The impact of pharmaceutical innovation on disability days and the use of medical services in the United States, 1997-2010

I investigate whether diseases subject to more rapid pharmaceutical innovation experienced greater declines in Americans’ disability days and use of medical services during the period 1997–2010, controlling for several other factors, using data from the Medical Expenditure Panel Survey. The mean number of work loss days, school loss days, and hospital admissions declined more rapidly among medical conditions with larger increases in the mean number of new (post-1990) prescription drugs consumed. The value of reductions in work loss days and hospital admissions attributable to pharmaceutical innovation is estimated to be three times as large as the cost of new drugs consumed.