Working Paper: NBER ID: w12406
Authors: Frank R. Lichtenberg
Abstract: We estimate the medical cost per life-year gained from increased utilization of HIV drugs by estimating the impact of increased drug utilization on the life expectancy and drug and hospital expenditure of HIV/AIDS patients, using aggregate (U.S. national-level) data for the period 1982-2001. We use IMS Health data on the aggregate number of and expenditure on HIV drug prescriptions, the CDC's AIDS Public Information Data Set, and data from AHRQ's Nationwide Inpatient Sample.\n\tEstimates of mortality models imply that actual life expectancy of HIV/AIDS patients in 2001 was 13.4 years higher than it would have been if the drug utilization rate had not increased from its 1993 level. Estimates of a model of hospital discharges imply that increased utilization of HIV drugs caused hospital utilization to decline by .25 to .29 discharges per person per year during the period 1993-2001. Medical cost per additional life-year is estimated to have been $17,175.\n\tTreatments that cost this amount are widely considered to be cost-effective. The consistency of this estimate with those from previous studies suggests that analysis of aggregate data may be a useful alternative or additional approach to evaluating the cost-effectiveness of new treatments.
Keywords: HIV drugs; longevity; medical expenditure; cost-effectiveness
JEL Codes: I12; J1; O33
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased HIV drug utilization (H53) | Decrease in mortality rate (I14) |
| Increased HIV drug utilization (H53) | Increase in life expectancy (J17) |
| Increased HIV drug utilization (H53) | Decrease in hospital utilization (I11) |
| Decrease in hospital utilization (I11) | Contribution to decline in hospital admissions (I14) |
| Increased HIV drug utilization (H53) | Cost-effectiveness of treatments (Q51) |