Analysis of Trends in Life Expectancies and per Capita Gross Domestic Product as Well as Pharmaceutical and Non-pharmaceutical Healthcare Expenditures.

Life expectancy is a common measure of population health. Macro-perspective based on aggregated data makes it possible to approximate the impact of different levels of pharmaceutical expenditure on general population health status and is often used in cross-country comparisons. The aim of the study was to determine whether there are long-run relations between life expectancy, total healthcare expenditures, and pharmaceutical expenditures in OECD countries. Common trends in per capita gross domestic products (GDPs) (excluding healthcare expenditures), per capita healthcare expenditures (excluding pharmaceutical expenditures), per capita pharmaceutical expenditures, and life expectancies of women and men aged 60 and 65 were analyzed across OECD countries. Short-term effect of pharmaceutical expenditure onto life expectancy was also estimated by regressing the deviations of life expectancies from their long-term trends onto the deviations of pharmaceutical and non-pharmaceutical health expenditures, as well as GDP from their trends. The dataset was created on the basis of OECD Health Data for 34 countries and the years 1991-2010. Life expectancy variables were used as proxies for the health outcomes, whereas the pharmaceutical and healthcare expenditures represented drug and healthcare consumption, respectively. In general, both expenditures and life expectancies tended to increase in all of the analyzed countries; however, the growth rates differed across the countries. The analysis of common trends indicated the existence of common long-term trends in life expectancies and per capita GDP as well as pharmaceutical and non-pharmaceutical healthcare expenditures. However, there was no evidence that pharmaceutical expenditures provided additional information about the long-term trends in life expectancies beyond that contained in the GDP series. The analysis based on the deviations of variables from their long-term trends allowed concluding that pharmaceutical expenditures significantly influenced life expectancies in the short run. Non-pharmaceutical healthcare expenditures were found to be significant in one out of four models (for life expectancy of women aged 65), while GDPs were found to be insignificant in all four models. The results of the study indicate that there are common long-term trends in life expectancies and per capita GDP as well as pharmaceutical and non-pharmaceutical healthcare expenditures. The available data did not reveal any cause- effect relationship. Other factors, for which the systematic data were not available, may have determined the increase in life expectancy in OECD countries. Significant positive short-term relations between pharmaceutical expenditures and life expectancies in OECD countries were found. The significant short-term effect of pharmaceutical expenditures onto life expectancy means that an increase of pharmaceutical expenditures above long-term trends would lead to a temporary increase in life expectancy above its corresponding long-term trend. However, this effect would not persist as pharmaceutical expenditures and life expectancy would converge to levels determined by the long-term trends.