Web Appendix for Drug Innovations and Welfare Measures Computed from Market Demand: The Case of Anti-Cholesterol Drugs

Information about medical conditions are obtained from individuals in the survey who are asked to write about their current medical condition and health history, including when their medical problems began. For each medical event (e.g., doctor visit or prescription drug purchase), individuals are asked about the medical conditions that gave rise to the event. Professional coders take the information provided by the individual and assign one of 5 digit ICD-9 codes (International Classi…cation of Disease Code, Ninth Revision), which describe the individual’s medical condition. To protect the identity of individuals in the sample, the 5 digit ICD-9 code is aggregated into 3 digit ICD-9 codes. The 5 digit ICD-9 codes are also aggregated into 260 clinically meaningfully categories using Clinical Classi…cation Software. In this paper, both the 3 digit ICD-9 codes and clinical classi…cation codes are used to describe an individual’s medical condition. After reviewing