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The Impact of Pharmaceutical Innovation on Premature Cancer Mortality in Canada, 2000-2011

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  • Frank R. Lichtenberg

Abstract

The premature cancer mortality rate has been declining in Canada, but there has been considerable variation in the rate of decline across cancer sites. I analyze the effect that pharmaceutical innovation had on premature cancer mortality in Canada during the period 2000-2011, by investigating whether the cancer sites that experienced more pharmaceutical innovation had larger declines in the premature mortality rate, controlling for changes in the incidence rate. The estimates imply that pharmaceutical innovation during the period 1985-1996 reduced the number of years of potential life lost to cancer before age 75 in 2011 by 105,366. The cost per life-year before age 75 gained from previous pharmaceutical innovation is estimated to have been 2730 USD. The evidence suggests that, even if these drugs had been sold at branded rather than generic prices, the cost per life-year gained would have been below 11,000 USD, a figure well below even the lowest estimates of the value of a life-year gained.

Suggested Citation

  • Frank R. Lichtenberg, 2015. "The Impact of Pharmaceutical Innovation on Premature Cancer Mortality in Canada, 2000-2011," NBER Working Papers 21239, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21239
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    1. Frank R. Lichtenberg, 2014. "Has Medical Innovation Reduced Cancer Mortality?," CESifo Economic Studies, CESifo Group, vol. 60(1), pages 135-177.
    2. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211, December.
    3. Lichtenberg, Frank R., 2014. "The impact of pharmaceutical innovation on longevity and medical expenditure in France, 2000–2009," Economics & Human Biology, Elsevier, vol. 13(C), pages 107-127.
    4. Frank Lichtenberg, 2009. "The effect of new cancer drug approvals on the life expectancy of American cancer patients, 1978-2004," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 18(5), pages 407-428.
    5. Jalan, Jyotsna & Ravallion, Martin, 2003. "Does piped water reduce diarrhea for children in rural India?," Journal of Econometrics, Elsevier, vol. 112(1), pages 153-173, January.
    6. Bo E. Honoré & Adriana Lleras-Muney, 2006. "Bounds in Competing Risks Models and the War on Cancer," Econometrica, Econometric Society, vol. 74(6), pages 1675-1698, November.
    7. Richard A. Hirth & Michael E. Chernew & Edward Miller & A. Mark Fendrick & William G. Weissert, 2000. "Willingness to Pay for a Quality-adjusted Life Year," Medical Decision Making, , vol. 20(3), pages 332-342, July.
    8. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 71-102, October.
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    Cited by:

    1. Kyle, Margaret & Dubois, Pierre, 2016. "The Effects of Pharmaceutical Innovation on Cancer Mortality," CEPR Discussion Papers 11487, C.E.P.R. Discussion Papers.
    2. Frank R. LICHTENBERG, 2018. "The Impact of New Drug Launch on Life-Years Lost in 2015 from 19 Types of Cancer in 36 Countries," JODE - Journal of Demographic Economics, Cambridge University Press, vol. 84(3), pages 309-354, September.
    3. Jeon, Sung-Hee & Pohl, R. Vincent, 2019. "Medical innovation, education, and labor market outcomes of cancer patients," Journal of Health Economics, Elsevier, vol. 68(C).
    4. Kalcheva, Ivalina & McLemore, Ping & Pant, Shagun, 2018. "Innovation: The interplay between demand-side shock and supply-side environment," Research Policy, Elsevier, vol. 47(2), pages 440-461.
    5. Frank R. Lichtenberg, 2017. "The impact of pharmaceutical innovation on cancer mortality in Mexico, 2003–2013," Latin American Economic Review, Springer;Centro de Investigaciòn y Docencia Económica (CIDE), vol. 26(1), pages 1-22, December.
    6. 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.
    7. Dubois, Pierre & Kyle, Margaret, 2016. "The Effects of Pharmaceutical Innovation on Cancer Mortality Rates," TSE Working Papers 16-688, Toulouse School of Economics (TSE).

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    More about this item

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • I10 - Health, Education, and Welfare - - Health - - - General
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J17 - Labor and Demographic Economics - - Demographic Economics - - - Value of Life; Foregone Income
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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