In western Germany alone, each New Chemical Entity (NCE) launched

there from 1988-2004 has saved around 200 working years in every year

that it has been on the market, according to new research published by the Kiel Institute for the World Economy, a German-based centre for international economic research.

The total cost to Germany of its people retiring earlier than at the current official age of 65 is put at around 13% of the nation’s potential Gross Domestic Product (GDP), which is more than 50% above the average for all Organisation for Economic Cooperation and Development (OECD) member nations, say the researchers. And, since the early 1980s, the average age of health-related early retirement in western Germany has dropped from around 58 years to 49 for men and from 55 to 51 for women.

Without the stock of NCEs launched in western Germany since 1988, the

total number of working years lost to disease and injury in 2004 would have been 1% higher, they estimate. Moreover, based on average

disability pensions in 2003 of 703 euros for men (who accounted for

around 70% of lost working years) and 589 euros for women, they put

the gain to the public pension system at 140 million euros annually,

adding that the total savings from all 86 NCEs launched in the 17-year period “is likely to have been at least 10 times higher.”

Looking at the situation in Germany as a whole, the researchers say

the impact of NCEs, while still highly significant, is lower. This may be due to a lower uptake of new medicines in the eastern part of the country, and also to the mass restructuring of former East German industries in the early 1990s, during which many less healthy workers joined the ranks of the long-term unemployed and, therefore, ceased to be candidates for early retirement on medical grounds.

Innovation for welfare gains

“Innovation in medical technology is an important, albeit neglected source of potentially large welfare gains, when a country wishes to cushion the economic impact of population aging by enabling its people to extend their productive working lives,” commented project leader Dr Michael Stolpe.

The findings have been welcomed by the Association of the British

Pharmaceutical Industry, which has been calling for a wider discussion of the issues relating to value for money in health care, in light of the recent Office of Fair Trading (OFT) and National Audit Office (NAO) reports.

Speaking to PharmaTimes World News, ABPI director-general Richard Barker said the Kiel report “deserves close study, since it estimates a very important type of value delivered by pharmaceuticals, that of a longer economically productive life. This is just one of the ways in which we believe a broader definition of value will better recognise the value for money new medicines can offer.”