Pharmaceutical Drug Regulation and Mortality: Evidence from E-cigarettes

110 Pages Posted: 24 Jan 2025 Last revised: 27 Jan 2025

See all articles by Michael Pesko

Michael Pesko

University of Missouri - Department of Economics

Christian Saenz

Georgia State University - Andrew Young School of Policy Studies

Date Written: January 01, 2025

Abstract

This study evaluates drug regulation in the United States by examining a product that was unexpectedly judicially exempted from drug regulation in 2010: e-cigarettes. We compare these effects to nicotine replacement therapy, which was not exempted. Our analysis shows that this exemption led to significant increases in e-cigarette innovation, as evidenced by patent applications. Leveraging differences in smoking rates across demographic groups prior to e-cigarette introduction, we find that from 2011 to 2019, e-cigarettes saved 677,000 life-years, or approximately 1/3 the estimated benefit of early HIV/AIDS drugs through year 2000, and increased social surplus by $8 billion annually. We demonstrate that reduced smoking is a key mechanism explaining this mortality reduction, with statistically significant smoking reductions proceeding mortality reductions by approximately 4 years.

Keywords: drug regulation, mortality, innovation, patents, e–cigarettes, smoking, nicotine replacement therapy

JEL Classification: I12, I18, D62

Suggested Citation

Pesko, Michael and Saenz, Christian,
Pharmaceutical Drug Regulation and Mortality: Evidence from E-cigarettes
(January 01, 2025). Available at SSRN: https://ssrn.com/abstract=5108105 or http://dx.doi.org/10.2139/ssrn.5108105

Michael Pesko

University of Missouri - Department of Economics ( email )

USA

Christian Saenz (Contact Author)

Georgia State University - Andrew Young School of Policy Studies ( email )

Department of Economics
35 Broad Street, 6th Floor
Atlanta, GA 30303-3083
United States

HOME PAGE: http://www.ChristianMSaenz.com

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