Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs

7 Pages Posted: 23 Jan 2017

See all articles by Margaret Kyle

Margaret Kyle

École Nationale Supérieure des Mines de Paris - Centre d'Économie Industrielle (CERNA)

Heidi L. Williams

MIT Department of Economics; National Bureau of Economic Research (NBER)

Date Written: January 2017

Abstract

Alan Garber and Jonathan Skinner (2008) famously conjectured that the US health care system was “uniquely inefficient” relative to other countries. We test this idea using cross-country data on prescription drug sales newly linked with an arguably objective measure of relative therapeutic benefits, or drug quality. Specifically, we investigate how higher and lower quality drugs diffuse in the US relative to Australia, Canada, Switzerland, and the UK. Our tabulations suggest that lower quality drugs diffuse more in the US relative to high quality drugs, compared to each of our four comparison countries – consistent with Garber and Skinner’s conjecture.

Suggested Citation

Kyle, Margaret and Williams, Heidi L., Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs (January 2017). NBER Working Paper No. w23068. Available at SSRN: https://ssrn.com/abstract=2903735

Margaret Kyle (Contact Author)

École Nationale Supérieure des Mines de Paris - Centre d'Économie Industrielle (CERNA) ( email )

60, boulevard Saint Michel
75272 Paris Cedex 06, 75272
France

Heidi L. Williams

MIT Department of Economics ( email )

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States
(617) 324-4326 (Phone)
(617) 253-1330 (Fax)

HOME PAGE: http://econ-www.mit.edu/faculty/heidiw

National Bureau of Economic Research (NBER)

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