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Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs

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Listed:
  • Margaret Kyle
  • Heidi L. Williams

Abstract

Alan Garber and Jonathan Skinner (2008) famously conjectured that the US health care system was “uniquely inefficient” relative to other countries. We test this idea using cross-country data on prescription drug sales newly linked with an arguably objective measure of relative therapeutic benefits, or drug quality. Specifically, we investigate how higher and lower quality drugs diffuse in the US relative to Australia, Canada, Switzerland, and the UK. Our tabulations suggest that lower quality drugs diffuse more in the US relative to high quality drugs, compared to each of our four comparison countries – consistent with Garber and Skinner’s conjecture.

Suggested Citation

  • Margaret Kyle & Heidi L. Williams, 2017. "Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs," NBER Working Papers 23068, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:23068
    Note: AG HC PR
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    Cited by:

    1. Joshua L. Krieger & Danielle Li & Dimitris Papanikolaou, 2018. "Developing Novel Drugs," NBER Working Papers 24595, National Bureau of Economic Research, Inc.

    More about this item

    JEL classification:

    • H51 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Health
    • I1 - Health, Education, and Welfare - - Health
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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