nep-hea New Economics Papers
on Health Economics
Issue of 2015‒05‒09
twelve papers chosen by
Yong Yin
SUNY at Buffalo

  1. Patent Monopolies and the Costs of Mismarketing Drugs By Ravi Katari, Dean Baker
  2. Enhancing Translational Research and Clinical Development for Alzheimer's Disease and other Dementias By OECD
  3. An equilibrium model estimated on pharmaceutical data By Dalen, Dag Morten; Locatelli, Marilena; Strom, Steinar
  4. Early intervention and child health: Evidence from a Dublin-based randomized controlled trial By Orla Doyle; Nick Fitzpatrick; Judy Lovett; Caroline Rawdon
  5. Intellectual Property Protection And Drug Plan Coverage: Evidence From Ontario By Paul Grootendorst; Minsup Shim; Adam Falconi; Tyler Robinson; Ethar Ismail; Joel Lexchin
  6. All-Cause Mortality Reductions from Measles Catchup Campaigns in Africa By Ariel BenYishay; Keith Kranker
  7. Infant Health and Longevity: Evidence from a Historical Trial in Sweden By Bhalotra, Sonia; Karlsson, Martin
  8. A New Priority for Mental Health By Richard Layard
  9. Is it reasonable to subsidize healthcare in Developing Nations? A question purely from the growth perspective By Chaudhuri, Sarbajit
  10. Does Government Health Insurance Reduce Job Lock and Job Push? By Barkowski, Scott
  11. Aspirations, Health and the Cost of Inequality By Allen, Jeffrey; Chakraborty, Shankha
  12. Mortality and Longevity Risks in the United Kingdom: Dynamic Factor Models and Copula-Functions By Helena Chuliá; Montserrat Guillén; Jorge M. Uribe

  1. By: Ravi Katari, Dean Baker
    Abstract: Patent monopolies have long been used as a mechanism for financing innovation and research. The logic is that the government awards a monopoly on a product or process for a limited period of time in order to reward innovation. However, in addition to providing incentives for innovation and research, patent monopolies also provide incentives for a wide-range of rent-seeking behaviors, many of which can have major social costs. This paper attempts to calculate one category of these costs for prescription drugs. It produces estimates of the costs associated with mismarketing drugs. The estimates are based on assessments of the costs in the form of increased morbidity and mortality associated with five prominent cases of mismarketing over the last two decades.
    Keywords: trade deficit, pharmaceuticals, off-label, rent-seeking, mismarketing, Vioxx, Avandia, Bextra, OxyContin, Zyprexa, Pfizer, Merck, GlaxoSmithKline, Eli Lilly, Purdue
    JEL: I I1
    Date: 2015–04
  2. By: OECD
    Abstract: Accelerating innovation for Alzheimer’s disease and other dementias is a key challenge. Over the past few years, the OECD has conducted work in a number of areas related to innovation in biomedical research and health innovation for healthy ageing. The workshop aimed to provide an international forum for all stakeholders to drive forward a change in the global paradigm in biomedical research and health innovation for Alzheimer’s disease and other dementias. Discussions at the workshop have shown that progress on key issues is being made, thanks to a willingness of stakeholders to join forces and work together towards a future cure. In line with recommendations of the G8 Dementia Summit Declaration to strengthen collaboration for innovation and cross-sector partnerships this report considers the challenges and options to promote and accelerate research in dementia and its transformation into innovative therapies and diagnostics.
    Date: 2015–04–22
  3. By: Dalen, Dag Morten; Locatelli, Marilena; Strom, Steinar (University of Turin)
    Abstract: The purpose of this paper is to estimate to what extent patients/doctors respond to prices when making a choice between a brand name product and its generics, and also how pharmacies respond to government regulation and to prices set by brand name producers. Data is unique in the sense that we observe prices set by pharmacies as well as by producers. We have estimated the demand side, but also jointly the demand side and the price setting by retailers/wholesalers and producers. Results confirm that estimating only the demand side yields biased estimates. Taking the whole data generating process into account we find much stronger price responses.
