Imports and TFP at the firm level: the role of absorptive capacity

This paper estimates the effect of the decision to import intermediate goods and capital equipment on Total Factor Productivity (TFP) at the firm level on a panel of Spanish firms (1991–2002). We use two alternative approaches. In the first, we estimate TFP and apply a diff‐in‐diff estimator with a control group constructed by propensity‐score matching. In the second, direct method, we estimate TFP with imported inputs as a state variable in one stage. Both approaches show that the effect of a firm's decision to source intermediates and capital equipment abroad on its TFP depends critically on its capacity to absorb technology, measured by the proportion of skilled labour.     

Adverse selection in credit markets and regressive profit taxation

In many countries, taxes on businesses are less progressive than labor income taxes. This paper provides a justification for this pattern based on adverse selection that entrepreneurs face in credit markets. Individuals choose between becoming entrepreneurs or workers and differ in their skill in both of these occupations. I find that endogenous cross-subsidization in the credit market equilibrium results in excessive (insufficient) entry of low-skilled (high-skilled) agents into entrepreneurship. This gives rise to a corrective role for differential taxation of entrepreneurial profits and labor income. In particular, a profit tax that is regressive relative to taxes on labor income restores the efficient occupational choice.     

The trade-off between innovation and defense industrial policy: A simulation model analysis of the Norwegian defense industry

The paper investigates the trade-off between innovation and defense industrial policy. It presents an agent-based simulation model calibrated for the Norwegian defense industry that compares different policy scenarios and examines the effects of a pending EU market liberalization process. The paper points to two main results. (1) It finds that a pure scenario where national authorities focus on, and provide support exclusively for, either a) international competitiveness or b) national defense and security objectives, is more Pareto efficient than a corresponding mixed strategy where policy makers simultaneously pursue both international competitiveness and defense and security objectives. (2) Under the conditions of the new EU liberalization regime, it finds that a stronger and more visible trade-off will emerge between international competitiveness and national defense and security objectives. Policy makers will have to choose which to prioritize, and set a clear agenda focusing on one of the two objectives.     

Foreign ownership and the credibility of national rating agencies: Evidence from Korea

By analyzing bond price reactions to rating changes in Korea, this study adds a new angle to the existing literature on Global Rating Agencies (GRAs, i.e. Moody’s, S&P’s, Fitch) with higher reputation/independence vs. National Rating Agencies (NRAs) with more in-depth local knowledge. Faced with substantial regulatory burdens, GRAs have chosen to operate indirectly in the Korean domestic market by acquiring local NRAs. In our event study, cumulative abnormal returns following downgrades by a wholly domestically owned NRA tend to dominate those from downgrades by two affiliates of GRAs. This casts doubt on the additional information value of reputation capital acquired through GRA ownership as perceived by emerging markets.     

On inferring individual behaviour from market behaviour in a predetermined quantities model

This article develops the theoretical basis of individual behaviour recovered from market behaviour in a predetermined quantities model. As applied economists argue, an inverse demand system may be empirically sound within the framework of classical demand theory. However, it should not lead to the conclusion that the market responses for changes in quantity should be used to see welfare effects instead of the individual responses by price changes as far as the market is concerned. It shows theoretically and empirically how individual responses can be recovered from market responses in a predetermined quantities model. It suggests that the fundamental results of this article should be used on interpreting empirical results from the predetermined quantities models.     

Pediatric gastroesophageal reflux disease and acid-related conditions: trends in incidence of diagnosis and acid suppression therapy

Abstract

Objective: To describe the incidence of diagnosis of gastroesophageal reflux disease and acid-related conditions (GERD/ARC) throughout childhood and characterize patterns of diagnosis and treatment with proton pump inhibitors (PPIs) and histamine-2 receptor antagonists (H₂RAs).

Methods: Cohorts of GERD/ARC children (age 0–18 years) were identified from a large US administrative claims database covering 1999–2005 using ICD-9 codes. Incidence, healthcare utilization (HCU), costs, therapy discontinuation and switching rates were compared between various age and patient groups.

Results: Between 2000 and 2005 annual incidence of GERD/ARC diagnosis among infants (age ≤1 year) more than tripled (from 3.4 to 12.3%) and increased by 30% to 50% in other age groups. Patients diagnosed by GI specialists (9.2%) were more likely to be treated with PPIs compared to patients diagnosed by primary care physician (PCP). PPI-initiated patients doubled (from 31.5% in 1999 to 62.6% in 2005) and, when compared with H₂RA-initiated patients, were associated with 30% less discontinuation and 90% less therapy switching in the first month, and with higher comorbidity burden and pre-treatment total HCU and costs when diagnosed by GI specialists.

Limitations: The use of an exploratory definition for GERD/ARC, administrative claims data and potential coding errors in diagnosis codes used in selection process may limit the generalizability of the results.

Conclusions: GERD/ARC incidence increased for children of all ages between 2000 and 2005. PCPs made the majority of diagnoses. PPI initiations have now surpassed H₂RA initiations.     

Cost-utility of exenatide once weekly compared with insulin glargine in patients with type 2 diabetes in the UK

Abstract

Objective:

To compare the cost-utility of exenatide once weekly (EQW) and insulin glargine in patients with type 2 diabetes in the United Kingdom (UK).

