ENTRY IN THE ADHD DRUGS MARKET: WELFARE IMPACT OF GENERICS AND ME-TOO'S.

Recent decades have seen a growth in treatments for attention deficit hyperactivity disorder (ADHD) including many branded and generic drugs. In the early 2000's, new drug entry dramatically altered market shares. We estimate a demand system for ADHD drugs and assess the welfare impact of new drugs. We find that entry induced large welfare gains by reducing prices of substitute drugs, and by providing alternative delivery mechanisms for existing molecules. Our results suggest that the success of follow-on patented drugs may come from unanticipated innovations like delivery mechanisms, a factor ignored by proposals to retard new follow-on drug approvals.

School accountability laws and the consumption of psychostimulants.

Over the past decade, several states introduced varying degrees of accountability systems for schools, which became federal law with the passage of the No Child Left Behind Act of 2001. The intent of these accountability laws was to improve academic performance and to make school quality more observable. Nonetheless, schools have reacted to these pressures in several different ways, some of which were not intended. We make use of the variation across states and over time in specific provisions of these accountability laws and find that accountability pressures effect medical diagnoses and subsequent treatment options of school aged children. Specifically, children in states with more stringent accountability laws are more likely to be diagnosed with Attention Deficit/Hyperactivity Disorder (ADHD) and consequently prescribed psychostimulant drugs for controlling the symptoms. However, conditional on diagnosis, accountability laws do not further change the probability of receiving medication therapy.

Government health expenditures and health outcomes.

This paper provides econometric evidence linking a country's per capita government health expenditures and per capita income to two health outcomes: under-five mortality and maternal mortality. Using instrumental variables techniques (GMM-H2SL), we estimate the elasticity of these outcomes with respect to government health expenditures and income while treating both variables as endogenous. Consequently, our elasticity estimates are larger in magnitude than those reported in literature, which may be biased up. The elasticity of under-five mortality with respect to government expenditures ranges from -0.25 to -0.42 with a mean value of -0.33. For maternal mortality the elasticity ranges from -0.42 to -0.52 with a mean value of -0.50. For developing countries, our results imply that while economic growth is certainly an important contributor to health outcomes, government spending on health is just as important a factor.

Attention-deficit/hyperactivity disorder in children: excess costs before and after initial diagnosis and treatment cost differences by ethnicity.

OBJECTIVES: To estimate the excess costs for children in the years surrounding initial diagnosis of attention-deficit/hyperactivity disorder (ADHD) and to estimate differences in treatment costs by ethnicity. DESIGN: We identified children diagnosed with ADHD and estimated their health service costs in the 2 years before and 2 years after initial diagnosis of ADHD. Costs were compared with those for children without ADHD. We adjusted for age, sex, ethnicity, pharmacy co-pay, estimated family income, coexisting mental health disorders, and chronic medical conditions. SETTING: Nonprofit, integrated health care delivery system in northern California from January 1, 1996, to December 31, 2004. PARTICIPANTS: Children aged 2 to 10 years with (n = 3122) and without (n = 15 899) ADHD. Main Exposure Attention-deficit/hyperactivity disorder. MAIN OUTCOME MEASURES: Health care costs and use in the years before and after initial ADHD diagnosis as well as costs of ADHD-related services. RESULTS: Compared with children without ADHD, children with ADHD had mean costs that were $488 more in the second year before their ADHD diagnosis, $678 more in the year before their diagnosis, $1328 more in the year after their diagnosis, and $1040 more in the second year after their diagnosis. Asian Americans diagnosed with ADHD had lower total ADHD-related mean costs per year than white Americans diagnosed with ADHD ($221 lower), and Asian Americans, African Americans, and Hispanic Americans all had lower ADHD-related pharmacy mean costs than white Americans ($95, $63, and $77 lower, respectively). CONCLUSIONS: Children with ADHD use significantly more health services before and after their diagnosis than children without ADHD. Among children diagnosed with ADHD, nonwhite Americans (especially Asian Americans) use fewer ADHD-related services than white Americans.