Public and charitable investment in medical research in the UK brings substantial economic gains in addition to its health benefits, a new study suggests.

The analysis by a consortium involving the Health Economics Research Group at Brunel University, the Office of Health Economics and research institute RAND Europe focused on the health and economic returns from UK investment in research on cardiovascular disease and mental health by funding sources such as the Medical Research Council (MRC), the Department of Health, the Wellcome Trust and the British Heart Foundation between 1975 and 2002.

Using a newly developed methodology, the team led by Professor Martin Buxton from the Health Economics Research Group estimated that the gains to health and gross domestic product (GDP) from public and charitable investments in cardiovascular disease research over this period were equivalent to a 39% annual rate of return. The corresponding figure for mental health research was 37%.

In other words, noted the report on Medical Research: What’s it worth?, for every one pound invested in cardiovascular disease research by UK taxpayers or charitable donors, the resulting stream of benefits was tantamount to earning £0.39 per year in perpetuity. This 39% return comprised 30% per year in GDP gains (i.e., direct returns to the UK economy) and 9% per year in health gains arising from new preventative and therapeutic interventions for disease. Health gains from investment in mental health research were estimated at 7% per year.

Net health gains from a range of interventions were calculated using the quality adjusted life years (QALYs, with a median value or opportunity cost of £25,000 each) measure employed by the National Institute for Health and Clinical Excellence (NICE). The economic gains included the ‘spillover’ effect of public and charitable funding encouraging more investment in medical research by the pharmaceutical industry.

Each £1 of extra public/charitable investment in UK medical research was estimated to yield between £2.20 and £5.10 of additional pharmaceutical industry R&D investment, together earning an extra £1.10 to £2.50 in GDP per year for the UK economy.

The study showed there was a time lag of around 17 years between research expenditure and eventual health benefits, and that reducing this time lag would improve the economic returns from investment.

Sir Leszek Borysiewicz, chief executive of the MRC, commented: “A key message we can take from the findings – particularly during the current economic downturn – is that supporting a wide portfolio of research is very important for future patient and wider economic benefit. It can be hard to see the full potential of research at the outset, but this study shows that investment at any early stage can pay very healthy dividends further down the line”.

The report was commissioned by the MRC, the Wellcome Trust and the Academy of Medical Sciences. They were acting on a recommendation from a report published in 2006 by the UK Evaluation Forum, which was set up by these three parties in 2004 to co-ordinate activity in determining the socio-economic benefits of medical research in the UK.