Research design and methods:

The IMS CORE Diabetes Model was used to project clinical and economic outcomes for patients with type 2 diabetes treated with EQW or insulin glargine. Treatment effects and patient baseline characteristics (mean age: 58 years, mean glycohaemoglobin: 8.3%) were taken from the DURATION-3 study. Unit costs and health state utility values were derived from published sources. As the price of EQW is not yet known, the prices of two currently available glucagon-like peptide-1 products were used as benchmarks. To reflect diabetes progression, patients started on EQW switched to insulin glargine after 5 years. The analysis was conducted from the perspective of the UK National Health Service over a time horizon of 50 years with costs and outcomes discounted at 3.5%. Sensitivity analyses explored the impact of changes in input data and assumptions and investigated the cost utility of EQW in specific body mass index (BMI) subgroups.

Main outcome measures:

Incremental cost-effectiveness ratio (ICER) for EQW compared with insulin glargine.

Results:

At a price equivalent to liraglutide 1.2?mg, EQW was more effective and more costly than insulin glargine, with a base case ICER of £10,597 per quality-adjusted life-year (QALY) gained. EQW was associated with an increased time to development of any diabetes-related complication of 0.21 years, compared with insulin glargine. Three BMI subgroups investigated (<30, 30–35 and >35?kg/m²) reported ICERs for EQW compared with insulin glargine ranging from £9425 to £12,956 per QALY gained.

Conclusions:

At the prices investigated, the cost per QALY gained for EQW when compared with insulin glargine in type 2 diabetes in the UK setting, was within the range normally considered cost effective by NICE. Cost effectiveness in practice will depend on the final price of EQW and the extent to which benefits observed in short-term randomised trials are replicated in long-term use.     

Exenatide BID and liraglutide QD treatment patterns among type 2 diabetes patients in Germany

Abstract

Objectives:

This study evaluated patient and prescriber characteristics, treatment patterns, average daily dose (ADD), and glycemic control of patients initiating glucagon-like peptide 1 (GLP-1) receptor agonists in Germany.

Methods:

The LifeLink? EMR-EU database was searched to identify patients initiating exenatide twice daily (BID) or liraglutide once daily (QD) during the index period (January 1, 2009–April 4, 2010). Eligible patients had ≥180 days pre-index history, ≥90 days post-index follow-up, and a pre-index type 2 diabetes diagnosis. Univariate tests were conducted at α?=?0.05.

Results:

Six hundred and ninety-two patients were included (exenatide BID 292, liraglutide QD 400): mean (SD) age 59 (10) years, 59% male. Diabetologists prescribed liraglutide QD to a larger share of patients (65% vs 35% exenatide BID) than non-diabetologists (51% vs 49%). GLP-1 receptor agonist choice was not associated with age (p?=?0.282), gender (p?=?0.960), number of pre-index glucose-lowering medications (2.0 [0.9], p?=?0.159), pre-index HbA1c (8.2 [1.5%], p?=?0.231) or Charlson Comorbidity Index score (0.45 [0.78], p?=?0.547). Mean (SD) ADD was 16.7?mcg (9.2, label range 10–20?mcg) for exenatide BID and 1.4?mg (0.7, label range 0.6–1.8?mg) for liraglutide QD. Among patients with post-index HbA1c tests, mean unadjusted values did not differ between cohorts. Exenatide BID patients were more likely than liraglutide QD patients to continue pre-index glucose-lowering medications (67.1% vs 60.3%, p?=?0.027) or to start concomitant glucose-lowering medications at index (32.2% vs 25.0%, p?=?0.013); exenatide BID patients were less likely to augment treatment with another drug post-index (15.8% vs 22.5%, p?=?0.027).

Limitations:

Results may not be generalizable. Lab measures for clinical outcomes were available only for a sub-set of patients.

Conclusions:

Results suggested that some differences exist between patients initiating exenatide BID or liraglutide QD, with respect to prescribing physician specialty and pre- and post-index treatment patterns. Both GLP-1 receptor agonists showed comparable post-index HbA1c values in a sub-set of patients.     

Economic outcomes of exenatide vs liraglutide in type 2 diabetes patients in the United States: results from a retrospective claims database analysis

Abstract

Objective:

The safety and efficacy of the GLP-1 receptor agonists exenatide BID (exenatide) and liraglutide for treating type 2 diabetes mellitus (T2DM) have been established in clinical trials. Effective treatments may lower overall treatment costs. This study examined cost offsets and medication adherence for exenatide vs liraglutide in a large, managed care population in the US.

Methods:

This was a retrospective cohort analysis comprising adult patients with T2DM who initiated exenatide or liraglutide between 1/1/2010 and 6/30/2010 and had 6 months pre-index and post-index continuous eligibility. Patients were propensity score-matched to controls for baseline differences. Medication adherence was measured by proportion of days covered (PDC). Paired t-test and McNemar’s test were used to compare outcomes.

Results:

Matched exenatide and liraglutide cohorts (n?=?1347 pairs) had similar average total 6-month follow-up costs ($6688 vs $7346). However, exenatide patients had significantly lower mean pharmacy costs ($2925 vs $3272, p?<?0.001). Among liraglutide patients, patients receiving the 1.8?mg dose had significantly higher average total costs compared to those receiving the 1.2?mg dose ($8031 vs $6536, p?=?0.026), with higher mean pharmacy costs in the 1.8?mg cohort ($3935 vs $3146, p?<?0.001). There were no significant differences in inpatient or outpatient costs or medication adherence between groups (mean PDC: exenatide 56% vs liraglutide 57%, p?=?0.088).

Limitations:

The study assumed that all information needed for case classification and matching of cohorts was present and not differential across cohorts. The study did not control for covariates that were unavailable, such as HbA1c and duration of diabetes.

Conclusions:

Patients initiating exenatide vs liraglutide for T2DM had similar medication adherence and total healthcare costs; however, exenatide patients had significantly lower total pharmacy costs. Patients prescribed 1.8?mg liraglutide had significantly higher costs compared to those on 1.2?mg.