Durie

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Ze Cong

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A. Mark Fendrick

Background Although cancer mortality has been decreasing since 1991, many cancers are still not detected until later stages with poorer outcomes. Screening for early-stage cancer can save lives because treatments are generally more effective at earlier than later stages of disease. Evidence of the aggregate benefits of guideline-recommended single-site cancer screenings has been limited. This article assesses the benefits in terms of life-years gained and associated value from major cancer screening technologies in the United States. Methods A mathematical model was built to estimate the aggregate benefits of screenings for breast, colorectal, cervical, and lung cancer over time since the start of US Preventive Services Task Force (USPSTF) recommendations. For each type, the full potential benefits under perfect adherence and the benefits considering reported adherence rates were estimated. The effectiveness of each screening technology was abstracted from published literature on the life-years gained per screened individual. The number of individuals eligible for screening per year was estimated using US Census data matched to the USPSTF recommendations, which changed over time. Adherence rates to screening protocols were based on the National Health Interview Survey results with extrapolation. Results Since initial USPSTF recommendations, up to 417 million people were eligible for cancer screening. Assuming perfect adherence to screening recommendations, the life-years gained from screenings are estimated to be 15.5–21.3 million (2.2–4.9, 1.4–3.6, 11.4–12.3, and 0.5 million for breast, colorectal, cervical, and lung cancer, respectively). At reported adherence rates, combined screening has saved 12.2–16.2 million life-years since the introduction of USPSTF recommendations, ~ 75% of potential with perfect adherence. These benefits translate into a value of 8.28.2-11.3 trillion at full potential and 6.56.5-8.6 trillion considering current adherence. Therefore, single-site screening could have saved an additional 3.2–5.1 million life-years, equating to 1.71.7-2.7 trillion, with perfect adherence. Conclusions Although gaps persist between the full potential benefit and benefits considering adherence, existing cancer screening technologies have offered significant value to the US population. Technologies and policy interventions that can improve adherence and/or expand the number of cancer types tested will provide significantly more value and save significantly more patient lives.

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The Value of Medical Innovation Versus Industry Rewards

December 2022

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14 Reads

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2 Citations

Value in Health

Objective: This paper provides systematic evidence on the share of the value of health generated by drugs and other health care goods and services that accrue to patients on the demand side versus the manufacturers on the supply side. Method: We exploit a large data set with over 9,000 cost-effectiveness measures for various interventions, which we convert into measures of the shares of the value of improved health appropriated by the supply side using literature estimates of how patients value gains in health. Results: We find that if patients value a quality-adjusted life year (QALY) at 450,000themedianshareappropriatedfordrugsonthesupplysideisaround6percentandhasdeclinedat0.1percentperyearbetween1997and2019.Thiscomparestootherhealthcareinterventions,suchasscreeningsormedicalprocedures,whichhaveamedianvalueof9percentbutdeclineat0.3percentperyearoverthesameperiod.IfpatientsvalueaQALYat450,000 the median share appropriated for drugs on the supply side is around 6 percent and has declined at 0.1 percent per year between 1997 and 2019. This compares to other health care interventions, such as screenings or medical procedures, which have a median value of 9 percent but decline at 0.3 percent per year over the same period. If patients value a QALY at 150,000 the median share appropriated for drugs and other health care interventions on the supply side is around 18 percent and 27 percent respectively. Conclusion: Many policy debates center on the idea that the supply side is capturing too much of the value of the medical innovation that they generate. We find that for these interventions, a large share of the value of medical innovation accrues to patients on the demand side since the revenue to innovators is often far less than the patient's value of these medical innovations.


Sharing R&D Risk in Healthcare via FDA Hedges

November 2021

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71 Reads

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11 Citations

The Review of Corporate Finance Studies

Adam Jørring

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Tomas J Philipson

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[...]

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Biomedical innovation suffers from a “funding gap” between the needs of drug development firms and the availability of funds. The requirement of large investments for drug development projects and the high pipeline risk associated with FDA approval causes this funding gap in part. In this paper, we propose a new financial instrument—the “FDA hedge”—that pays off upon FDA approval failure. We develop a theory to show that the FDA hedge can help eliminate the funding gap. Using novel project-level data, we establish empirically that FDA hedge risk is idiosyncratic, and show how better sharing this risk can spur welfare-enhancing R&D. (JEL G11, G13, G22, I11, L65, O32 Received November 30, 2020; editorial decision September 23, 2021 by Editor Andrew Ellul. Authors have furnished an Internet Appendix, which is available on the Oxford University Press Web site next to the link to the final published paper online.




