This paper provides an analysis of the benefits to society from the conversion of nicotine replacement drugs (nicotine patches and gum) in 1996 from sale by prescription only in the United States to over-the-counter (OTC) sales. To estimate these benefits, we first estimate statistical demand functions for nicotine patches and gum. Second, we calculate the effects of OTC conversion on sales of each type of nicotine replacement drug. Third, we survey the literature on the effects of nicotine replacement drugs on total quits of cigarette smoking. Fourth, we survey the literature on the effects of quits achieved on expected lifespan, and on the estimated monetary value of longer lives from smoking cessation. Finally, we use all this evidence to calculate the value of the social benefits of the OTC conversion to the US. As a result of the OTC conversion, consumption of nicotine replacement drugs has increased substantially, by 78-92% for nicotine patches and 180% for nicotine gum. We estimate that the resulting increase in smoking cessation generated annual net social benefits of the order of magnitude of 1.8-2 billion dollars, based on conservative estimates both of the number of quits achieved and the value of added quality-adjusted life years from the reduced smoking.
Copyright 2002 John Wiley & Sons, Ltd.