Abstract The rapid emergence of vaccines and therapeutics in response to the onset of the coronavirus (COVID-19) pandemic demonstrated the value of medical innovation. These advances not only led to enhanced patient welfare by reducing the disease’s mortality and morbidity but also reduced the need for costly prevention measures, such as cuts in economic activity. This paper offers the first estimate of the portion of economic value generated by these medical innovations that was appropriated as earnings by the innovating companies, measured by the ratio of company earnings to the overall societal value generated by the innovations. To estimate the value and appropriation of COVID-19 innovations, one must necessarily make assumptions about what disease-specific and preventive activity would have been in the absence of these new innovations. To obtain robustness in our findings across such scenarios, we estimate industry appropriation across a wide range of counterfactual scenarios that would occur under no innovation. These scenarios include previous assessments of the contributing subparts of the value generated by the innovations. Our primary finding is that, within the large range of these counterfactual scenarios, upper-bound measures of the proportion of value appropriated by the industry ranged from 0.2 % to 4.6 % of the value generated by the vaccine and treatment innovations. Even though these are upper bound appropriation rates, they are significantly lower than those documented for other significant health sciences innovations. This suggests that COVID-19 vaccines and treatments were remarkable, not only in their swift development but also in the considerable societal value they provided, which extended far beyond the rewards to the innovating companies.

Abstract This study argues that value assessment conducted from a societal perspective should rely on the Generalized Cost-Effectiveness Analysis (GCEA) framework proposed herein. Recently developed value assessment inventories – such as the Second Panel on Cost-Effectiveness’s “impact inventory” and International Society of Pharmacoeconomics Outcomes Research (ISPOR) “value flower” – aimed to more comprehensively capture the benefits and costs of new health technologies from a societal perspective. Nevertheless, application of broader value elements in practice has been limited in part because quantifying these elements can be complex, but also because there have been numerous methodological advances since these value inventories have been released (e.g. generalized and risk-adjusted cost effectiveness). To facilitate estimation of treatment value from a societal perspective, this paper provides an updated value inventory – called the GCEA value flower – and a user guide for implementing GCEA for health economics researchers and practitioners. GCEA considers 15 broader value elements across four categories: (i) uncertainty, (ii) dynamics, (iii) beneficiary, and (iv) additional value components. The uncertainty category incorporates patient risk preferences into value assessment. The dynamics category petals account for the evolution of real-world treatment value (e.g. option value) and includes drug pricing trends (e.g. future genericization). The beneficiary category accounts for the fact health technologies can benefit others (e.g. caregivers) and also that society may care to whom health benefits accrue (e.g. equity). Finally, GCEA incorporates additional broader sources of value (e.g. community spillovers, productivity losses). This GCEA user guide aims to facilitate both the estimation of each of these value elements and the incorporation of these values into health technology assessment when conducted from a societal perspective.

Abstract As the tax base for traditional tobacco excise taxes continues to erode, policymakers have growing interest to expand taxation to novel and reduced-risk tobacco products. Chief among the latter are electronic nicotine delivery systems (ENDS; commonly known as e-cigarettes), although other reduced-risk tobacco products such as heated tobacco and smokeless tobacco products are also being considered for taxation. There are many possible rationales for taxing such products: to raise revenue, to correct for health externalities, to improve public health, to correct for internalities caused by irrationality or misinformation, and to redistribute income. Although each rationale leads to a different objective function, the conclusions regarding relative tax rates are largely the same. The relatively higher price elasticity of demand for e-cigarettes (compared to cigarettes) and the lower marginal harms from use imply in each case that taxes on e-cigarettes and other harm-reduced products should be relatively lower, and likely much lower, than those on cigarettes. Additional considerations concerning the policy goal of discouraging use of any tobacco product by youth are discussed as well.

