1. The potential contribution of increased new drug use to Russian longevity and health Frank R. Lichtenberg frank.lichtenberg@columbia.edu Columbia University and National Bureau of Economic Research

2. Introduction Life expectancy at birth in Russia is currently 9 years lower than it is in the U.S. (70 vs. 79 years). The Russian government seeks to increase Russian life expectancy by 4 years by 2018. The primary policies that the government has implemented to increase Russian life expectancy are policies aimed at reducing smoking and alcohol consumption. Even if these policies are extremely effective, they are likely to increase life expectancy by only a small fraction of the amount sought by the government. To achieve substantial gains in Russian life expectancy by 2018, significant additional changes will be required. The adoption and diffusion of new drugs can make a substantial contribution to Russian longevity growth. 2

3. Hypothesis: longevity and health are directly related to Rx quality Rx quality  Longevity and health ↑ Rx quality is not directly observable, but… 3

4. Hypothesis: Rx quality is directly related to Rx vintage Rx vintage  Rx quality  Rx vintage is defined as the original FDA approval year of the drug’s active ingredient(s) 4 Longevity and health ↑

5. Correlation across countries between 2000-2009 change in life expectancy at birth and change in drug vintage, controlling for changes in income, unemployment rate, education, urbanization, health expenditure, immunization rate, HIV prevalence and tuberculosis incidence Note: size of bubble is proportional to country population. Lichtenberg FR (2012). “Pharmaceutical Innovation and Longevity Growth in 30 Developing and High-income Countries, 2000-2009,” Health Policy and Technology 3(1): 36-58, March 2014.“Pharmaceutical Innovation and Longevity Growth in 30 Developing and High-income Countries, 2000-2009,” 5

6. How does access to new drugs in Russia compare with access in other countries?

7. Number of drugs whose world launch year was between 2000 and 2010 launched by end of 2011 7

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12. Effect of expanded access to new drugs on life expectancy If the fraction of “new” (post-1990) drugs increased from its actual value in Russia (1%) to the mean value of all 31 countries (9%), life expectancy at birth in Russia would increase by about 2.1 years. As discussed above, this estimate controlled for the effects on life expectancy of real per capita income, the unemployment rate, mean years of schooling, the urbanization rate, real per capita health expenditure (public and private), the DPT immunization rate among children ages 12-23 months, and some risk factors (HIV prevalence and tuberculosis incidence). 12

13. Why is there less access to new drugs in Russia than in other countries?

14. Possible reasons for the fact that access to new drugs is lower in Russia than it is in other countries with similar incomes Public per capita pharmaceutical expenditure in Russia ($16) was less than half of the average expenditure in all high-middle income countries ($34) Factors may inhibit or delay licensing of new medicines 14

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17. Factors that may inhibit or delay licensing of new medicines Lack of transparency in the registration system Unclear deadlines for registration, lack of clarity concerning necessary steps in the process Unlike other regulatory jurisdictions, the absence of a legal procedure for pre-submission meetings with experts on Clinical Trials (CT) protocol/design for innovative drugs The absence/rare opportunity to meet with experts during the submission process The lack of strong legal protection from disclosure of commercially valuable data submitted to the Ministry of Health The law didn’t specify clear labeling requirements concerning indications/instructions for use The Russian Pharmacopeia was not harmonized with any of the leading reference pharmacopeias, leading to out-of-date quality requirements No specialized requirements for the authorization/licensure of biosimilars 17

18. Summary The adoption and diffusion of new drugs can make a substantial contribution to Russian longevity growth. Almost half of the 222 drugs launched in the U.S. during the period 2000-2010 had not been launched in Russia by the end of 2011. The drugs used in Russia are about 15 years older than those used in the U.S., and over 20 years older than the drugs used in the top five countries. The mean launch year of drugs used in Russia is low, even relative to other countries with similar income levels. Only 1% of the drugs consumed in Russia in 2009 were less than 20 years old. In 30 other developing and high-income countries, the mean fraction of drugs consumed in 2009 that were less than 20 years old was 9%. My estimates indicate that if the fraction of drugs consumed that were less than 20 years old increased from its actual value in Russia (1%) to the mean value of all 31 countries (9%), life expectancy at birth in Russia would increase by about 2.1 years. Expanded use of new drugs will also increase the ability of the population to work, attend school, and perform activities of daily living, and it will reduce the utilization of non- pharmaceutical medical services, such as hospitals, nursing homes, and physician office visits. Although private per capita pharmaceutical expenditure in Russia was slightly higher than average in all high-middle income countries during 2004-2006, public per capita pharmaceutical expenditure in Russia was less than half of the average in all high-middle income countries. 18