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Pharmaceutical Innovation, Longevity, and Medical Expenditure in Greece, 1995-2010

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  • Frank Lichtenberg

Abstract

Longitudinal, disease-level data are used to analyze the impact of pharmaceutical innovation on longevity (mean age at death), hospital utilization, and medical expenditure in Greece during the period 1995-2010. The estimates indicate that pharmaceutical innovation increased mean age at death by 0.87 years (10.4 months)-—about 44% of the total increase in longevity—-and that diseases with larger increases in the cumulative number of drugs launched 1-4 years earlier had smaller increases in the number of hospital days. Real per capita pharmaceutical expenditure increased rapidly during this period, but 62% of the increase in pharmaceutical expenditure was offset by a reduction in hospital expenditure attributable to pharmaceutical innovation. The baseline estimate of the cost per life-year gained from pharmaceutical innovation in Greece is $17,117, which is a very small fraction of leading economists’ estimates of the value of (or consumers’ willingness to pay for) a one-year increase in life expectancy.

Suggested Citation

  • Frank Lichtenberg, 2015. "Pharmaceutical Innovation, Longevity, and Medical Expenditure in Greece, 1995-2010," CESifo Working Paper Series 5166, CESifo.
    • Handle: RePEc:ces:ceswps:_5166
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    1. Frank R. Lichtenberg & Gautier Duflos, 2008. "Pharmaceutical innovation and the longevity of Australians: A first look," Advances in Health Economics and Health Services Research, in: Beyond Health Insurance: Public Policy to Improve Health, pages 95-117, Emerald Group Publishing Limited.
    2. Frank Lichtenberg, 2009. "The effect of new cancer drug approvals on the life expectancy of American cancer patients, 1978-2004," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(5), pages 407-428.
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    10. Lichtenberg Frank R., 2013. "The Effect of Pharmaceutical Innovation on Longevity: Patient Level Evidence from the 1996–2002 Medical Expenditure Panel Survey and Linked Mortality Public-use Files," Forum for Health Economics & Policy, De Gruyter, vol. 16(1), pages 1-33, January.
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    12. Lichtenberg, Frank R., 2014. "The impact of pharmaceutical innovation on longevity and medical expenditure in France, 2000–2009," Economics & Human Biology, Elsevier, vol. 13(C), pages 107-127.
    13. Frank Lichtenberg, 2013. "The impact of new (orphan) drug approvals on premature mortality from rare diseases in the United States and France, 1999–2007," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 14(1), pages 41-56, February.
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    16. Frank R. Lichtenberg, 2007. "The Impact of New Drugs on US Longevity and Medical Expenditure, 1990–2003: Evidence from Longitudinal, Disease-Level Data," American Economic Review, American Economic Association, vol. 97(2), pages 438-443, May.
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    More about this item

    Keywords

    pharmaceutical; innovation; longevity; Greece; hospital;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe

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