    Date: 2015–04
  4. By: Orla Doyle (UCD School of Economics and UCD Geary Institute for Public Policy, University College Dublin); Nick Fitzpatrick (UCD Geary Institute for Public Policy, University College Dublin); Judy Lovett (UCD Geary Institute for Public Policy, University College Dublin); Caroline Rawdon (UCD School of Psychology, University College Dublin)
    Abstract: This article investigates the impact of an early intervention program, which experimentally modifies the parenting and home environment of disadvantaged families, on child health in the first 3 years of life. We recruited and randomized 233 (115 intervention, 118 control) pregnant women from a socioeconomically disadvantaged community in Dublin, Ireland into an intervention or control group. The treatment includes regular home visits commencing antenatally and an additional parenting course commencing at 2 years. Maternal reports of child health are assessed at 6, 12, 18, 24, and 36 months. Treatment effects are estimated using permutation testing to account for small sample size, inverse probability weighting to account for differential attrition, and the stepdown procedure to account for multiple hypothesis testing. Following adjustment for multiple testing and attrition, we observe a positive and statistically significant main treatment effect for wheezing/asthma. The intervention group are 15.5 percentage points (pp) less likely to require medical attention for wheezing/asthma compared to the control group. Statistically significant individual main effects which do not survive multiple testing and IPW-adjustment are found for general health (10.0 pp), hospitalizations (8.2 pp), immunizations (8.6 pp), chest infections (12.2 pp) and the number of health problems (d = 0.34). Subgroup analysis reveals more statistically significant adjusted treatment effects for boys than girls regarding fewer health problems (d = 0.63), accidents (23.9 pp), and chest infections (22.8 – 37.9 pp). Our results suggest that a community-based home visiting program may have favorable impacts on early health conditions. As child ill health is costly to society due to an increased demand on health resources and long-term productivity losses, identifying effective interventions to counteract inequalities in health is important from a policy perspective.
    Keywords: Randomized controlled trial, home visiting, child health, early intervention
    JEL: C12 C93 J13 I14
    Date: 2015–04–23
  5. By: Paul Grootendorst; Minsup Shim; Adam Falconi; Tyler Robinson; Ethar Ismail; Joel Lexchin
    Abstract: Canada has strengthened intellectual property (IP) protections for pharmaceutical drugs several times over the last three decades. These changes were intended to lengthen the period of market exclusivity for new brand drugs and thereby allow them to earn additional sales revenues that could be used to recoup R&D investments. Whether these policies achieved their objective of increasing sales revenues is unclear, however. Whether they did depends on the coverage decisions of the major drug plans. Longer periods of market exclusivity amount to a price increase for brand drugs. In response to higher prices, drug plans could have become more selective in the drugs they cover, and they could have waited longer to list these drugs on their formularies, reducing formulary exclusivity periods. To investigate, we assembled data on the coverage of brand drugs approved for use in Canada over the last 35 years by the Ontario Drug Benefit (ODB) program, the largest and most influential drug plan in Canada. We find that, except for a brief period of time, the marked strengthening of Canadian pharmaceutical IP laws over the last 25 years have not lead to an increase in the exclusivity period that brand-name drugs enjoy on the ODB formulary. In fact, exclusivity periods have been dropping more or less consistently since the mid 1970s. The causes of these changes remain to be explored.
    Keywords: intellectual property, pharmaceuticals, public drug coverage, ontario
    JEL: I18 I13 O34
    Date: 2015–05
  6. By: Ariel BenYishay; Keith Kranker
    Abstract: This study evaluates the effect of Measles Catchup Campaigns on child mortality in Africa.
    Keywords: Child Mortality, Measles, Africa, Impact Evaluation
    JEL: I F Z
    Date: 2015–04–28
  7. By: Bhalotra, Sonia; Karlsson, Martin
    Abstract: This paper investigates the potential of an infant intervention to improve life expectancy, contributing to emerging interest in the early life origins of chronic disease. We analyse a pioneering program trialled in Sweden in the 1930s, which provided information, support and monitoring of infant care. Using birth certficate data from parish records matched to death registers, we estimate that the average duration of program exposure in infancy led to a 1.54% point decline in the risk of infant death (23% of baseline risk) and a 2.37% decline in the risk of dying by age 75 (6.5% of baseline risk).
