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Cost-Offsets of New Medications for Treatment of Schizophrenia

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  • Richard G. Frank
  • Thomas G. McGuire
  • Sharon-Lise Normand
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    Abstract

    Broad claims are frequently made that new medications will offset all or part of their costs by reducing other areas of Medicaid spending. In this paper we examine the net impact on spending for new drugs used to treat schizophrenia. We extend research in this area by taking a new approach to identification of spending impacts of new drugs. We specify and estimate models of spending on treatment of schizophrenia using 7 years of Florida Medicaid data. The estimates indicate that use of the new drugs result in net spending increases. This may be due to increased adherence to treatment.

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    File URL: http://www.nber.org/papers/w12643.pdf
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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12643.

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    Date of creation: Oct 2006
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    Handle: RePEc:nbr:nberwo:12643

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    1. 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.
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    Cited by:
    1. Aizcorbe, Ana & Nestoriak, Nicole, 2011. "Changing mix of medical care services: Stylized facts and implications for price indexes," Journal of Health Economics, Elsevier, vol. 30(3), pages 568-574, May.
    2. Rowena Jacobs, 2009. "Investigating Patient Outcome Measures in Mental Health," Working Papers 048cherp, Centre for Health Economics, University of York.
    3. Law, Michael R. & Grépin, Karen A., 2010. "Is newer always better? Re-evaluating the benefits of newer pharmaceuticals," Journal of Health Economics, Elsevier, vol. 29(5), pages 743-750, September.

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