How Does Technological Change Affect Quality-Adjusted Prices in Health Care? Systematic Evidence from Thousands of Innovations

October 2017

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32 Reads

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14 Citations

American Journal of Health Economics

Medical innovations have improved treatment for many diseases but have simultaneously raised spending on health care. Many health economists believe that technological change is the major factor driving the growth of the health-care sector. Whether quality has increased as much as spending—that is, whether new innovations raise or lower quality-adjusted prices in health care—is a central question for both positive and normative health-care analysis. We do a systematic analysis of the impact of technological change on quality-adjusted prices, with over 6,000 comparisons between innovations and incumbent technologies. We observe each innovation’s price and quality, as well as the price and quality of an incumbent technology treating the same disease. We find that the inno-vations’ quality-adjusted prices are higher than the incumbents’ for about two-thirds of innovations. Nevertheless, we argue that quality-adjusted prices may fall or rise over time depending on the effect of competition on incumbents’ prices over time. A 4-percent price decline due to competition would offset the cross-sectional price difference for a majority of indications. We discuss the conditions particular to health care that may cause increases in quality-adjusted prices over time rather than decreases as experienced in many other industries. © 2018 American Society of Health Economists and Massachusetts Institute of Technology.


The importance of model inputs and assumptions in conducting health technology assessments of novel drugs

July 2017

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12 Reads

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1 Citation



Association Between Breast Cancer Disease Progression and Workplace Productivity in the United States

February 2017

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61 Reads

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19 Citations

Journal of occupational and environmental medicine / American College of Occupational and Environmental Medicine

Objective: Determine workplace productivity losses attributable to breast cancer progression. Methods: Longitudinal analysis linking 2005 to 2012 medical and pharmacy claims and workplace absence data in the US patients were commercially insured women aged 18 to 64 diagnosed with breast cancer. Productivity was measured as employment status and total quarterly workplace hours missed, and valued using average US wages. Results: Six thousand four hundred and nine women were included. Breast cancer progression was associated with a lower probability of employment (hazard ratio [HR] = 0.65, P < 0.01) and increased workplace hours missed. The annual value of missed work was 24,166fornonmetastaticand24,166 for non-metastatic and 30,666 for metastatic patients. Thus, progression to metastatic disease is associated with an additional $6500 in lost work time (P < 0.05), or 14% of average US wages. Conclusions: Breast cancer progression leads to diminished likelihood of employment, increased workplace hours missed, and increased cost burden.



Citations (72)


... 13,24,25 In the oncology setting, the HHP is particularly well studied in screen-eligible cancers such as breast, colorectal, and lung, 16,[19][20][21] cancers for which early detection can significantly improve survival. 26 To date, a limited number of studies have evaluated the HHP among patients with HNSCC. HNSCC is a malignancy for which no population-level screening program exists, leading to symptomatic diagnosis that is frequently at an advanced stage. ...

Reference:

Disparities in Survival of Head and Neck Cancer in the Hispanic Population: Systematic‐Review and Meta‐analysis
The aggregate value of cancer screenings in the United States: full potential value and value considering adherence

BMC Health Services Research

... They have used the available secondary data from various sources on the Croatian economy and analyzed that there has been substantial increase in investment on R&D of health sector; both from national and international sources and importance on research projects have been emphasized, and the authors feel that such projects, in the long run, would improve the health quality and health sector of the Croatian economy. Jorring et al. (2017), in their work, have argued that investment in R&D of health is a risky affair for the firms conducting such research. By using financial instruments, Food and Drug Administration (FDA) hedges, historical FDA approval data, they have shown that, by allowing better risk-sharing between investors in R&D of health and capital markets more generally, FDA hedges could minimize such risks and encourage health innovations and its outcomes. ...

Sharing R&D Risk in Healthcare via FDA Hedges
  • Citing Article
  • November 2021

The Review of Corporate Finance Studies

... The put option sold by insiders to investors in our mechanism in conjunction with equity financing is analogous to "putable common stock" that has been used by some firms. 7 Recently proposed contracts for the biopharma industry, like FDA swaps and hedges (Philipson (2015) and Jørring et al. (2022)), combine aspects of both types of option contracts. A novel aspect of our analysis is the demonstration that these 7 Putable common stock gives investors the option to sell their stock back to the firm. ...

