Freakonomics and Cancer Treatment

Economist Steven Levitt and writer Stephen Dubner are two awesome dudes who teamed up to write two of my favorite books in the last few years: Freakonomics and SuperFreakonomics.  They use research and statistical analysis to solve some of the most complex riddles of modern life.  Absolutely fascinating stuff.

I was thrilled to discover in chapter two of Superfreakonomics that they had spent some time studying the cancer treatment industry, further proving what the alternative health world has been saying for years.  The question they answer is this: “Why is chemotherapy prescribed so often if it’s so ineffective?

I touched on their research in my post The Business of Chemo.  Here is a much longer excerpt from the book:

More than $40 Billion is spent worldwide each year on cancer drugs.  In the United States, they constitute the second-largest category of pharmaceutical sales, after heart drugs, and are growing twice as fast as the rest of the market.  The bulk of this spending goes to chemotherapy, which is used in a variety of ways and has proven effective on some cancers, including leukemia, lymphoma, Hodgkin’s disease, and testicular cancer, especially if these cancers are detected early.

But in most other cases, chemotherapy is remarkably ineffective.  An exhaustive analysis of cancer treatment in the United States and Australia showed that the five-year survival rate for all patients was about 63 percent but that chemotherapy contributed barely 2 percent to this result.  There is a long list of cancers for which chemotherapy had zero discernible effect, including multiple myeloma, soft-tissue sarcoma, melanoma of the skin, and cancers of the pancreas, uterus, prostate, bladder, and kidney.

Consider lung cancer, by far the most prevalent fatal cancer, killing more than 150,000 people a year in the United States.  A typical chemotherapy regime for no-small-cell lung cancer costs more than $40,000 but helps extend a patient’s life by an average of just two months.  Thoma J. Smith, a highly regarded oncology researcher and clinician at Virginia Commonwealth University, explained a promising new chemotherapy treatment for metastasized breast cancer and found that each additional year of healthy life gained from it costs $360,000 – if such a gain could actually be had.
Unfortunately, it couldn’t.  The new treatment typically extended a patient’s life by less than two months.

Costs like these put a tremendous strain on the entire health-care system.  Smith points out that cancer patients make up 20 percent of  Medicare cases but consume 40 percent of the Medicare drug budget.

Some oncologists argue that the benefits of chemotherapy aren’t necessarily captured in the mortality data, and that while chemotherapy may not help nine out of ten patients, it may do wonders for the tenth.   Still, considering its expense, its frequent lack of efficacy, and its toxicity – nearly 30 percent of the lung-cancer patients on one protocol stopped treatment rather than live with its brutal side effects – why is chemotherapy so widely administered?

The profit motive is certainly a factor.  Doctors are, after all, human beings who respond to incentives.  Oncologists are among the highest-paid doctors, their salaries increasing faster than any other specialists’ and the typically derive more than half of their income from selling and administering chemotherapy drugs.  Chemotherapy can also help oncologists inflate their survival rate data.  It may not seem all that valuable to give a late stage victim of lung cancer an extra two months to live, but perhaps the patient was only expected to live four months anyway.  On paper, this will look like an impressive feat:  the doctor extended the patient’s remaining life by 50 percent.

Tom Smith doesn’t discount either of these reasons, but he provides two more.

It is tempting, he says, for oncologists to overstate – or perhaps over belive in – the efficacy of chemotherapy.  “If your slogan is ‘We’re winning the war on cancer,’ that gets you press and charitable donations and money from Congress,”  he says.  “If your slogan is ‘We’re still getting our butts kicked by cancer, but not a s bad as we used to,’ that’s a different sell.  The reality is that for most people with solid tumors – brain, breast, prostate, lung – we aren’t getting our butts kicked as badly, but we haven ‘t made much progress.”

There’s also the fact that oncologists are, once again, human beings who have to tell other human beings that they are dying and that, sadly, there isn’t much to be done about it.  “Doctors like me find it incredibly hard to tell people the very bad news,” Smith says, “and how ineffective our medicines sometimes are.”

Despite the mountain of negative evidence, chemotherapy seems to afford cancer patients their last, best hope to nurse what Smith calls “the deep and abiding desire not to be dead.”  Still, it is easy to envision a point in the future, perhaps fifty years from now, when we collectively look back at the early twenty-first century’s cutting-edge cancer treatments and say: We were giving our patients what?

The age adjusted mortality rate for cancer is essentially unchanged over the past half-century, at about 200 deaths per 100,000 people.

Powerful stuff right?  For the skeptics out there, Levitt and Dubner reference all their research, clinical studies, interviews, etc. in the back of the book.

These two books won’t make you any healthier, but man they’re a fun read!

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything:  Things you always thought you knew, but didn’t.  Like:  Which is more dangerous a gun or a swimming pool?  Why do drug dealers still live with their moms?
Did legalized abortion reduce violent crime?

SuperFreakonomics: Global Cooling, Patriotic Prostitutes, and Why Suicide Bombers Should Buy Life Insurance:  Things you never knew you wanted to know, but do.  Like: What’s more dangerous driving drunk or walking drunk?
Did TV cause a rise in crime?  Who adds more value a pimp or a realtor?

These guys are great.  They’ve got a blog, podcast, and a Freakonomics movie coming out October 1st 2010.
Check out their website at


Related posts
Why I Didn’t Do Chemo
The Business of Chemo

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3 Responses to “Freakonomics and Cancer Treatment”
  1. Kylie says:

    Hi Chris,
    I’m keen to read this book. The interesting point that stood out for me in that extract is that doctors in the US are allowed to sell medicines (and obviously profit by doing so). This seems to me to be an obvious and huge conflict of interest. Doctors in Australia are not allowed to sell drugs or own pharmacies, and rightly so. I wonder if the statistics for prescription of chemotherapy are different as a result?
    There is still the human factor – many people are going to insist on chemo even if they’ve been told they have a terminal disease. There are always the exceptions to the rule and most people will hope that they are the exception.
    I am lucky in that I have a cancer that responds well to chemo and unlucky in that an extremely healthy lifestyle did not prevent me from getting it.
    Keep up your good work.

    • Hi Kylie! Thanks for writing. Chemo drugs are the only drugs in the US that doctors can sell directly to their patients
      and make a huge profit on. You’re right, it is a huge conflict of interest. I go into it a bit more in my post The Business of Chemo.
      I imagine cancer treatment and chemo profiteering in Australia is very similar to the US. Please let me know what you find out.


      • Tom says:

        Aside from my cancer being really chemo-sensitive, my particular insurance policy removed the conflict of interest from the situation (or at least from view):

        The plan that my wife’s work provides covers chemotherapy treatments at a rate of 100%. My expectation is that the oncologists aren’t the ones that do the actual purchasing, and the HMO gets a better rate on the drugs.

        It does make me wonder if the oncologists of the HMO would still recommend chemo for cancers that aren’t sensitive to it. Their incentive structure is more cost-reduction than patient-billing.

        Hopefully I won’t ever have a first-hand answer for you!

        I liked the way this system worked. Understanding what I do now, I would be comfortable paying high premiums knowing that this level of cost coverage was supplied.

        In fact, I even got a stem-cell transplant this year. Covered in full. You want to talk about high-magnitude (short-term) chemo brain? Wow. That was a frustrating few weeks, but improvement started quickly.

        Thanks for providing a spot for discussion and rambling!

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