Article

Empirical Evidence on the Value of Pharmaceuticals

Craig Garthwaite and Mark Duggan

in The Oxford Handbook of the Economics of the Biopharmaceutical Industry

Published in print April 2012 | ISBN: 9780199742998
Published online September 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780199742998.013.0015

Series: Oxford Handbooks

 Empirical Evidence on the Value of Pharmaceuticals

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  • Economics
  • Health, Education, and Welfare
  • Econometric and Statistical Methods and Methodology: General

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This article begins by summarizing the existing evidence concerning the effect of pharmaceuticals on overall health. It then examines evidence of the health benefits of pharmaceuticals for the most commonly used treatments for widespread chronic and life-threatening conditions. It focuses on the most widespread conditions and those for which the utilization of prescription medication has changed the most dramatically over the last two decades. A broader question about the total value of pharmaceuticals involves the net benefit of these medications. There is a growing debate in the literature specifically about whether new drugs are worth more than their costs. The largest debate focuses on whether spending on these new drugs leads to even larger decreases in nonprescription drug spending whether the new drugs are cost-effective (i.e., providing enough health benefits to outweigh their costs relative to an alternative treatment method), or neither. The article considers existing evidence on the net benefits of these medications in terms of cost savings from nondrug health spending. Finally, it discusses the growing body of literature focusing on the nonhealth benefits of pharmaceuticals.

Keywords: health effects; health benefits; prescription drugs; new drugs; nonhealth benefits

Article.  13811 words. 

Subjects: Economics ; Health, Education, and Welfare ; Econometric and Statistical Methods and Methodology: General

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