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Eliminating the U.S. drug lag: Implications for drug safety

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  • Mary Olson

Abstract

An increase in new drugs first launched in the U.S. and shorter lags between first global drug launch and U.S. approval indicate that the U.S. drug lag has declined. This paper examines the impact of these changes on drug safety using adverse drug reaction data for FDA-approved drugs in 1990 to 2004. Results show two different effects. First, drugs having longer U.S. launch lags (more foreign market experience) have fewer post approval drug risks compared to drugs with shorter launch lags. This result implies that foreign market experience prior to U.S. entry provides information to help alleviate drug-related risks for U.S. patients. Second, drugs that are first launched in the U.S. have fewer serious drug reactions compared to those that were first launched abroad. This result is surprising, and may suggest that first U.S. drug launch signals information about unobserved application quality, which translates into lower post approval drug risks. Copyright Springer Science+Business Media New York 2013

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  • Mary Olson, 2013. "Eliminating the U.S. drug lag: Implications for drug safety," Journal of Risk and Uncertainty, Springer, vol. 47(1), pages 1-30, August.
    • Handle: RePEc:kap:jrisku:v:47:y:2013:i:1:p:1-30
    DOI: 10.1007/s11166-013-9169-5
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    References listed on IDEAS

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    2. Margaret Kyle Author-Email: mkyle@london.edu Author-Workplace-Name: London Business School, 2006. "The Role of Firm Characteristics in Pharmaceutical Product Launches," RAND Journal of Economics, The RAND Corporation, vol. 37(3), pages 602-618, Autumn.
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    6. Margaret K. Kyle, 2006. "The role of firm characteristics in pharmaceutical product launches," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 602-618, September.
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    Cited by:

    1. W. Kip Viscusi & Richard J. Zeckhauser, 2015. "Regulating Ambiguous Risks: The Less than Rational Regulation of Pharmaceuticals," The Journal of Legal Studies, University of Chicago Press, vol. 44(S2), pages 387-422.
    2. Anna Chorniy & James Bailey & Abdulkadir Civan & Michael Maloney, 2021. "Regulatory review time and pharmaceutical research and development," Health Economics, John Wiley & Sons, Ltd., vol. 30(1), pages 113-128, January.

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    More about this item

    Keywords

    Drug safety; Drug approval; Drug lag; I18; L51;
    All these keywords.

    JEL classification:

    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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