Frank R Lichtenberg, PhD | Columbia University, National Bureau of Economic Research |
ABSTRACT –
A previous study found that Canadian mortality and hospital utilization were reduced during the period 2000-2016 by new drug authorizations many years earlier. Since 2016, there have been substantial changes in premature mortality and average length of hospital stays in Canada. This study reexamines the impact that pharmaceutical innovation had on mortality and hospital utilization in Canada during the period 2000–2022. In addition to analyzing a longer and more recent sample period, this study builds upon the previous analysis in several important respects. The estimates imply that, in the absence of drug approvals during 1974-1995, the number of life-years lost before age 75 (YLL75) would have been 49% higher in 2022. Drug approvals during 1974-1995 reduced YLL75 in 2022 by 847 thousand. The authorization of new classes of drugs has a more immediate effect on mortality than the authorization of new drugs, but the former effect is smaller and less statistically significant than the latter effect. For example, new classes of drugs authorized during 1990-2011 are estimated to have reduced the growth in the number of years of life lost before age 65 during 2000-2022 by 29%, whereas new drugs authorized during 1978-1999 are estimated to have reduced the growth in the number of years of life lost before age 65 during 2000-2022 by 39%. This may signify that mortality is more strongly related to the importance-weighted number of classes than it is to the unweighted number of classes, and that the more important or significant a class is, the larger the number of substances that were launched in the class. The estimates also imply that, in the absence of drug approvals during 1970-1991, the total number of hospital days (DAYS) would have been 55% higher in 2022. Drug approvals during 1970-1991 reduced DAYS in 2022 by 14.2 million. The estimated reduction in 2022 hospital expenditure attributable to drug approvals during 1970-1991 is about twice as large as 2022 expenditure on all prescribed medicines (CA$ 37.4 billion). These estimates may be conservative, because the models do not fully capture the health impacts of COVID-19 vaccines. A previous study argued that those vaccines reduced the number of COVID-19 cases by 21%, the number of COVID-19 hospitalizations by 37%, and the number of COVID-19 deaths by 63%. In addition to analyzing the relationship between pharmaceutical innovation and mortality using national data, this study examined the relationship between access to drugs covered in public drug program formularies and mortality using data by province, disease, and year. The age-adjusted mortality rate from a given disease in a given province in a given year is significantly inversely related to the number of drugs that are used to treat that disease and that were covered in public drug program formularies in that province 4-12 years earlier, controlling for the average (across years) level of mortality and drug access of each disease in each province, the average (across provinces) level of mortality and drug access of each disease in each year, and the average (across diseases) level of mortality and drug access of each province in each year.
Citation: Lichtenberg, F. R. (2025). The impact of pharmaceutical innovation on mortality and hospital utilization in Canada, 2000–2022. Canadian Health Policy, AUG 2025. https://doi.org/10.54194/AVTD1509. canadianhealthpolicy.com.