The price of innovation - the role of drug pricing in financing pharmaceutical innovation. A conceptual framework
Metadata
Show full item recordEditorial
MDPI
Materia
Innovation Pharmaceutical industry Health technology assessment (HTA)
Date
2019-03-20Referencia bibliográfica
Moreno, S.G.; Epstein, D. The Price of Innovation—The Role of Drug Pricing in Financing Pharmaceutical Innovation. A Conceptual Framework. J. Mark. Access Health Policy 2019, 7, 1583536. https://doi.org/10.1080/20016689.2019.1583536
Abstract
The debate on drug prices has reached new heights with the controversy around the role of
prices in promoting innovation. Critics claim that prices of innovative drugs are excessive and
argue that lowering prices will not harm the flourishing innovation. On the opposite end, the
pharmaceutical industry insists that restrictive pricing policies will have a detrimental impact on
their ability to generate innovation. Amid these two divergent positions, this manuscript presents
a conceptual framework to better understand the role played by drug prices to influence the
ability of pharmaceutical firms to raise money in capital markets and hence finance pharmaceutical
innovation. We argue that deviations from established value-based pricing principles, by
either firms or payers, will distort access by firms to capital and lead to an undesirable level of
innovation in the long term. We hope that this framework helps policy-makers anticipate the
impact of their proposals, and ultimately guide policies towards setting optimal drug prices as
a means to maximise social welfare.