Pricing Pharmaceuticals: Value Based Pricing in What Sense?
(2008; 4 pages)


Reimbursement of pharmaceuticals ought to provide both incentives for and reward innovation, as well as set a price which reflects the market value of the product. In other words reimbursement must reward both dynamic and static efficiency in the pharmaceutical sector. Within the UK a debate has emerged concerning whether the Pharmaceutical Pricing and Reimbursement Scheme, a profits based regulatory scheme, should be replaced with a value based pricing scheme. This article defines these competing reimbursement schemes and outlines their relative costs and benefits.

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