IDEAS home Printed from https://ideas.repec.org/a/aea/aejapp/v4y2012i3p116-37.html
   My bibliography  Save this article

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

Author

Listed:
  • Craig L. Garthwaite

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).

Suggested Citation

  • Craig L. Garthwaite, 2012. "The Economic Benefits of Pharmaceutical Innovations: The Case of Cox-2 Inhibitors," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 116-137, July.
    • Handle: RePEc:aea:aejapp:v:4:y:2012:i:3:p:116-37
    Note: DOI: 10.1257/app.4.3.116
    as

    Download full text from publisher

    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.4.3.116
    Download Restriction: no
    File URL: http://www.aeaweb.org/aej/app/data/2010-0292_data.zip
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.
    ---><---

    References listed on IDEAS

    as
    1. Steven Haider & David Loughran, 2001. "Elderly Labor Supply: Work or Play?," Working Papers 01-09, RAND Corporation.
    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. Joseph F. Quinn, 1999. "Has the Early Retirement Trend Reversed?," Boston College Working Papers in Economics 424, Boston College Department of Economics.
    4. Harsha Thirumurthy & Joshua Graff Zivin & Markus Goldstein, 2008. "The Economic Impact of AIDS Treatment: Labor Supply in Western Kenya," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 511-552.
    5. 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.
    6. 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.
    7. Steven Haider & David S Loughran, 2001. "Elderly Labor Supply Work or Play?," Working Papers DRU-2582, RAND Corporation.
    8. 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.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Alan L. Gustman & Thomas L. Steinmeier, 2004. "Minimum Hours Constraints, Job Requirements and Retirement," NBER Working Papers 10876, National Bureau of Economic Research, Inc.
    2. Steven J. Haider & David S. Loughran, 2003. "How Important Are Wages to the Elderly? Evidence from the New Beneficiary Data System and the Social Security Earnings Test," Working Papers wp049, University of Michigan, Michigan Retirement Research Center.
    3. Richard L. Johnson, 2002. "The puzzle of later male retirement," Economic Review, Federal Reserve Bank of Kansas City, vol. 87(Q III), pages 5-26.
    4. Alicia H. Munnell & Steven A. Sass, 2007. "The Labor Supply of Older Americans," Working Papers, Center for Retirement Research at Boston College wp2007-12, Center for Retirement Research, revised Jun 2007.
    5. Rodrigo R. Soares & Rudi Rocha & Michel Szklo, 2021. "American Delusion: Life Expectancy and Welfare in the US from an International Perspective," Working Papers 13, Instituto de Estudos para Políticas de Saúde.
    6. Gasparini, Leonardo & Alejo, Javier & Haimovich, Francisco & Olivieri, Sergio & Tornarolli, Leopoldo, 2007. "Poverty among the Elderly in Latin America and the Caribbean," MPRA Paper 42957, University Library of Munich, Germany.
    7. Huber, Martin & Lechner, Michael & Wunsch, Conny, 2013. "The Effect of Firms' Partial Retirement Policies on the Labour Market Outcomes of Their Employees," IZA Discussion Papers 7513, Institute of Labor Economics (IZA).
    8. Baranov, Victoria & Bennett, Daniel & Kohler, Hans-Peter, 2015. "The indirect impact of antiretroviral therapy: Mortality risk, mental health, and HIV-negative labor supply," Journal of Health Economics, Elsevier, vol. 44(C), pages 195-211.
    9. Volha Lazuka, 2022. "Household and individual economic responses to different health shocks: The role of medical innovations," Papers 2206.03306, arXiv.org, revised Nov 2022.
    10. Zissimopoulos, Julie M. & Karoly, Lynn A., 2007. "Transitions to self-employment at older ages: The role of wealth, health, health insurance and other factors," Labour Economics, Elsevier, vol. 14(2), pages 269-295, April.
    11. de Breij, Sascha & Huisman, Martijn & Deeg, Dorly J.H., 2020. "Macro-level determinants of post-retirement health and health inequalities: A multilevel analysis of 18 European countries," Social Science & Medicine, Elsevier, vol. 245(C).
    12. Vere, James P., 2011. "Social Security and elderly labor supply: Evidence from the Health and Retirement Study," Labour Economics, Elsevier, vol. 18(5), pages 676-686, October.
    13. Alicia H. Munnell & Dan Muldoon & Steven A. Sass, 2009. "Recessions and Older Workers," Issues in Brief ib2009-9-2, Center for Retirement Research, revised Jan 2009.
    14. Lynn A. Karoly & Julie Zissimopoulos, 2004. "Self-Employment Trends and Patterns Among Older U.S. Workers," Working Papers 136, RAND Corporation.
    15. Oliver Fritz & Peter Mayerhofer & Reinhard Haller & Gerhard Streicher & Florian Bachner & Herwig Ostermann, 2013. "Die regionalwirtschaftlichen Effekte der österreichischen Krankenanstalten," WIFO Studies, WIFO, number 46672, April.
    16. Nicole Maestas & Kathleen Mullen & David Powell, 2013. "The Effect of Local Labor Demand Conditions on the Labor Supply Outcomes of Older Americans," Discussion Papers 13-014, Stanford Institute for Economic Policy Research.
    17. Zissimopoulos, Julie M. & Karoly, Lynn A., 2007. "Transitions to self-employment at older ages: The role of wealth, health, health insurance and other factors," Labour Economics, Elsevier, pages 269-295.
    18. Attila Cseh, 2008. "The Effects of Depressive Symptoms on Earnings," Southern Economic Journal, John Wiley & Sons, vol. 75(2), pages 383-409, August.
    19. Calvo, Esteban & Haverstick, Kelly & Sass, Steven, 2007. "What Makes Retirees Happier: A Gradual or 'Cold Turkey' Retirement?," MPRA Paper 5607, University Library of Munich, Germany.
    20. Sinem Kilic Celik & M. Ayhan Kose & Franziska Ohnsorge & F. Ulrich Ruch, 2023. "Potential Growth: A Global Database," CAMA Working Papers 2023-20, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.

    More about this item

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. The Economic Benefits of Pharmaceutical Innovations: The Case of Cox-2 Inhibitors (American Economic Journal: Applied Economics 2012) in ReplicationWiki

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aea:aejapp:v:4:y:2012:i:3:p:116-37. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael P. Albert (email available below). General contact details of provider: https://edirc.repec.org/data/aeaaaea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.