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The risk we bear: The effects of review speed and industry user fees on new drug safety

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  • Olson, Mary K.

Abstract

Drug review speed has increased substantially in the 1990s, largely due to industry-funded user fees. Following several drug withdrawals, however, new questions have emerged about the effects of this change on drug safety. This article examines the impact of review speed and user fees on counts of serious adverse reactions among drugs approved in 1990-2001. The analysis controls for the influence of drug utilization, patient conditions, drug novelty, black box warnings, foreign drug launch, US launch lags, patient age, and gender on drug reactions. Results show that drugs receiving faster reviews are associated with increased counts of serious adverse drug reactions. Other results show that novel drugs, drugs with black box warnings, drugs first launched abroad, and drugs with shorter US launch lags also have increased adverse drug reactions. Although any increase in risks must be weighed against benefits, the results show a trade-off between review speed and drug safety.

Suggested Citation

  • Olson, Mary K., 2008. "The risk we bear: The effects of review speed and industry user fees on new drug safety," Journal of Health Economics, Elsevier, vol. 27(2), pages 175-200, March.
  • Handle: RePEc:eee:jhecon:v:27:y:2008:i:2:p:175-200
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    References listed on IDEAS

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    1. Mary K. Olson, 2002. "Pharmaceutical Policy Change and the Safety of New Drugs," Journal of Law and Economics, University of Chicago Press, vol. 45(S2), pages 615-642.
    2. Peltzman, Sam, 1987. "The Health Effects of Mandatory Prescriptions," Journal of Law and Economics, University of Chicago Press, vol. 30(2), pages 207-238, October.
    3. Olson, Mary K., 2004. "Are novel drugs more risky for patients than less novel drugs?," Journal of Health Economics, Elsevier, vol. 23(6), pages 1135-1158, November.
    4. Frank R. Lichtenberg, 2005. "Pharmaceutical Knowledge-Capital Accumulation and Longevity," NBER Chapters,in: Measuring Capital in the New Economy, pages 237-274 National Bureau of Economic Research, Inc.
    5. Allan Begosh & John Goldsmith & Ed Hass & Randall W. Lutter & Clark Nardinelli & John A. Vernon, 2006. "Black Box Warnings and Drug Safety: Examining the Determinants and Timing of FDA Warning Labels," NBER Working Papers 12803, National Bureau of Economic Research, Inc.
    6. Mary K. Olson, 1997. "Firm Characteristics and the Speed of FDA Approval," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 377-401, June.
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    Cited by:

    1. Hostenkamp, Gisela & Lichtenberg, Frank R., 2015. "The impact of recent chemotherapy innovation on the longevity of myeloma patients: US and international evidence," Social Science & Medicine, Elsevier, vol. 130(C), pages 162-171.
    2. Mary Olson, 2013. "Eliminating the U.S. drug lag: Implications for drug safety," Journal of Risk and Uncertainty, Springer, vol. 47(1), pages 1-30, August.
    3. repec:spr:drugsa:v:40:y:2017:i:6:d:10.1007_s40264-017-0526-1 is not listed on IDEAS
    4. 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.
    5. Simone Ghislandi & Michael Kuhn, 2016. "Asymmetric information in the regulation of the access to markets," Department of Economics Working Papers wuwp219, Vienna University of Economics and Business, Department of Economics.
    6. Hostenkamp, Gisela & Fischer, Katharina Elisabeth & Borch-Johnsen, Knut, 2016. "Drug safety and the impact of drug warnings: An interrupted time series analysis of diabetes drug prescriptions in Germany and Denmark," Health Policy, Elsevier, vol. 120(12), pages 1404-1411.

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