Pharmaceutical Drug Regulation and Mortality: Evidence from E-cigarettes
110 Pages Posted: 24 Jan 2025 Last revised: 27 Jan 2025
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: Suggested Citation