Is newer always better? Re-evaluating the benefits of newer pharmaceuticals

Journal of Health Economics
Michael R Law, Karen A Grépin

Abstract

Whether newer pharmaceuticals justify their higher costs by reducing other health expenditures has generated significant debate. We replicate a frequently cited paper by Lichtenberg on drug "offsets" and find the results disappear using a more appropriate model or updated dataset. Further, we test the suitability of similar methods using newer hypertension drugs. We find our observational results run counter to well-established clinical evidence on comparative efficacy and conclude that our model, as well as other studies that do not adequately control for unobserved characteristics that jointly determine drug choice and health expenditures, are likely subject to significant bias.

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Citations

Mar 1, 2012·Gaceta sanitaria·M Jesús Segura BenitoFrancisco Escribano Sotos
Dec 12, 2018·Current Opinion in Anaesthesiology·Betty E Thomas, Thomas Ledowski
Mar 1, 2019·Current Opinion in Anaesthesiology·Betty E Thomas, Thomas Ledowski

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