NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

New Drugs and HIV Mortality

"The increased use of these four new treatments was responsible for more than 90 percent of the 1995-8 drop in the mortality rate... the cost per life-year saved was approximately $22,000."

From 1991 to 1995, HIV/AIDS was the leading cause of death among men between the ages of 25 and 44 in the United States and. The disease was the eighth -leading cause of death overall. In a four-month period from November 1995 through March of 1996, the U.S. Food and Drug Administration (FDA) approved fourour new prescription drugs -- Epivir and the first three protease inhibitors -- for the treatment of the diseaseof this illness, starting in November 1995 and through June 1996, which doubled the number of available treatments. The new prescription drugs reduced the viral load in patients and increased the concentration of a type of blood cell critical for fighting off infections. . These new treatments reduce the replication of the HIV virus in patients and thereby increase the concentration of a type of blood cell critical for fighting off infections. The use of these new drugsEpivir and the first three protease inhibitors spread rapidly, and. Bby the end of 1996, almost 60 percent of HIV/AIDS patients were using one or more of these four new agents. and Mmortality rates fell by nearly 70 percent from 1995 to 1998. what are called protease inhibitors, drugs with an ability to reduce the replication of the HIV virus in patients and thereby increase the concentration of a type of blood cells critical for fighting off infections. As a result, mortality among AIDS patients fell by 70 percent from 1995 to 1998.

"Despite a decline in infection rates, the number of individuals living with this illness continued to rise because of the increase in life expectancy," note Mark Duggan and William Evans in Estimating the Impact of Medical Innovation: The Case of HIV Antiretroviral Treatments (NBER Working Paper No. 11109). Their study finds that the increased in the use of these four new treatments drugs - Epivir and three protease inhibitors - was responsible for more than 90 percent of the 1995-8 drop in the mortality rate. Although the FDA has approved more than a dozen additional drugs for treatment of the disease in the last nine years, mortality rates have remained virtually unchanged.

Duggan and Evans use data for the 1993-2003 period from a sample of more than 10,000 Medicaid recipients living in California who were diagnosed with HIV/AIDS. ASince approximately half of U.S. residents diagnosed with AIDS are enrolled in getting financial help from Medicaid., the sample is broadly representative. No prior study has examined as large a sample of patients for as long a time period, that is, 11 years. Theiry findings demonstrate that the most severely ill patients were significantly more likely to take the drugs and that these patients experienced thethe greatest reductions in absolute mortality were among the most severe cases of the diseasemortality. While mortality rates among men were 80% percent higher than among women before the new treatments were introduced, these differences almost disappeared during the next two years because of the greater utilization of the treatments by men.

The use of the new drugs also reduced hospital admission rates for patients with HIV/AIDSthe number of thus the costs of hospital admissionsthe time, and thus the cost, of keeping patients in a hospital for these patients.

NonethelessEven with the reduction in hospital spending, the introduction of these drugs led to a threefold increase in total Medicaid spending during the life of patients. This ihat's because the drugs have a high cost and the patients had longer durations on the program because of their greater life expectancy. s on them lived longer. Their authors' simulations suggest that lifetime Medicaid spending for the average patient increased by more than $200,000.In a six-year period, the average number of months in which a patient was eligible for treatment with these drugs rose from 31.5 months to 51.3 months. Despite this, they authors conclude, the new treatments with Epivir andEpivir and the original first three protease inhibitors were cost effective, based on the value of a year of life. Their findings suggest the cost per life-year saved was approximately $22,000.

That number is on the low end of estimates of other important medical interventions. However, this cost effectiveness "appears not to be true" for the 15 other drugs the benefit-cost ratio for the prescription drugs approved to treat HIV/AIDS since early 1996 have been less favorable, as prescription drug spending to treat the disease has continued to rise but there has been little further decline in patient mortality

-- David R. Francis


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