Pharmaceutical Innovation and Cancer Survival

Posted: 28 Jun 2007

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)

Bengt Jonsson

Uppsala University - Department of Information Science

Nils Wilking

affiliation not provided to SSRN

Abstract

We present three types of evidence about the effect of cancer drug vintage-year of initial world launch - on cancer survival and mortality. All three are based on group-level data, and employ difference-in-difference research designs, which enable us to control for the influence of potentially confounding variables far better than cross-sectional or time-series models. The first analysis uses data on cancer drug vintage, survival, and other variables, by primary cancer site and year, for U.S. cancer patients during the period 1992-2002. We control for cancer stage distribution, mean age at diagnosis, expected survival, number of people diagnosed, and innovation in diagnostic, radiation, and surgical procedures. We find that the cancer sites whose drug vintage (measured by the share of post-1990 treatments) increased the most during the 1990s tended to have larger increases in observed survival rates, ceteris paribus. Estimates of the fraction of the 1992-1999 change in the observed survival rate that is attributable to the increased utilization of post-1990 drugs range from 12% to 121%; the mean of these estimates was 44%.

The second analysis uses data by primary cancer site and country, for 5 large European countries. Drug vintage (in this case measured by the share of post-1985 treatments) has a positive and statistically significant effect on both 1-year and 5-year survival rates. The difference in the fraction of post-1985 cancer drugs accounts for 14-19% of the (probit of the) 5-year survival rate differential, adjusted for international differences in distribution of cancer sites. Since the data on survival and on drug utilization pertain to different time periods, this estimate is probably conservative. The third analysis is based on data by country and year, for all cancer sites combined, for 20 countries during the period 1995-2003. We find that countries with larger increases in the mean launch year of cancer drugs had larger declines in the age-adjusted cancer mortality rate. A 10-year increase in drug vintage is estimated to reduce the cancer mortality rate by 5.9%, controlling for per capita GDP growth. The increase in cancer drug vintage - in other words, the use of newer cancer drugs accounts for about 30% of the GDP-growth-adjusted decline in the age-adjusted cancer mortality rate.

Keywords: cancer, pharmaceutical, innovation

JEL Classification: I1,O3

Suggested Citation

Lichtenberg, Frank R. and Jonsson, Bengt and Wilking, Nils, Pharmaceutical Innovation and Cancer Survival. iHEA 2007 6th World Congress: Explorations in Health Economics Paper, Available at SSRN: https://ssrn.com/abstract=992447

Frank R. Lichtenberg (Contact Author)

Columbia Business School - Finance and Economics ( email )

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

National Bureau of Economic Research (NBER)

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

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Germany

Bengt Jonsson

Uppsala University - Department of Information Science ( email )

Box 325
S-751 05 Uppsala
SWEDEN
+46 18 4713157 (Phone)
+46 18 550225 (Fax)

Nils Wilking

affiliation not provided to SSRN

No Address Available

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