TY  - JOUR
AU  - Lichtenberg,Frank
TI  - Benefits and Costs of Newer Drugs: An Update
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8996
PY  - 2002
Y2  - June 2002
UR  - http://www.nber.org/papers/w8996
L1  - http://www.nber.org/papers/w8996.pdf
N1  - Author contact info:
Frank R. Lichtenberg
Columbia University
504 Uris Hall
3022 Broadway
New York, NY  10027
Tel: 212/854-4408
Fax: (212) 854-9895
E-Mail: frl1@columbia.edu
M2  - featured in NBER digest on 2002-10-01
AB  - We update and extend our previous study of the effect of drug age -- years since FDA approval -- on total medical expenditure, in several respects.  The estimates indicate that, in the entire population, a reduction in the age of drugs utilized reduces non-drug expenditure 7.2 times as much as it increases drug expenditure.  In the Medicare population, a reduction in the age of drugs utilized reduces non-drug expenditure by all payers 8.3 times as much as it increases drug expenditure; it reduces Medicare non-drug expenditure 6.0 times as much as it increases drug expenditure.  About two-thirds of the non-drug Medicare cost reduction is due to reduced hospital costs.  The remaining third is approximately evenly divided between reduced Medicare home health care cost and reduced Medicare office-visit cost. We also found that the mean age of drugs used by Medicare enrollees with private Rx insurance is about 9% lower than the mean age of drugs used by Medicare enrollees without either private or public Rx insurance.
ER  -