The Impact of Pharmaceutical Innovation on Premature Mortality, Hospital Separations, and Cancer Survival in Australia

26 Pages Posted: 11 Sep 2017

See all articles by Frank R. Lichtenberg

Frank R. Lichtenberg

Columbia Business School - Finance and Economics; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Date Written: September 2017

Abstract

I analyse the effect that pharmaceutical innovation had on premature (before age 75 and 80) mortality from all diseases in Australia during the period 1998–2011 by investigating whether the diseases that experienced more pharmaceutical innovation had larger declines in premature mortality. My estimates indicate that 60 per cent of the 1998–2011 decline in premature (before age 75) mortality was due to previous pharmaceutical innovation. They also indicate that previous pharmaceutical innovation accounted for 40 per cent of the 1986–2007 increase (from 49.0 per cent to 61.6 per cent) in the 5‐year relative cancer survival rate, controlling for mean age at diagnosis and the number of patients diagnosed, and that if no new drugs had been introduced during 1986–1999, the number of hospital separations in 2011 would have been about 13 per cent higher, ceteris paribus. My estimates indicate that new drugs listed on the Pharmaceutical Benefits Scheme during 1989–2002 reduced the number of life‐years lost from all diseases before ages 75 and 80 in 2011 by 143,639 and 257,602, respectively, and that the innovation was cost‐saving: the reduction in hospital expenditure attributable to it exceeded expenditure on the drugs. Even if it completely ignores the apparent reduction in hospital expenditure, the evidence indicates that pharmaceutical innovation was highly cost‐effective.

Suggested Citation

Lichtenberg, Frank R., The Impact of Pharmaceutical Innovation on Premature Mortality, Hospital Separations, and Cancer Survival in Australia (September 2017). Economic Record, Vol. 93, Issue 302, pp. 353-378, 2017, Available at SSRN: https://ssrn.com/abstract=3034014 or http://dx.doi.org/10.1111/1475-4932.12332

Frank R. Lichtenberg (Contact Author)

Columbia Business School - Finance and Economics ( email )

3022 Broadway
504 Uris Hall, Dept. of Finance & Economics
New York, NY 10027
United States
212-854-4408 (Phone)
212-316-9219 (Fax)

HOME PAGE: http://https://www8.gsb.columbia.edu/cbs-directory/detail/frl1

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

CESifo (Center for Economic Studies and Ifo Institute for Economic Research)

Poschinger Str. 5
Munich, DE-81679
Germany

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
0
Abstract Views
106
PlumX Metrics