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The benefits of switching smoking cessation drugs to over‐the‐counter status

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Listed:
  • Theodore E. Keeler
  • Teh‐wei Hu
  • Alison Keith
  • Richard Manning
  • Martin D. Marciniak
  • Michael Ong
  • Hai‐Yen Sung

Abstract

This paper provides an analysis of the benefits to society from the conversion of nicotine replacement drugs (nicotine patches and gum) in 1996 from sale by prescription only in the United States to over‐the‐counter (OTC) sales. To estimate these benefits, we first estimate statistical demand functions for nicotine patches and gum. Second, we calculate the effects of OTC conversion on sales of each type of nicotine replacement drug. Third, we survey the literature on the effects of nicotine replacement drugs on total quits of cigarette smoking. Fourth, we survey the literature on the effects of quits achieved on expected lifespan, and on the estimated monetary value of longer lives from smoking cessation. Finally, we use all this evidence to calculate the value of the social benefits of the OTC conversion to the US. As a result of the OTC conversion, consumption of nicotine replacement drugs has increased substantially, by 78–92% for nicotine patches and 180% for nicotine gum. We estimate that the resulting increase in smoking cessation generated annual net social benefits of the order of magnitude of $1.8–2 billion, based on conservative estimates both of the number of quits achieved and the value of added quality‐adjusted life years from the reduced smoking. Copyright © 2002 John Wiley & Sons, Ltd.

Suggested Citation

  • Theodore E. Keeler & Teh‐wei Hu & Alison Keith & Richard Manning & Martin D. Marciniak & Michael Ong & Hai‐Yen Sung, 2002. "The benefits of switching smoking cessation drugs to over‐the‐counter status," Health Economics, John Wiley & Sons, Ltd., vol. 11(5), pages 389-402, July.
    • Handle: RePEc:wly:hlthec:v:11:y:2002:i:5:p:389-402
    DOI: 10.1002/hec.677
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    References listed on IDEAS

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    1. Keeler, Theodore E. & Hu, Teh-wei & Barnett, Paul G. & Manning, Willard G. & Sung, Hai-Yen, 1996. "Do cigarette producers price-discriminate by state? An empirical analysis of local cigarette pricing and taxation," Journal of Health Economics, Elsevier, vol. 15(4), pages 499-512, August.
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    3. Temin, Peter, 1983. "Costs and benefits in switching drugs from Rx to OTC," Journal of Health Economics, Elsevier, vol. 2(3), pages 187-205, December.
    4. Temin, Peter, 1992. "Realized Benefits from Switching Drugs," Journal of Law and Economics, University of Chicago Press, vol. 35(2), pages 351-369, October.
    5. Hays, J.T. & Croghan, I.T. & Schroeder, D.R. & Offord, K.P. & Hurt, R.D. & Wolter, T.D. & Nides, M.A. & Davidson, M., 1999. "Over-the-counter nicotine patch therapy for smoking cessation: Results from randomized, double-blind, placebo-controlled, and open label trials," American Journal of Public Health, American Public Health Association, vol. 89(11), pages 1701-1707.
    6. Halvorsen, Robert & Palmquist, Raymond, 1980. "The Interpretation of Dummy Variables in Semilogarithmic Equations," American Economic Review, American Economic Association, vol. 70(3), pages 474-475, June.
    7. David M. Cutler & Elizabeth Richardson, 1997. "Measuring the Health of the U.S. Population," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(1997 Micr), pages 217-282.
    8. Hu, T.-W. & Sung, H.-Y. & Keeler, T.E., 1995. "Reducing cigarette consumption in California: Tobacco taxes vs an anti- smoking media campaign," American Journal of Public Health, American Public Health Association, vol. 85(9), pages 1218-1222.
    9. Sloan,Frank A. (ed.), 1996. "Valuing Health Care," Cambridge Books, Cambridge University Press, number 9780521576468.
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    Cited by:

    1. Robert W. Paterson & Kevin J. Boyle & Christopher F. Parmeter & James E. Neumann & Paul De Civita, 2008. "Heterogeneity in preferences for smoking cessation," Health Economics, John Wiley & Sons, Ltd., vol. 17(12), pages 1363-1377, December.
    2. Joachim Marti, 2012. "Assessing preferences for improved smoking cessation medications: a discrete choice experiment," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 13(5), pages 533-548, October.
    3. Michael R. Richards & Joachim Marti & Johanna Catherine Maclean & Jason Fletcher & Donald Kenkel, 2017. "Tobacco Control, Medicaid Coverage, and the Demand for Smoking Cessation Drugs," American Journal of Health Economics, University of Chicago Press, vol. 3(4), pages 528-549, Fall.
    4. Johanna Catherine Maclean & Michael F. Pesko & Steven C. Hill, 2017. "The Effect of Insurance Expansions on Smoking Cessation Medication Prescriptions: Evidence from ACA Medicaid Expansions," NBER Working Papers 23450, National Bureau of Economic Research, Inc.
    5. Rosemary Avery & Donald Kenkel & Dean Lillard & Alan Mathios, 2007. "Regulating advertisements: the case of smoking cessation products," Journal of Regulatory Economics, Springer, vol. 31(2), pages 185-208, April.
    6. Shiffman, Saul & Sweeney, Christine T., 2008. "Ten years after the Rx-to-OTC switch of nicotine replacement therapy: What have we learned about the benefits and risks of non-prescription availability?," Health Policy, Elsevier, vol. 86(1), pages 17-26, April.
    7. Robert W. Paterson & Kevin J. Boyle & Christopher F. Parmeter & James E. Neumann & Paul De Civita, 2008. "Heterogeneity in preferences for smoking cessation," Health Economics, John Wiley & Sons, Ltd., vol. 17(12), pages 1363-1377.

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