How Can We Set a Fair Price for Drugs?
Health economist Peter Neumann has a proposal for how to rein in the growing costs of prescription drugs.
“Everyone wants lower drug prices,” says Neumann, the Tufts University School of Medicine professor who directs the Center for the Evaluation of Value and Risk in Health (CEVR) at Tufts Medical Center. “But we’d really like the prices to reflect the value of what the drugs deliver. And that begs the question, how do you measure value and what does it mean?”
Neumann and his CEVR colleagues Joshua T. Cohen and Daniel A. Ollendorf address the issue of fair pricing in their new book The Right Price: A Value-Based Prescription for Drug Costs and in a recent article in the New England Journal of Medicine. They argue that it is possible to measure the value of a drug to a patient and to society, and that such values ought to inform drug pricing.
Neumann spoke with Tufts Now about value-based pricing and how it could help lower drug costs.