Abstract In recent years, Medicare margins of U.S. short-term acute care hospitals participating in the inpatient prospective payment system (IPPS) have declined nationally by over 10 percentage points, from 2.2% in 2002 to −8.7% in 2019. This trend conceals critical regional variations, with recent studies documenting particularly low and negative margins in metropolitan areas with higher labor costs despite geographic adjustments by the Centers for Medicare & Medicaid Services (CMS). In this article, we describe recent trends in California hospitals’ traditional fee-for-service Medicare operating margins compared to hospital operating margins across payers and changes in the CMS hospital wage index (HWI) used to adjust Medicare payments. We conduct an observational study of audited financial reports of IPPS-participating California hospitals using California Department of Health Care Access and Information and CMS data for years 2005–2020 (n = 4429 reports included in the analysis). We describe trends in financial measures by payer and investigate associations between HWI and traditional Medicare margins, focusing on the pre-COVID period of 2005 through 2019. During that period, California hospitals’ statewide traditional Medicare operating margin declined from −27 to −40%, and financial shortfalls in caring for fee-for-service Medicare patients more than doubled ($4.1 billion in 2005 to $8.5 billion in 2019, both values in 2019 dollars). Meanwhile, operating margins from commercial managed care patients increased from 21% in 2005 to 38% in 2019. There was a stable negative association between HWI and traditional Medicare operating margins throughout the period (p = 0.000 in 2005; p < 0.0001 in 2006–2020), indicating that areas of California with higher health care wages had persistently worse traditional Medicare operating margins than areas with lower wages.

Abstract The aim of this paper is to evaluate the utility of the Health and Retirement Study (HRS) for studying the impact of working conditions on individuals’ health, well-being and labor supply decisions at older ages. I provide a brief overview of the information on working conditions that is currently available in the HRS and discuss implications for studies on the effects of working conditions on the individual life course. I conclude with a discussion of how recent and projected trends in the U.S. workforce are reflected in the current HRS survey content.

Abstract A recent report from the National Academies of Sciences, Engineering, and Medicine (NASEM) highlights rising rates of working-age mortality in the United States, portending troubling population health trends for this group as they age. The Health and Retirement Study (HRS) is an invaluable resource for researchers studying health and aging dynamics among Americans ages 50 and above and has strong potential to be used by researchers to provide insights about the drivers of rising U.S. mortality rates. This paper assesses the strengths and limitations of HRS data for identifying drivers of rising mortality rates in the U.S. and provides recommendations to enhance the utility of the HRS in this regard. Among our many recommendations, we encourage the HRS to prioritize the following: link cause of death information to respondents; reduce the age of eligibility for inclusion in the sample; increase the rural sample size; enhance the existing HRS Contextual Data Resource by incorporating longitudinal measures of structural determinants of health; develop additional data linkages to capture residential settings and characteristics across the life course; and add measures that capture drug use, gun ownership, and social media use.

Abstract In the absence of effective pharmacological treatment to halt or reverse the course of Alzheimer’s disease and related dementias (ADRDs), population-level research on the modifiable determinants of dementia risk and outcomes for those living with ADRD is critical. The Harmonized Cognitive Assessment Protocol (HCAP), fielded in 2016 as part of the U.S. Health and Retirement Study (HRS) and multiple international counterparts, has the potential to play an important role in such efforts. The stated goals of the HCAP are to improve our ability to understand the determinants, prevalence, costs, and consequences of cognitive impairment and dementia in the U.S. and to support cross-national comparisons. The first wave of the HCAP demonstrated the feasibility and value of the more detailed cognitive assessments in the HCAP compared to the brief cognitive assessments in the core HRS interviews. To achieve its full potential, we provide eight recommendations for improving future iterations of the HCAP. Our highest priority recommendation is to increase the representation of historically marginalized racial/ethnic groups disproportionately affected by ADRDs. Additional recommendations relate to the timing of the HCAP assessments; clinical and biomarker validation data, including to improve cross-national comparisons; dropping lower performing items; enhanced documentation; and the addition of measures related to caregiver impact. We believe that the capacity of the HCAP to achieve its stated goals will be greatly enhanced by considering these changes and additions.

