What faster drug approvals are worth

I’ve been revisiting some older papers that might shed light on the benefits of faster clinical trials. Let’s start with a short 2007 paper by Frank Lichtenberg, which looked at the correlations between deaths from various diseases over time, and the share of medical prescriptions for that disease relying on newer medicines. Lichtenberg found that mortality was lower for a given disease when more of its prescriptions relied on newer medicines, and he used this to back out an estimate of the consequences for US health if those new prescriptions had not been available. For example, in 2003, he estimates there would be roughly 1.6 million fewer life-years if drugs invented since 1990 had not been available. With roughly 380 new molecular entities approved between 1990 and 2002, that works out to 4,200 life years lost, on average, per drug: i.e., if a drug invented after 1990 had not been available during 2003. Just one year later, Philipson et al. (2008) looked at the impact of the Prescription Drug User Fee Act of 1992. Philipson and coauthors argue the act sped up drug approvals by 6-7%, and generated a surplus (the gap between what consumers would have been willing to pay and the cost of producing medicine) equal to $14-31 billion.