• Chart of the Week
  • December 6, 2021

Regressive innovation


The opioid epidemic is a startling example of how a promising medical innovation can have unintended negative consequences.

In a paper in the Journal of Economic Perspectives, authors David Cutler and Edward Glaeser look at how this “technological regress” happened and whether it was caused more by the supply of drugs being prescribed or by demand from patients.

The opioid epidemic began in 1996, along with the availability of the revolutionary new time-released painkiller OxyContin.  In the years following, many believed that the rise in opioid use was driven by demand for painkillers from those with physical pain, depression, despair, and social isolation. 

But the authors show that these demand-side factors were not sufficient to explain the four-fold increase in opioid prescriptions and deaths.





Figure 4 from Cutler and Glaeser (2021)


Figure 4 from the paper shows how opioid prescriptions track the rise in painful conditions reported by patients. The chart compares cohorts in 2001–2002, the earliest period with good pain data, and 2009–2010 when prescriptions peaked. The red columns representing the latter cohort, plotted along the left y-axis, show a modest increase in patients reporting at least two painful conditions. However, prescriptions for opioids grew much faster. The orange and green lines are the share of patients in each cohort that had at least two opioid prescriptions, with the percentage plotted along the right y-axis. A significantly larger share of people with two painful conditions in 2009–2010 had at least two opioid prescriptions than in the earlier cohort. The spike in prescriptions was much larger than the increase in the number of patients reporting two painful conditions. Thus, demand-side factors of increased reports of pain alone only explain a small share of rising opioid use during the decade.

The authors go on to find that the increase in opioid use can better be explained by growth in the supply of pills. Government approval in 1995 of the blockbuster drug OxyContin, then billed as a safer alternative to previous opioids, flooded the market with new opioids prescribed for alleviating pain. Within a few years, it would become clear how dangerously addictive this medicine was.

“When Innovation Goes Wrong: Technological Regress and the Opioid Epidemic” appears in the Fall 2021 issue of the Journal of Economic Perspectives.