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Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs

Margaret Kyle and Heidi Williams

American Economic Review, 2017, vol. 107, issue 5, 486-90

Abstract: Alan Garber and Jonathan Skinner (2008) famously conjectured that the US health care system was "uniquely inefficient" relative to other countries. We test this idea using cross-country data on prescription drug sales newly linked with an arguably objective measure of relative therapeutic benefits, or drug quality. Specifically, we investigate how higher and lower quality drugs diffuse in the US relative to Australia, Canada, Switzerland, and the UK. Our tabulations suggest that lower quality drugs diffuse more in the US relative to high quality drugs compared to each of our four comparison countries--consistent with Garber and Skinner's conjecture.

JEL-codes: H51 I11 I18 L65 (search for similar items in EconPapers)
Date: 2017
Note: DOI: 10.1257/aer.p20171086
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Handle: RePEc:aea:aecrev:v:107:y:2017:i:5:p:486-90