How much has pharmaceutical innovation reduced Canadian mortality rates?

New research from a pharmaceutical economist has found that drugs developed decades ago has greatly reduced Canadian mortality rates and saved on the use of hospital services. 

In his study, Frank R Lichtenberg, PhD, a Columbia University Professor and affiliate of the U.S. National Bureau of Economic Research, looked at whether the new drugs approved by regulators in earlier years had any impact on mortality rates or use of hospital services in Canada during the period 2000–2022.  

Funded by Innovative Medicines Canada, the national industry association of research based pharmaceutical companies, the study was published in Canadian Health Policy, a Canadian Health Policy Institute (CHPI) journal. The CHPI is a non-governmental think tank. 

In the study abstract, Lichtenberg states, “estimates imply that, in the absence of drug approvals during 1974-1995, the number of life-years lost before age 75 would have been 49% higher in 2022.”  Drug approvals during 1974-1995 reduced life-years lost before age 75 in 2022 by 847 thousand, he found. 

Hospital services utilization 

In a separate analysis of hospital use, Lichtenberg estimated that “in the absence of drug approvals during 1970-1991, the total number of hospital days would have been 55% higher in 2022.” 

With national spending on hospitals in 2022 reaching CA$143 billion, lower hospital use means that significant costs have been avoided for Canadian taxpayers due to these new medicines, stated a CHPI press release issued Aug. 11 on the study. 

Lichtenberg elaborated on these savings. "Pharmaceutical innovation occurring in earlier years saved 14.2 million hospital days that otherwise would have been used. The estimated reduction in 2022 hospital expenditure attributable to drug innovation during 1970-1991 was CA$78.7 billion – twice as large as 2022 national expenditure on all prescribed medicines and related supply chain costs totaling CA$37.4 billion." 

He added that these estimates “may be conservative, because the models do not fully capture the health impacts of COVID-19 vaccines.”