The effects of off-label drug use on disability and medical expenditure

Katharina Blankart and Frank Lichtenberg

No 969, Ruhr Economic Papers from RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen

Abstract: Does using prescription drugs off-label increase disability and medical expenditure? This paper uses a unique dataset to evaluate off-label vs. on-label drug use in the US non-institutionalized population. Patients using drugs off-label have on average $515 higher medical expenditure and work-loss cost. Pharmaceutical innovation has direct and indirect effects on off-label drug use. Market size is indicative of the fraction of treatments used off-label. Our findings have implications for regulation and welfare. We address endogeneity issues by demonstrating that patients with higher disease severity do not experience higher off-label uses and by controlling for unobserved individual and condition effects.

Keywords: Productivity analyses; health care; endogenous growth theory; human capital (search for similar items in EconPapers)
JEL-codes: I11 I12 O33 (search for similar items in EconPapers)
Date: 2022
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https://www.econstor.eu/bitstream/10419/265438/1/1818642786.pdf (application/pdf)

Related works:
Working Paper: The Effects of Off-label Drug Use on Disability and Medical Expenditure (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:rwirep:969

DOI: 10.4419/96973133

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