Analysis of the price for new drugs that reflect their effectiveness

What is it about?

In the recent past value for money has become more and more important in health care and since drugs represent an important source of expenditure setting their price bas become a priority. In this article we show the effects on firms profit and consumer welfare (expenditure and drug availability) of alternative methods to set the price of new drugs using their expected effectiveness

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Why is it important?

Drug expenditure is one of the fastest growing item in health care and controlling its growth is a priority for both public and privately financed health care systems. However price may influence the availability of drugs hence the importance of studying both price and availability