Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs
American Economic Review
vol. 107,
no. 5, May 2017
(pp. 486-90)
Abstract
Alan Garber and Jonathan Skinner (2008) famously conjectured that the US health care system was "uniquely inefficient" relative to other countries. We test this idea using cross-country data on prescription drug sales newly linked with an arguably objective measure of relative therapeutic benefits, or drug quality. Specifically, we investigate how higher and lower quality drugs diffuse in the US relative to Australia, Canada, Switzerland, and the UK. Our tabulations suggest that lower quality drugs diffuse more in the US relative to high quality drugs compared to each of our four comparison countries--consistent with Garber and Skinner's conjecture.Citation
Kyle, Margaret, and Heidi Williams. 2017. "Is American Health Care Uniquely Inefficient? Evidence from Prescription Drugs." American Economic Review, 107 (5): 486-90. DOI: 10.1257/aer.p20171086Additional Materials
JEL Classification
- H51 National Government Expenditures and Health
- I11 Analysis of Health Care Markets
- I18 Health: Government Policy; Regulation; Public Health
- L65 Chemicals; Plastics; Rubber; Drugs; Biotechnology