In this fine article in yesterday’s New York Times, Columbia University economist Frank Lichtenberg is quoted as saying that “In general, the benefits of new drugs outweigh the costs by a substantial margin.”
Lichtenberg’s research shows that 40 percent of the increased longevity of life in 52 countries over the past two decades is the result of new drugs. And, as reported by the NY Times, “The cost in pharmaceuticals for an extra year of life was on average $5,000 a person.”
As the NY Times article goes on to conclude – and also as its title (“Health Care Costs Are a Killer, but Maybe That’s a Plus”) suggests – the much-maligned steeply spiraling health-care costs result from a truly remarkable pace of improvement in health care.
Government subsidies for health care certainly do raise these costs higher than they would otherwise be raised, but let’s not lose sight of the fact that more dollars spent on health care bring ever-greater benefits.