Major Entitlement Savings from Advances in Diabetes Research

Three new economic studies conclude that continued advances in treating and eventually curing diabetes, spurred by federal research initiatives like the Special Diabetes Program (SDP), will produce tens if not hundreds of billions of dollars in savings to Medicare and the overall economy in the next few decades. The SDP funds type 1 diabetes (T1D) research but also advances treatments relevant for type 2 diabetes.

Diabetes costs the economy $174 billion each year, a figure projected to triple to over 500 billion in the next 25 years as the rate of newly diagnosed cases continues to rise. Epidemiologists estimate that if these trends continue, by 2020 more than 39 million people — nearly 12 percent of Americans — will have a form of diabetes. This would impose a staggering burden on the health care system in treating the disease and its many complications, such as end-stage renal disease (ESRD), heart disease, and eye disease.

The three new studies were commissioned by JDRF, the leading global organization focused on T1D research, and examine the impact of improved diabetes treatment on federal entitlement programs and the overall economy.

Jeffrey Brewer, president and CEO of JDRF, stated that, "These three studies substantiate that renewing the SDP this year is not only good for those living now with diabetes and those who are projected to develop the disease, it is good for the long-term fiscal health of our country." "The SDP brings patients and families closer to improved treatments and an eventual cure and has the added benefit of giving the federal government and taxpayers a tremendous return on investment."

One study looked at diabetes and kidney disease. Diabetes is the leading cause of kidney failure, also known as ESRD. The number of people with diabetes and kidney failure grew by 48 percent between 2000 and 2008. Treating people with ESRD cost the health care system $42.5 billion in 2009, $29 billion of which was paid by Medicare — an average of $82,000 per person.

In their study entitled Potential Medicare Savings of Reduced End Stage Renal Disease in Patients with Diabetes, researchers Aaron Winn, M.P.P., Michael O’Grady, Ph.D., and Elbert S. Huang, M.D., M.P.H., estimate that if rates of ESRD are lowered by 50 percent, cumulative savings to Medicare after 10 years will reach $475 million for T1D and $14 billion for type 2 diabetes. Within 25 years, those savings are projected to increase to $5.9 billion for T1D and $120 billion for type 2 diabetes.

A second study by Winn, O’Grady, and Huang focused on the impact of tighter glucose controls on federal entitlement outlays. According to a letter the leading diabetes clinical organizations recently sent to Congress, "recent SDP research found that tighter glucose control leads to less costly complications, including a reduction in ESRD… SDP research also led to accelerated development of artificial pancreas systems that help people with diabetes better manage their blood sugar levels."

In their paper Potential Medicare Savings of Enhanced Glucose Control Strategies in Patients with Diabetes, Winn and his colleagues concluded that for the current population living with diabetes, new glucose lowering strategies could generate Medicare savings ranging from $450-$810 million for T1D and $5-$45 billion for type 2 diabetes after 10 years, growing to $5.9-$10.4 billion for T1D and $24-$180 billion for type 2 diabetes after 25 years.

The third paper released today, Diabetes Research and the Public Good: Federal Support for Research on Type 1 Diabetes, by Robert J. Shapiro, Ph.D., M.A., M.Sc. and Nam D. Pham, Ph.D., estimated that if continued advances in treatment "can reduce the incidence and severity of T1D by just 10 percent by 2020, the savings in medical costs would exceed $2.6 billion per-year." Further, they find that there would be "another $2.2 billion in annual non-medical economic savings, or $4.8 billion a year." Such savings would generate an annual rate of return of 163 percent, year after year, on the federal investment in the SDP program.

In addition, if spillovers from these advances reduce the incidence and severity of type 2 diabetes by just 5 percent in 2020, that would save nearly $17.4 billion per year in medical costs, plus nearly $7.5 billion per year in non-medical economic costs.

Shapiro and Pham also found that diabetes costs are a significant drag on our economy. Without additional breakthroughs stemming from SDP and other research, the non-medical economic costs of diabetes (lost work days, lower productivity) are expected to reach $196 billion, or more than 0.8 percent of GDP by 2020. The paper concludes that the foregone economic production related to diabetes in 2020 would cover the wages and salaries of 2,644,824 full-time workers.

Since 1997, the SDP has led to new insights and therapies, such as artificial pancreas systems, that are changing not only the lives of the 26 million Americans living with diabetes, but also approximately 20 million more affected by autoimmune diseases. The SDP is currently funded through September 2013 at $150 million annually, and has always been renewed a year in advance in order to ensure program continuity and avoid the need to terminate promising research.

Publishers Comment: We can save one-half trillion by treating diabetes more aggressively: imagine what we could save if we just prevented diabetes?