Abstract The Health and Retirement Study is an amazing resource for those studying aging in the United States, and a fantastic model for other countries who have created similar longitudinal studies. The raw amount of information, from data on income, wealth, and use of health services to employment, retirement, and family connections on to the collection of clinical biomarkers can be both empowering and overwhelming to a researcher. Luckily through the process of engagement with the research community and constant improvement, these reams of data are not only consistently growing in a thoughtful and focused direction, they are also explained and summarized to increase the ease of use for all. One of the very useful areas of the HRS is the Contextual Data File (CDF), which is the focus of this review. The CDF provides access to easy-to-use helpful community-level data in a secure environment that has allowed researchers to answer questions that would have otherwise been difficult or impossible to tackle. The current CDF includes data in six categories (University of Michigan Institute for Social Research. 2017. HRS Data Book: The Health and Retirement Study: Aging in the 21st Century, Challenges and Opportunities for Americans. Ann Arbor: University of Michigan. Also available at https://hrs.isr.umich.edu/about/data-book, 17): 1. Socio-economic Status and Demographic Structure 2. Psychosocial Stressors 3. Health Care 4. Physical Hazards 5. Amenities 6. Land Use and the Built Environment. Each of these areas have allowed researchers to answer interesting questions such as what is the impact of air pollution on cognition in older adults (Ailshire, J., and K. M. Walsemann. 2021. “Education Differences in the Adverse Impact of PM 2.5 on Incident Cognitive Impairment Among U.S. Older Adults.” Journal of Alzheimer’s Disease 79 (2): 615–25), the impact of neighborhood characteristics on obesity in older adults (Grafova, I. B., V. A. Freedman, R. Kumar, and J. Rogowski. 2008. “Neighborhoods and Obesity in Later Life.” American Journal of Public Health 98: 2065–71), or even what do we gain from introducing contextual data to a survey analysis (Wilkinson, L. R., K. F. Ferraro, and B. R. Kemp. 2017. “Contextualization of Survey Data: What Do We Gain and Does it Matter?” Research in Human Development 14 (3): 234–52)? My review focuses on the potential to expand contextual data in a few of these areas. From new data sets developed and released by the U.S. Census Bureau, to improved measurements of climate and environmental risk, there are numerous new data sources that would be a boon to the research community if they were joined together with the HRS. The following section begins by breaking down the opportunity provided by community or place-based data before moving on to specific recommendations for new data that could be included in the HRS contextual data file.

Abstract This study aims to investigate the association between gross domestic product (GDP), mortality rate (MR) and current healthcare expenditure (CHE) in 31 high-income countries. We used panel data from 2000 to 2017 collected from WHO and OECD databases. The association between CHE, GDP and MR was investigated through a random-effects model. To control for reverse causality, we adopted a test of Granger causality. The model shows that the MR has a statistically significant and negative effect on CHE and that an increase in GDP is associated with an increase of CHE (p < 0.001). The Granger causality analysis shows that all the variables exhibit a bidirectional causality. We found a two-way relationship between GDP and CHE. Our analysis highlights the economic multiplier effect of CHE. In the debate on the optimal allocation of resources, this evidence should be taken into due consideration.

Abstract This study seeks to analyze the overall impact that biopharmaceutical innovation had on disability, Social Security recipiency, and the use of medical services of U.S. community residents during the period 1998–2015. We test the hypothesis that the probability of disability, Social Security recipiency, and medical care utilization associated with a medical condition is inversely related to the number of drug classes previously approved for that condition. We use data from the 1998–2015 waves of the Medical Expenditure Panel Survey and other sources to estimate probit models of an individual’s probability of disability, Social Security recipiency, and medical care utilization. The effect of biopharmaceutical innovation is identified by differences across over 200 medical conditions in the growth in the lagged number of drug classes ever approved. 18 years of previous biopharmaceutical innovation is estimated to have reduced: the number of people who were completely unable to work at a job, do housework, or go to school in 2015 by 4.5%; the number of people with cognitive limitations by 3.2%; the number of people receiving SSI in 2015 by 247 thousand (3.1%); and the number of people receiving Social Security by 984 thousand (2.0%). Previous innovation is also estimated to have caused reductions in home health visits (9.2%), inpatient events (5.7%), missed school days (5.1%), and outpatient events (4.1%). The estimated value in 2015 of some of the reductions in disability, Social Security recipiency, and use of medical care attributable to previous biopharmaceutical innovation ($115 billion) is fairly close to 2015 expenditure on drug classes that were first approved by the FDA during 1989–2006 ($127 billion). However, for a number of reasons, the costs are likely to be lower, and the benefits are likely to be larger, than these figures.

Abstract Medicare Part D has significantly enhanced access to prescription drugs among Medicare beneficiaries. However, the recent rapid rise of utilization management policies in the Medicare Part D program may have adversely affected access to prescription drugs. I study the effects of expected and observed exposure to utilization management in prescription drug utilization using Medicare Part D claims data from 2009 to 2016 and an instrumental variables strategy based on the interaction of lagged health status and the set of plans available to each beneficiary. I find that the expected share of spending subject to utilization management increases the observed share, with the smallest effect for prior authorization. Increases in the expected share of drug spending subject to prior authorization increases Part D spending by $122.27 per percentage point, with almost three-quarters of this increase being paid by the Medicare program, rather than beneficiaries or plans. Comparable increases in step therapy and quantity limit exposure increase spending by $46 and decrease spending by $31, respectively. Interestingly, increased exposure to prior authorization and quantity limits increases the average price per 30-day prescription.

