Benefits and Costs of Newer Drugs: An Update / Frank Lichtenberg.

Format:

Book

Author/Creator:

Lichtenberg, Frank.

Contributor:

National Bureau of Economic Research.

Series:

Working Paper Series (National Bureau of Economic Research) no. w8996.

NBER working paper series no. w8996

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Benefits and Costs of Newer Drugs

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2002.

Summary:

We update and extend our previous study of the effect of drug age -- years since FDA approval -- on total medical expenditure, in several respects. The estimates indicate that, in the entire population, a reduction in the age of drugs utilized reduces non-drug expenditure 7.2 times as much as it increases drug expenditure. In the Medicare population, a reduction in the age of drugs utilized reduces non-drug expenditure by all payers 8.3 times as much as it increases drug expenditure; it reduces Medicare non-drug expenditure 6.0 times as much as it increases drug expenditure. About two-thirds of the non-drug Medicare cost reduction is due to reduced hospital costs. The remaining third is approximately evenly divided between reduced Medicare home health care cost and reduced Medicare office-visit cost. We also found that the mean age of drugs used by Medicare enrollees with private Rx insurance is about 9% lower than the mean age of drugs used by Medicare enrollees without either private or public Rx insurance.

Notes:

Print version record

June 2002.