NCPA - National Center for Policy Analysis

Spending On Medical Drugs Increases Life Expectancies

April 8, 1999

A country's level of pharmaceutical use is related to the longevity of its citizens, say the authors of a ground-breaking study on the productivity of health care expenditures. And while countries that already have higher per capita expenditures on drugs would experience smaller gains in life expectancy from spending more, low-spending countries could make dramatic gains.

But even among rich countries -- those with a high per capita gross domestic product -- the level of medical drug use varies widely. In 1990, for instance, France's per capita consumption of pharmaceuticals was five times that of Denmark, and Italy's was roughly twice that of the United States.

Using data on 21 countries from the Organization for Economic Cooperation and Development, researchers measured per capita expenditures on medical drugs in 1985. Controlling for various factors, such as lifestyle and income, they found:

  • Expenditures on health care other than for pharmaceuticals had no measurable effect on life expectancy at birth or ages 40 or 60.
  • However expenditures on pharmaceuticals has a positive effect on life expectancy at birth and at ages 40 and 60 -- with a significant effect at age 40 and an even larger effect at age 60.
  • Furthermore, the additional per capita drug expenditures necessary to extend life expectancy by one year varies widely between high-use and low-use countries; for example, for 40-year-old men it ranges from more than $60,000 per life year saved in France to roughly $3,800 in Turkey.

In general, for the countries studied, doubling pharmaceutical expenditures would increase life expectancy at age 40 by roughly 2 percent and at age 60 by roughly 4 percent. For a country with average life expectancy, a typical 60-year-old male would gain 0.7 years of life and a female, 1.0 years.

Source: H. E. Frech III (University of California - Santa Barbara) and Richard D. Miller Jr. (Center for Naval Analyses), "The Productivity of Health Care and Pharmaceuticals: An International Comparison" (Washington: AEI Press, 1999).


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