AbstractObjectivesQuantify the value of functional status (FS) improvements consistent in magnitude with improvements due to levodopa-carbidopa intestinal gel (LCIG) treatment, among the advanced Parkinson’s disease (APD) population.MethodsThe Health Economic Medical Innovation Simulation (THEMIS), a microsimulation that estimates future health conditions and medical spending, was used to quantify the health and cost burden of disability among the APD population, and the value of quality-adjusted life-years gained from FS improvement due to LCIG treatment compared to standard of care (SoC). A US-representative Parkinson’s disease (PD)-comparable cohort was constructed in THEMIS based on observed PD patient characteristics in a nationally representative dataset. APD was defined from the literature and clinical expert input. The PD and APD cohorts were followed from 2010 over their remaining lifetimes. All individuals were ages 65 and over at the start of the simulation. To estimate the value of FS improvement due to LCIG treatment, decreases in activities of daily living (ADL) limitations caused by LCIG treatment were calculated using data from a randomized, controlled, double-blind, double-dummy clinical trial and applied to the APD population in THEMIS.ResultsTotal burden of disability associated with APD was $17.7 billion (B). From clinical trial data, LCIG treatment versus SoC lowers the odds of difficulties in walking, dressing, and bathing by 76%, 42% and 39%, respectively. Among the APD population, these reductions generated $2.6B in value to patients and cost savings to payers. The added value was 15% of the burden of disability associated with APD and offsets 15% of the cost of LCIG treatment.ConclusionsFS improvements, consistent with improvements due to LCIG treatment, in the APD population created health benefits and reduced healthcare costs in the US.

AbstractThis paper estimates the magnitude of switching costs in the Medicare Advantage program. Consumers are generally assumed to pick plans that provide the combination of benefits and premiums that maximize their individual utility. However, the plan choice literature has generally omitted prior choices from choice models. The analysis is based on five years of the Medicare Current Beneficiary Survey, a nationally representative longitudinal dataset. The MCBS data were combined with data on Medicare Advantage Part C plan benefits and premiums. Individual choices are modeled as a function of individual characteristics, plan characteristics and prior year plan choices using a mixed logit model. We found relatively high rates of switching between plans within insurer (20%), although less switching between insurers. Prior year plan choices were highly significant at both the contract and plan level. Premium was negative and significant. Loyalty (contract and plan), premium and plan structure were found to be heterogeneous in preferences. We found a statistically significant willingness to pay for a lower prescription drug deductible and lower copays. Switching costs were higher for sicker individuals. Switching costs between plans offered by the same insurer are far lower than switching costs between insurers; beneficiaries will switch plans if an alternative is perceived as $233 a month better than the current choice and switch insurers if the alternative is perceived as $944 better than the current plan/contract, on average. Premium elasticities would be 34% greater in magnitude if prior choices were irrelevant. We provide evidence that the state dependence is structural rather than spurious.

AbstractPrecision medicine – individualizing care for patients and addressing variations in treatment response – is likely to be important in improving the nation’s health in a cost-effective manner. Despite this promise, widespread use of precision medicine, specifically genomic markers, in clinical care has been limited in practice to date. Lack of evidence, clear evidence thresholds, and reimbursement have been cited as major barriers. Health economics frameworks and tools can elucidate the effects of legal, regulatory, and reimbursement policies on the use of precision medicine while guiding research investments to enhance the appropriate use of precision medicine. Despite the capacity of economics to enhance the clinical and human impact of precision medicine, application of health economics to precision medicine has been limited – in part because precision medicine is a relatively new field – but also because precision medicine is complex, both in terms of its applications and implications throughout medicine and the healthcare system. The goals of this review are several-fold: (1) provide an overview of precision medicine and key policy challenges for the field; (2) explain the potential utility of economics methods in addressing these challenges; (3) describe recent research activities; and (4) summarize opportunities for cross-disciplinary research.

