Working Paper: NBER ID: w9750
Authors: Frank R. Lichtenberg; Joel Waldfogel
Abstract: With substantial fixed costs of drug development, more common conditions can support more products. If additional pharmaceutical products are beneficial, they will attract greater consumption and promote better health, e.g. greater longevity. We ask how market size measured by condition prevalence affects consumption and longevity. We document in condition cross sections that both the tendency to use a drug and longevity are higher for individuals with more prevalent conditions. We also make use of the 1983 Orphan Drug Act (ODA), which promoted development of drugs for the treatment of rare conditions. Longevity and drug use have grown more quickly for persons with rare diseases and even more quickly for persons with conditions with substantial orphan drug use.
Keywords: No keywords provided
JEL Codes: L11; I12; L65
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| condition prevalence (I12) | drug consumption (I12) |
| condition prevalence (I12) | longevity (C41) |
| market size (L25) | drug consumption (I12) |
| market size (L25) | longevity (C41) |
| ODA (O20) | market size (L25) |
| drug consumption (I12) | longevity (C41) |