Cost-Offsets of New Medications for Treatment of Schizophrenia

Richard G. Frank, Thomas G. McGuire and Sharon-Lise Normand

No 12643, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Broad claims are frequently made that new medications will offset all or part of their costs by reducing other areas of Medicaid spending. In this paper we examine the net impact on spending for new drugs used to treat schizophrenia. We extend research in this area by taking a new approach to identification of spending impacts of new drugs. We specify and estimate models of spending on treatment of schizophrenia using 7 years of Florida Medicaid data. The estimates indicate that use of the new drugs result in net spending increases. This may be due to increased adherence to treatment.

JEL-codes: I12 (search for similar items in EconPapers)
Date: 2006-10
Note: EH
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Citations: View citations in EconPapers (3)

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