Pharmaceutical-embodied technical progress, longevity, and quality of life: drugs as "equipment for your health"

Several econometric studies have concluded that technical progress embodied in equipment is a major source of manufacturing productivity growth. Other research has suggested that, over the long run, growth in the U.S. economy's 'health output' has been at least as large as the growth in non-health goods and services. One important input in the production of health pharmaceuticals is even more R&D- intensive than equipment. In this paper we test the pharmaceutical-embodied technical progress hypothesis the hypothesis that newer drugs increase the length and quality of life and estimate the rate of progress. To do this, we estimate health production functions, in which the dependent variables are various indicators of post-treatment health status (such as survival, perceived health status, and presence of physical or cognitive limitations), and the regressors include drug vintage (the year in which the FDA first approved a drug's active ingredient(s)) and indicators of pre-treatment health status. We estimate these relationships using extremely disaggregated prescription- level cross-sectional data derived primarily from the 1997 Medical Expenditure Panel Survey. We find that people who used newer drugs had better post-treatment health than people using older drugs for the same condition, controlling for pre-treatment health, age, sex, race, marital status, education, income, and insurance coverage: they were more likely to survive, their perceived health status was higher, and they experienced fewer activity, social, and physical limitations. The estimated cost of the increase in vintage required to keep a person alive is lower than some estimates of the value of remaining alive for one month. One estimate of the cost of preventing an activity limitation is $1745, and the annual rate of technical progress with respect to activity limitations is 8.4%. People consuming newer drugs tend to experience greater increases (or smaller declines) in physical ability than people consuming older drugs. Most of the health measures indicate that the effect of drug vintage on health is higher for people with low initial health than it is for people with high initial health. Therefore in contrast to equipment-embodied technical progress economic inequality, pharmaceutical-embodied technical progress has a tendency to reduce inequality as well as promote economic growth, broadly defined.

Mapping the value for money of precision medicine: a systematic literature review and meta-analysis

ObjectiveThis study aimed to quantify heterogeneity in the value for money of precision medicine (PM) by application types across contexts and conditions and to quantify sources of heterogeneity to areas of particular promises or concerns as the field of PM moves forward.MethodsA systemic search was performed in Embase, Medline, EconLit, and CRD databases for studies published between 2011 and 2021 on cost-effectiveness analysis (CEA) of PM interventions. Based on a willingness-to-pay threshold of one-time GDP per capita of each study country, the net monetary benefit (NMB) of PM was pooled using random-effects meta-analyses. Sources of heterogeneity and study biases were examined using random-effects meta-regressions, jackknife sensitivity analysis, and the biases in economic studies checklist.ResultsAmong the 275 unique CEAs of PM, publicly sponsored studies found neither genetic testing nor gene therapy cost-effective in general, which was contradictory to studies funded by commercial entities and early stage evaluations. Evidence of PM being cost-effective was concentrated in a genetic test for screening, diagnosis, or as companion diagnostics (pooled NMBs, $48,152,$8,869, 5,693, p < 0.001), in the form of multigene panel testing (pooled NMBs = 31,026, p &lt; 0.001), which only applied to a few disease areas such as cancer and high-income countries. Incremental effectiveness was an essential value driver for varied genetic tests but not gene therapy.ConclusionPrecision medicine’s value for money across application types and contexts was difficult to conclude from published studies, which might be subject to systematic bias. The conducting and reporting of CEA of PM should be locally based and standardized for meaningful comparisons

Drug competition and voluntary exit

We use a duration model to find evidence that drug exit is exacerbated by generic competition. However, the impact on drug exit of competition with other branded drugs within a drug&apos;s therapeutic class is not statistically significant. (C) 2008 Elsevier B.V. All rights reserved.1

The impact of Medicaid's preferred drug lists on physicians' prescribing behaviour

This article examines Medicaid preferred drug lists (PDLs), a cost-containment tool that designates specific drugs for use by Medicaid beneficiaries. We develop an empirical model to measure the direct and spillover effects of Medicaid PDL across Medicaid, cash and third-party payer markets; and apply product level panel data to the cardiovascular market in Illinois and Louisiana. We find a significant decrease in post-PDL Medicaid prescription shares of drugs excluded from the PDL. Spillovers onto third parties and the cash market are also statistically significant. Moreover, a more restrictive prior authorization procedure has a greater impact on prescription shares. There is evidence of gradual adjustment in prescription shares. Lastly, the impact of PDLs is stronger among physicians with a higher share of Medicaid prescriptions.

