I want a new drug: pharmaceutical spending.

• Author: Bailey, Ronald
• Position: Citings - Brief article

MARCIA ANGELL, former editor of The New England Journal of Medicine, has argued that Americans spend so much money on pharmaceuticals partly because many of the drugs people now take "are more likely to be expensive new ones instead of older, cheaper ones." But a new study from the Manhattan Institute suggests the extra money is well spent.

Columbia University economist Frank Lichtenberg analyzed patterns in the dispensing of prescription drugs in 49 states between 1995 and 2004. He examined Medicaid prescriptions in 30 different therapeutic groups and used Food and Drug Administration data to determine the year each drug went onto the market. He then looked at disability trends in each state.

States that adopted new...