Working Paper: NBER ID: w30440
Authors: Katharina E. Blankart; Frank R. Lichtenberg
Abstract: Does using prescription drugs off-label increase disability and medical expenditure? This paper uses a unique dataset to evaluate off-label vs. on-label drug use in the US non-institutionalized population. Patients using drugs off-label have on average $515 higher medical expenditure and work-loss cost. Pharmaceutical innovation has direct and indirect effects on off-label drug use. Market size is indicative of the fraction of treatments used off-label. Our findings have implications for regulation and welfare. We address endogeneity issues by demonstrating that patients with higher disease severity do not experience higher off-label uses and by controlling for unobserved individual and condition effects.
Keywords: off-label drug use; medical expenditure; disability; pharmaceutical innovation; healthcare policy
JEL Codes: I18; L65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| off-label drug use (I19) | medical expenditure (H51) |
| off-label drug use (I19) | work-loss costs (J32) |
| pharmaceutical innovation (O35) | off-label drug use (I19) |
| market size (L25) | fraction of treatments used off-label (I11) |
| disease severity (I12) | off-label drug use (I19) |