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Finance and Financial Management

Health Care Management Papers

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Want More Value From Prescription Drugs? We Need To Let Prices Rise And Fall, Dana. P. Goldman, Adam Leive, Darius Lakdawalla Dec 2013

Want More Value From Prescription Drugs? We Need To Let Prices Rise And Fall, Dana. P. Goldman, Adam Leive, Darius Lakdawalla

Health Care Management Papers

The high price of some cancer drugs has recently come under attack by the medical profession. We examine the reasons behind the pricing strategies of cancer drugs. On the one hand, prices should reflect value and research demonstrates that the health benefits from novel cancer drugs have been enormous in terms of additional years of life patients can now enjoy. This provides some justification for the high price tag of these drugs. On the other hand, drug pricing is also a product of a hidebound reimbursement system that does a poor job in letting prices adjust to new information about ...