Demystifying Drug Pricing

Recommendation

Take-Aways

• Drug pricing is complex and involves many factors beyond mere manufacturing costs, including expensive research and development, the high risk of drug-industry investments, and the money drug companies lose on their failed projects.
• In “value-based pricing,” every year that a drug adds to a person’s life is worth a standard, yet controversial, $100,000 per consumer.
• Thus, companies set a price somewhere between the manufacturing cost and the $100,000-per-year value, a range that is too permissive. The challenge is to achieve fair prices without discouraging needed drug innovation.

About the Speakers