The impact of new drug launches on the loss of labor from disease and injury: evidence from German panel data.

We study the impact of new drug launches on early retirement due to disease and injury in the German labor force between 1988 and 2004. We show that new drug launches have substantially helped to reduce the loss of labor at the disease-level over time. In Western Germany alone, each new chemical entity is estimated to have saved on average around 200 working years in every year of the observation period. Controlling for individual determinants of retirement, the 2001 reform of pension laws appears to have led to further reductions in the loss of labor from disease and injury.