Pharmaceuticai Innovation, Longevity, and Medical Expenditure in Greece, 1995-2010
34 Pages Posted: 4 Feb 2015
Date Written: January 30, 2015
Longitudinal, disease-level data are used to analyze the impact of pharmaceutical innovation on longevity (mean age at death), hospital utilization, and medical expenditure in Greece during the period 1995-2010. The estimates indicate that pharmaceutical innovation increased mean age at death by 0.87 years (10.4 months) — about 44% of the total increase in longevity — and that diseases with larger increases in the cumulative number of drugs launched 1-4 years earlier had smaller increases in the number of hospital days. Real per capita pharmaceutical expenditure increased rapidly during this period, but 62% of the increase in pharmaceutical expenditure was offset by a reduction in hospital expenditure attributable to pharmaceutical innovation. The baseline estimate of the cost per life-year gained from pharmaceutical innovation in Greece is $17,117, which is a very small fraction of leading economists’ estimates of the value of (or consumers’ willingness to pay for) a one-year increase in life expectancy.
Keywords: pharmaceutical, innovation, longevity, Greece, hospital
JEL Classification: I120, J110, L650, O330, O520
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