    Date: 2015–04–29
  8. By: Richard Layard
    Abstract: Mental illness (especially depression and chronic anxiety) is the biggest single cause of misery in advanced countries. But only one quarter of those who are ill receive treatment. Mental health is crucial for wellbeing and there are modern evidence-based ways of treating mental health problems which have no net cost to the Exchequer. What are the most important factors affecting wellbeing in our society? And what low-cost ways do we have of improving wellbeing, when "all the money's gone"? The final briefing in the CEP 2015 Election Analyses series looks at the progress made in the provision of treatment for mental health problems and considers the plans each major party have put forward to both maintain and expand services.
    Keywords: mental health, NHS, government policy
    Date: 2015–05
  9. By: Chaudhuri, Sarbajit
    Abstract: The paper purports to examine the rationale in subsidizing healthcare in the developing economies solely from the standpoint of economic growth with the help of a three-sector, full-employment small economy model with exogenous labour market imperfection and a non-traded sector providing healthcare services. Consumption of healthcare services emanates positive externalities and raises the efficiency of workers. There is provision for providing public subsidy on the consumption of health services. The analysis finds that the socially optimal consumption subsidy on health is not necessarily positive and crucially hinges on factors like degree of labour market imperfection, quality of services provided by the healthcare sector and its production technology. These results lead to a few important policy implications in the context of the developing countries. Finally, this analysis provides a theoretical justification why the magnitude of public spending on healthcare services is significantly lower in the developing countries vis-à-vis the developed nations.
    Keywords: Consumption externality; healthcare; efficiency of labour; health subsidy; social welfare; developing countries; general equilibrium
    JEL: D58 D62 H21 I18 J31
    Date: 2015–04–15
  10. By: Barkowski, Scott
    Abstract: I study job lock and job push, the twin phenomena believed to be caused by employment-contingent health insurance (ECHI). Using variation in Medicaid eligibility among household members of male workers as a proxy for shifts in workers’ dependence on employment for health insurance, I estimate large job lock and job push effects. For married workers, Medicaid eligibility for one household member results in an increase in the likelihood of a voluntary job exit over a four-month period by approximately 34%. For job push, the transition rate into jobs with ECHI among all workers falls on average by 26%.
    Keywords: Job Lock; Job Push; Medicaid; Job Mobility
    JEL: I13 J6
    Date: 2015–04–01
  11. By: Allen, Jeffrey; Chakraborty, Shankha
    Abstract: How does inequality motivate people and at what cost? We develop a model of perpetual youth with heterogeneous upward-looking aspirations -- people value their consumption relative to the conditional mean of those above them in the distribution. Their survival depends on health capital produced from time investment and health goods. Higher fundamental inequality, working through the aspirations gap, motivates people to work and save more. Economic outcomes improve but income and consumption inequality worsen because the poor have less capacity to respond. By diverting resources from health production, aspirations also worsen mortality, especially for the poor. Though relative income has a strong negative effect on personal health, we show that inequality has a weaker effect on population health, explaining an empirical puzzle on the relative income and health gradient.
    Keywords: Inequality, Aspirations, Consumption externality, Health, Grossman model, Relative income and health gradient, Heterogeneous agents
    JEL: D31 D91 I14 J20
    Date: 2015–04–30
  12. By: Helena Chuliá (Department of Econometrics, Riskcenter-IREA, Universitat de Barcelona); Montserrat Guillén (Department of Econometrics, Riskcenter-IREA, Universitat de Barcelona); Jorge M. Uribe (Facultad de Ciencias Sociales y Economicas, Universidad del Valle)
    Abstract: We present a methodology to forecast mortality rates and estimate longevity and mortality risks. The methodology uses Generalized Dynamic Factor Models fitted over the differences of the log-mortality rates. We compare prediction performance with models previously proposed in the literature, such as the traditional Static Factor Model fitted over the level of log-mortality rates. We also construct risk measures by the means of vinecopulae simulations, taking into account the dependence between the idiosyncratic components of the mortality rates. The methodology is implemented to project the mortality rates of the United Kingdom, for which we consider a portfolio and study longevity and mortality risks.
    Keywords: Longevity, mortality forecasting, factor models, vine-copulae, Value at Risk.
    Date: 2015–03

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