The Impact of Pharmaceutical Innovation on Longevity and Medical Expenditure in Sweden, 1997-2010: Evidence from Longitudinal, Disease-Level Data

We use longitudinal, disease-level data to analyze the impact of pharmaceutical innovation on longevity and medical expenditure in Sweden, where mean age at death increased by 1.88 years during the period 1997-2010. Pharmaceutical innovation is estimated to have increased mean age at death by 0.60 years during the period. The estimates indicate that longevity depends on the number of drugs to treat a disease, not the number of drug classes. Pharmaceutical innovation also reduced hospital utilization in Sweden, so the cost per life-year gained from the introduction of new drugs was quite low.