CESifo working paper Fiscal Policy, Macroeconomics and Growth 3095
I investigate the contribution of pharmaceutical innovation to recent longevity growth in Germany and France. First, I examine the effect of the vintage of prescription drugs (and other variables) on the life expectancy and age-adjusted mortality rates of residents of Germany, using longitudinal, annual, state-level data during the period 2000-2007. The estimates imply that almost half of the 1.7-year increase in German life expectancy during the period 2000-2007 was due to the replacement of older drugs by newer drugs. Next, I examine the effect of the vintage of chemotherapy treatments on age-adjusted cancer mortality rates of residents of France, using longitudinal, annual, cancer-site-level data during the period 2002-2006. The estimates imply that chemotherapy innovation accounted for at least one-sixth of the decline in French cancer mortality rates, and may have accounted for as much as half of the decline.