AbstractBackgroundThe optimal timing of treatment with vitamin D therapy for patients with chronic kidney disease (CKD), vitamin D insufficiency, and secondary hyperparathyroidism (SHPT) is a pressing question in nephrology with economic and patient outcome implications.ObjectiveThe objective of this study was to estimate the cost-effectiveness of earlier vitamin D treatment in CKD patients not on dialysis with vitamin D insufficiency and SHPT.DesignA cost-effectiveness analysis based on a Markov model of CKD progression was developed from the Medicare perspective. The model follows a hypothetical cohort of 1000 Stage 3 or 4 CKD patients over a 5-year time horizon. The intervention was vitamin D therapy initiated in CKD stages 3 or 4 through CKD stage 5/end-stage renal disease (ESRD) versus initiation in CKD stage 5/ESRD only. The outcomes of interest were cardiovascular (CV) events averted, fractures averted, time in CKD stage 5/ESRD, mortality, quality-adjusted life years (QALYs), and costs associated with clinical events and CKD stage.ResultsVitamin D treatment in CKD stages 3 and 4 was a dominant strategy when compared to waiting to treat until CKD stage 5/ESRD. Total cost savings associated with treatment during CKD stages 3 and 4, compared to waiting until CKD stage 5/ESRD, was estimated to be $19.9 million. The model estimated that early treatment results in 159 averted CV events, 5 averted fractures, 269 fewer patient-years in CKD stage 5, 41 fewer deaths, and 191 additional QALYs.ConclusionsInitiating vitamin D therapy in CKD stages 3 or 4 appears to be cost-effective, largely driven by the annual costs of care by CKD stage, CV event costs, and risks of hypercalcemia. Further research demonstrating causal relationships between vitamin D therapy and patient outcomes is needed to inform decision making regarding vitamin D therapy timing.

Abstract The income gap between specialists and primary care physicians and among specialists is well established, but the drivers of this difference are not well delineated. Using the Community Tracking Study (CTS) Physician Survey, we sought to isolate and compare premiums paid to physicians for specialization and the proportion of time spent on offices visit rather than procedures. We divided medical subspecialties according the proportion of Medicare billing for Evaluation and Management (E&M) codes for the specialty as a whole. We report substantial differences in income across physician specialty, and over 70 percent of the difference in income remained controlling for factors that may confound the relationship between income and specialty including gender, location and type of practice, and hours. We note a large variation in premiums for specialization: 11.3–46.8 percent above family medicine after controlling for confounders. Classifying medical subspecialties by E&M billing as procedural versus non-procedural specialties revealed clear income differences. Controlling for confounders, procedural medical specialties earned 37.5 percent more than family medicine, as compared with 15.3 percent for non-procedural medical specialties. This analysis suggests that differences in physician income and resulting incentives are a direct consequence of the payment structure itself, rather than compensation for additional years of training or a reflection of different underlying demographics.

Abstract Growing evidence suggests that medical marijuana laws have harm reduction effects across a variety of outcomes related to risky health behaviors. This study investigates the impact of medical marijuana laws on self-reported health using data from the Behavioral Risk Factor Surveillance System from 1993 to 2013. In our analyses we separately identify the effect of a medical marijuana law and the impact of subsequent active and legally protected dispensaries. Our main results show surprisingly limited improvements in self-reported health after the legalization of medical marijuana and legally protected dispensaries. Subsample analyses reveal strong improvements in health among non-white individuals, those reporting chronic pain, and those with a high school degree, driven predominately by whether or not the state had active and legally protected dispensaries. We also complement the analysis by evaluating the impact on risky health behaviors and find that the aforementioned demographic groups experience large reductions in alcohol consumption after the implementation of a medical marijuana law.

AbstractIt is widely believed that Medicaid reimbursement for primary care is too low and that these low fees adversely affect access to healthcare for Medicaid recipients. In this article, we exploit changes in Medicaid physician fees for primary care to study the response of primary care visits and services that are complements/substitutes with primary care, including emergency department, hospitalization, prescription drugs, and imaging. Results from our study indicate that higher Medicaid fees for primary care have modest effects. Among non-blind and non-disabled adults, we find that a 25% (or $10) increase in Medicaid fees for primary care is associated with approximately a 5% of a standard deviation increase in the number of primary care visits. For the same group, we also find that the fee increase is associated with an increase in the probability of having any primary care visits of approximately 3 percentage points. For children, changes in Medicaid fees are not significantly related to the number of primary care visits. In terms of other types of care, we find some evidence that Medicaid fees for primary care are associated with prescription drug use, and no evidence that primary care fees are associated with the use of emergency department, inpatient services, or imaging. Overall, our evidence provides, at best, limited support for the large effects of Medicaid fees on service provision sometimes asserted in policy discussions.