Sharing R&D Risk in Healthcare via FDA Hedges
  • Citing Article
  • January 2017

SSRN Electronic Journal

... Most studies conducted on patients noted impairment in patient productivity from cancer treatment. Factors found to be associated with negative productivity were disease progression or severity, 34,35,39,63 treatment-related side effects that led to missed work, 20,22,23,31,35,39,41,43,46,47,54,66,70,77,79 treatment-associated cognitive impairments, 32 and lifting heavy loads and keeping pace with others at work. 62 Chemotherapy was found to be associated with greater limitations after return to work, 70 longer periods of sick leave or delayed return, 20,22,23,28,43,66,77 and greater probability of not returning to work. ...

Breast cancer progression and workplace productivity.
  • Citing Article
  • May 2015

Journal of Clinical Oncology

... Our study draws on a mature literature that integrates economics and epidemiology to examine a wide variety of infectious diseases in humans (e.g. Gersovitz and Hammer 2004;Rowthorn et al. 2009;Perrings et al. 2014;Fenichel et al. 2011;Gersovitz 2011;Fenichel 2013;Philipson 2016). We also add to a growing collection of recent studies that apply optimal control theory or computational dynamic optimization techniques to the COVID-19 outbreak in particular (e.g. ...

Economic Epidemiology
  • Citing Chapter
  • January 2018

... Een analyse van meer dan zesduizend zorginnovaties in de Verenigde Staten en de Europese Unie laat zien dat in 68 procent van de gevallen de innovatie, gecorrigeerd voor gezonde levensjaren, duurder is dan de standaardbehandeling waarmee er vergeleken werd (Hult et al., 2016). Voor deze 68 procent komt dit door een combinatie van een klein beetje gezondheidswinst (mediane waarde: één procent) met een behoorlijk hogere prijs (mediane waarde: acht procent). ...

How Does Technological Change Affect Quality-Adjusted Prices in Health Care? Systematic Evidence from Thousands of Innovations
  • Citing Article
  • October 2017

American Journal of Health Economics

... While some existing contracts suggest the idea of failure insurance for entrepreneurs, a novel normative aspect of our mechanism design is the put option sold by insiders to investors, as we discuss below. In terms of implementation, we relate these options to several recently proposed biopharma innovations such as FDA swaps and hedges (see Philipson (2015) and Jørring et al. (2017)) and "phase 2 development insurance". Our analysis reveals the potential benefits of coordinating mechanisms between firms and investors to induce precommitment in R&D financing. ...

Sharing R&D Risk in Healthcare via FDA Hedges

SSRN Electronic Journal

... 3 Value determinants, such as a medicine's evidence, clinical outcomes or its impact on quality of life can change over time based either on new findings from additional clinical trials or real-world evidence or in comparison with new medicines entering the market for the same indication. 59 These study findings suggest that the value of medicines should not be understood statically but rather dynamically, which is consistent with the approach of Health Technology Assessment (HTA) bodies or agencies that reassess value and prices of medicines either on a regular basis (eg, every 3 years in Switzerland) or if new evidence from clinical trials or real-world data is provided (eg, Germany). ...

Defining Value: The Need for a Longer, Broader View
  • Citing Article
  • March 2017

PharmacoEconomics

... However, the share of cancer care in the total health expenditure has been stable, meaning that total health expenditures increased at a similar pace. It has been documented that significant reductions in cancer mortality may be attributed to pharmaceutical innovation [13,14]. The association of mortality-to-incidence (M/I) ratio with different socioeconomic, general health, and lifestyle factors, expenditure on health care in general, cancer-specific expenditure, and finally the expenditure on oncology drugs is different in particular cancers [5]. ...

The determinants of recent gains in cancer survival: An analysis of the Surveillance, Epidemiology, and End Results (SEER) database
  • Citing Article
  • May 2008

Journal of Clinical Oncology

... Previous studies demonstrated that BC leads to at least one period of sick leave in the year following the diagnosis, and this causes costs estimated at between 10,000 [87] and over 30,000 EUR [3] per patient. In cases with an unfavorable clinical course, BC progression leads to a reduced likelihood of employment, an increase in the number of workplace hours missed, and an elevated cost burden [88]. Our sample included many women with a favorable course, for whom the disease was under control, but they nevertheless encountered considerable difficulties. ...

Association Between Breast Cancer Disease Progression and Workplace Productivity in the United States
  • Citing Article
  • February 2017

Journal of occupational and environmental medicine / American College of Occupational and Environmental Medicine