Distributional health effects of drug innovation

This paper creates a novel set of indexes to both quantify the distributional health impacts of drug innovation and compare intended benefit to realized benefit. First, using a representative sample of drug utilization and diagnoses from the Medical Health Expenditure Panel Survey (MEPS) we define two populations of drug beneficiaries (i) individuals who could benefit from a drug based on diagnosis and (ii) individuals who directly benefit from utilization of a drug. We, then, take clinical measures of Quality Adjusted Life Years (QALY) from the Cost Effectiveness Analysis (CEA) database and derive (1) an index of health gain for the intended population of treatment and (2) an index for the population who benefit. Finally, we compare health gains across race, income, and education.

Work in progress