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The Economic Benefits of Pharmaceutical Innovations: The Case of Cox-2 Inhibitors

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  • Craig L. Garthwaite
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    Abstract

    Despite dramatic improvements in medical technology, little attention has been paid to the role of these innovations in improving economic outcomes. This study estimates the labor supply effects of Cox-2 inhibitors, a widely prescribed class of pharmaceuticals used for the treatment of chronic pain and inflammation and primarily marketed under the brand names Vioxx, Celebrex, and Bextra. This paper exploits the removal of Vioxx from the market in 2004 as an exogenous change in drug use. This removal was associated with a 0.35 percentage point decrease in overall labor force participation and $19 billion in lost wages. (JEL I12, J22, L65, O31).

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    Bibliographic Info

    Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

    Volume (Year): 4 (2012)
    Issue (Month): 3 (July)
    Pages: 116-37

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    Handle: RePEc:aea:aejapp:v:4:y:2012:i:3:p:116-37

    Note: DOI: 10.1257/app.4.3.116
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    1. Harsha Thirumurthy & Markus Goldstein & Joshua Graff Zivin, 2005. "The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya," Working Papers id:300, eSocialSciences.
    2. Duggan, Mark, 2005. "Do new prescription drugs pay for themselves?: The case of second-generation antipsychotics," Journal of Health Economics, Elsevier, vol. 24(1), pages 1-31, January.
    3. Bartel, Ann & Taubman, Paul, 1979. "Health and Labor Market Success: The Role of Various Diseases," The Review of Economics and Statistics, MIT Press, vol. 61(1), pages 1-8, February.
    4. Joseph P. Newhouse, 1992. "Medical Care Costs: How Much Welfare Loss?," Journal of Economic Perspectives, American Economic Association, vol. 6(3), pages 3-21, Summer.
    5. Berndt, Ernst R. & Finkelstein, Stan N. & Greenberg, Paul E. & Howland, Robert H. & Keith, Alison & Rush, A. John & Russell, James & Keller, Martin B., 1998. "Workplace performance effects from chronic depression and its treatment," Journal of Health Economics, Elsevier, vol. 17(5), pages 511-535, October.
    6. Steven Haider & David Loughran, 2001. "Elderly Labor Supply: Work or Play?," Working Papers 01-09, RAND Corporation Publications Department.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. “The Economic Benefits of Pharmaceutical Innovations: The Case of Cox-2 Inhibitors,” C. Garthwaite (2012)
      by afinetheorem in A Fine Theorem on 2013-03-20 07:37:41
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    Cited by:
    1. Timothy J. Moore, 2014. "The Employment Effect of Terminating Disability Benefits," NBER Working Papers 19793, National Bureau of Economic Research, Inc.
    2. Rodrigo Camejo & Clare McGrath & Marisa Miraldo & Frans Rutten, 2014. "Distribution of health-related social surplus in pharmaceuticals: an estimation of consumer and producer surplus in the management of high blood lipids and COPD," The European Journal of Health Economics, Springer, vol. 15(4), pages 439-445, May.
    3. Collins, J. Michael & Simon, Kosali I. & Tennyson, Sharon, 2013. "Drug withdrawals and the utilization of therapeutic substitutes: The case of Vioxx," Journal of Economic Behavior & Organization, Elsevier, vol. 86(C), pages 148-168.

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