111 Pages Posted: 24 Jan 2025 Last revised: 23 Feb 2025
Date Written: January 01, 2025
Abstract
This study evaluates drug regulation in the United States by examining a product that was unexpectedly judicially exempted from drug regulation in 2010: e-cigarettes. We compare these effects to nicotine replacement therapy, which was not exempted. Our analysis shows that this exemption led to significant increases in e-cigarette innovation, as evidenced by patent applications. Leveraging differences in smoking rates across demographic groups prior to e-cigarette introduction, we find that from 2011 to 2019, e-cigarettes saved 677,000 life-years, or approximately 1/3 the estimated benefit of early HIV/AIDS drugs through year 2000, and increased social surplus by $8 billion annually. We demonstrate that reduced smoking is a key mechanism explaining this mortality reduction, with statistically significant smoking reductions proceeding mortality reductions by approximately 4 years.
Keywords: drug regulation, mortality, innovation, patents, e–cigarettes, smoking, nicotine replacement therapy
Declaration of Interest
None.
Funder Statement
Research reported in this publication was supported by the National Institute On Drug Abuse of the National Institutes of Health under Award Number R01DA045016 and by the National Cancer Institute and Food and Drug Administration Center for Tobacco Products under Award Number U54CA229974. The content is solely the responsibility of the authors and does not necessarily represent the official views of the National Institutes of Health or the Food and Drug Administration.
JEL Classification: I12, I18, D62
Suggested Citation:
