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How Is Cancer Research Affected by the State of the Economy?

12/23/2009 12:31:47 PM

Cancer research facilities generate the majority of their revenue from clinical practice, research grants, state funding and private donations. Typically, when the economy is good, grants and donations are more abundant, and during a down economy, grants and donations are harder to come by. Another factor that affects cancer research facilities in a down economy is the unemployment rate. When the unemployment rates are high, more people do not have health insurance and cannot pay for their medical bills, which directly affects revenue obtained through clinical practice. The operation costs to run cancer research facilities are high. For example: In 2008, Roswell Park Cancer Institute, a cancer treatment and research facility in New York, had an operating budget of $484 million. [Roswell Park Cancer Institute] A smaller operating budget for cancer research facilities affects various areas of cancer research and potentially slows down the the advancement of new medical breakthroughs towards the fight against cancer.


When the state of the economy is down and cancer research facilities face a budget crisis, employee layoffs are sometimes unavoidable. Employee layoffs are often the first of many actions taken to reduce expenditures. In 2008, the University of Pittsburgh Medical Center (UPMC) laid off more than 500 employees. In the case of the UPMC, the employee layoffs were limited to employees who held non-medical positions. Less staff, even non-medical staff, causes a decrease in functionality of the daily operations of a research facility. For example: Clerical and administrative staff provide date entry and accounting skills.

Building and Equipment

A tight budget leaves little to no room for new equipment or the building of new research facilities. This effect of a bad economy has dire results for cities that have a great need for new or expanded facilities. A shortage or lack of sophisticated medical equipment and hospital facilities influences the quality of patient care and research. A 2009 report by the American Hospital Association states that 89 percent of the hospitals that had planned upgrades or modernizations to facilities, had to put their projects on hold due to economic recession.

Research Projects

Perhaps the most devastating result of a bad economy toward the fight against cancer is when research projects and clinical trails are canceled. Particularly affected are research projects that do not have the prospect of generating high profits. For instance a research project on herbs does not have near the profit potential as a research project on the development of a new chemotherapy drug.

References Biotech and Pharmaceutical News & Jobs
Roswell Park Cancer Institute - State of the Institute 2009
Pittsburgh Business Times
Report on the Capital Crisis: Impact on Hospitals; American Hospital Association; Jan 2009

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