The impact of pharmaceutical innovation on longevity and medical expenditure in Sweden, 1997-2010: evidence from longitudinal, disease-level data

Frank Lichtenberg and Billie Pettersson

Economics of Innovation and New Technology, 2014, vol. 23, issue 3, 239-273

Abstract: We use longitudinal, disease-level data to analyze the impact of pharmaceutical innovation on longevity and medical expenditure in Sweden, where mean age at death increased by 1.88 years during the period 1997-2010. Pharmaceutical innovation is estimated to have increased mean age at death by 0.60 years during the period. The estimates indicate that longevity depends on the number of drugs to treat a disease, not the number of drug classes. Pharmaceutical innovation also reduced hospital utilization; the estimates indicate that an increase in the number of drugs commercialized for a disease reduces the number of hospital days due to the disease 8 years later, primarily due to its effect on the number of hospital discharges. The cost per life-year gained from the introduction of new drugs is estimated to be a small fraction of leading economists' estimates of the value of a 1-year increase in life expectancy.

Date: 2014
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Working Paper: The Impact of Pharmaceutical Innovation on Longevity and Medical Expenditure in Sweden, 1997-2010: Evidence from Longitudinal, Disease-Level Data (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:taf:ecinnt:v:23:y:2014:i:3:p:239-273

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DOI: 10.1080/10438599.2013.828456

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