• H E Frech and Richard D Miller.
• Department of Economics, University of California, Santa Barbara, California 93106, USA. frech@econ.ucsb.edu
• Pharmacoeconomics. 2004 Jan 1; 22 (2 Suppl 2): 25-36.

ObjectiveThe objective of this study is to validate our earlier work on life expectancy with more recent data and, more importantly, to extend it to examine quality of life, not only the length of life.Design And SettingThe analysis focuses on the production of health, disaggregating healthcare into pharmaceutical consumption and other healthcare. Going beyond our earlier work, measures of health include life expectancy and disability-adjusted life expectancy (DALE). Also, we consider the impact of obesity. The sample was 18 Organization of Economic Cooperation and Development (OECD) countries. The measure of pharmaceutical consumption is the best that is available for these countries.Main Outcome Measures And ResultsConfirming our earlier work, pharmaceutical consumption has a positive and statistically significant effect on life expectancy at 40 and 60 years (significant at the 0.05 level, based on a two-tailed test). The effects are slightly larger than in the earlier work. Turning to DALE, pharmaceutical consumption has a positive and statistically significant effect at birth and at 60 years (significant at the 0.05 and 0.01 levels, respectively), based on a two-tailed test. The effects on DALE are larger than the effects on life expectancy.ConclusionsIncreased pharmaceutical consumption helps improve quality of life, as well as life expectancy.

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