AbstractConsumers are uncertain about their preferences for innovative product attributes until the first trial. They search for information as a means of reducing uncertainty and improving the likelihood that they will be satisfied with their purchase. One way to receive information is through peer networks. As a peer network is often a priori unknown, we conduct an experiment to solicit self-reported peer nominations. We compare two mechanisms through which peer networks operate: Strength of social ties and perceived peer expertise, to draw inferences regarding consumers’ preference reversal after exposure to peer recommendations. Our results indicate that perceived source expertise influences preferences while the closeness of social relationships has no statistically significant impact.

AbstractThis paper examines the impact of the New Rural Pension Scheme (NRPS) in China. Exploiting the staggered implementation of an NRPS policy expansion that began in 2009, we use a difference-in-difference approach to study the effects of the introduction of pension benefits on the health status, health behaviors, and healthcare utilization of rural Chinese adults age 60 and above. The results point to three main conclusions. First, in addition to improvements in self-reported health, older adults with access to the pension program experienced significant improvements in several important measures of health, including mobility, self-care, usual activities, and vision. Second, regarding the functional domains of mobility and self-care, we found that the females in the study group led in improvements over their male counterparts. Third, in our search for the mechanisms that drive positive retirement program results, we find evidence that changes in individual health behaviors, such as a reduction in drinking and smoking, and improved sleep habits, play an important role. Our findings point to the potential benefits of retirement programs resulting from social spillover effects. In addition, these programs may lessen the morbidity burden among the retired population.

Abstract In this paper, we estimate the impact of Medicaid expansions via the Patient Protection and Affordable Care Act (ACA) on applications to federal disability programs in 14 states that expanded Medicaid in January 2014. We use a difference-in-differences regression model to compare disability application rates in geographic areas within states that expanded Medicaid to rates in areas of non-expansion states that were carefully selected using a matching approach that accounts for state Medicaid policies pre-ACA as well as demographic and socioeconomic characteristics that might influence disability application rates. We find a slower decrease in Supplemental Security Income (SSI) application rates after Medicaid expansions in expansion states relative to non-expansion states, with application rates declining in both state groups from 2014 through 2016. Our analysis of the impact of the Medicaid expansions on Social Security Disability Insurance (SSDI) application rates was inconclusive for reasons we discuss in the paper.

Abstract There are two types of prescription drug cost offsets. The first type of cost offset – from prescription drug use – is primarily about the effect of changes in drug quantity (e.g. due to changes in out-of-pocket drug costs) on other medical costs. Previous studies indicate that the cost offsets from prescription drug use may slightly exceed the cost of the drugs themselves. The second type of cost offset – the cost offset from prescription drug innovation – is primarily about the effect of prescription drug quality on other medical costs. Two previous studies (of a single disease or a single country) found that pharmaceutical innovation reduced hospitalization, and that the reduction in hospital cost from the use of newer drugs was considerably greater than the innovation-induced increase in pharmaceutical expenditure. In this study, we reexamine the impact that pharmaceutical innovation has had on hospitalization, employing a different type of 2-way fixed effects research design. In lieu of analyzing different countries over time for a single disease, or different diseases over time for a single country, we estimate the impact that new drug launches that occurred during the period 1982–2015 had on hospitalization in 2015 for 67 diseases in 15 OECD countries. Our models include both country fixed effects and disease fixed effects, which control for the average propensity of people to be hospitalized in each country and from each disease. The number of hospital discharges and days of care in 2015 is significantly inversely related to the number of drugs launched during 1982–2005, but not significantly related to the number of drugs launched after 2005. (Utilization of drugs during the first few years after they are launched is relatively low, and drugs for chronic conditions may have to be consumed for several years to achieve full effectiveness.) The estimates imply that, if no new drugs had been launched after 1981, total days of care in 2015 would have been 163% higher than it actually was. The estimated reduction in 2015 hospital expenditure that may be attributable to post-1981 drug launches was 5.3 times as large as 2015 expenditure on those drugs.