Drug competition: The Waxman-Hatch Act revisited

This paper examines generic competition following the enactment of the 1984Waxman-Hatch Act. Unlike the existing literature, we employ antibiotics as a control group to infer legislation-induced increases in generic competition. Using FDA drug approval data, we find evidence that the Act enhanced generic competition, resulting in 1.5 times more competition between nonantibiotic drugs than between antibiotics. Moreover, the Act&apos;s overall impact is greater for newer drugs than older drugs. Copyright © by The Haworth Press, Inc. All rights reserved.1

Using Patents Data to Map Technical Change in Health-Related Areas

This document reports findings regarding the use of patents data for understanding various dimensions of technical change in health-related areas. Reported counts are based on “Triadic Patent Families”, that is sets of patents covering a single invention, filed altogether in Europe, Japan and the US. There were nearly 40 000 health-related patent families filed in the 1988-1995 period, which is 16% of the total number of patent families, with a majority (58%) of Medical Preparations (mainly drugs), followed by Surgery (13%), Media Devices (10%) and Prostheses (9%). The share of health patent inventors residing in the US is 56% (it is 35% in all families), EU is 27% (32% in all families), and Japan is 11% (28% in all families). The share of the US has been increasing between 1988 and 1995, whereas the share of Japan was shrinking. Internationalisation of research (measured by the share of patents with inventors residing in two or more different countries) has been growing steadily ... Ce document étudie les enseignements qui peuvent être tirés de l’utilisation des brevets pour comprendre différentes dimensions du progrès technique dans les domaines liés à la santé. Les comptages sont bases sur les “familles triadiques de brevets”, qui sont des ensembles de brevets couvrant une même invention, demandés à la fois en Europe, aux États-Unis et au Japon. Il y a eu environ 40 000 familles de brevets demandées au cours de la période 1988-1995, soit 16% du nombre total de familles, avec une majorité (58%) de Préparations médicales (principalement des médicaments), suivies par la Chirurgie (13%), les Dispositifs d’introduction (10%) et les Prothèses (9%). La part des inventeurs de brevets liés à la santé résidant aux États-Unis est de 56% (elle est de 35% pour l’ensemble des familles), la part de l’UE est de 27% (32% pour l’ensemble des familles), et celle du Japon est de 11% (28% pour l’ensemble des familles). La part des États-Unis s’est accrue entre 1988 et ...

Drug competition and voluntary exit

We use a duration model to find evidence that drug exit is exacerbated by generic competition. However, the impact on drug exit of competition with other branded drugs within a drug's therapeutic class is not statistically significant.Drug competition Drug exit Survival data analysis

Total factor productivity growth in Singapore’s service industries

This paper examines and analyses the TFPG performance of individual service industries in Singapore. TFPG of services were highly cyclical, indicating the overwhelming vagaries of external demand in this small and open economy. Although the TFPG of most services were dismal during 1976‐93, the rates were higher for the post‐1985 recession period, compared with those in the pre‐1985 recession years. This trend reflects the Government’s concerted efforts to upgrade the workforce and promote higher technology services. Besides, the service industries which did not conform to this trend had in common massive infrastructural investments which were primarily undertaken by government‐linked enterprises with a longer‐term interest of the economy at large. Thus it seems that the paternal role of government has a vital influence on Singapore’s TFPG performance. The study implies that the role of government could constitute an important factor in the estimation of TFPG, and in comparing TFPG among economies where government roles differ significantly.</jats:p

NBER WORKING PAPER SERIES PHARMACEUTICAL EMBODIED TECHNICAL PROGRESS, LONGEVITY, AND QUALITY OF LIFE: DRUGS AS “EQUIPMENT FOR YOUR HEALTH”

notice, is given to the source. Pharmaceutical-embodied technical progress, longevity, and quality of life: drugs as “equipment for your health