Show simple item record

dc.contributor.authorHoward, David H.
dc.contributor.authorBach, Peter B.
dc.contributor.authorBerndt, Ernst R.
dc.contributor.authorConti, Rena M.
dc.date.accessioned2015-03-25T16:55:59Z
dc.date.available2015-03-25T16:55:59Z
dc.date.issued2015-02
dc.identifier.issn0895-3309
dc.identifier.issn1944-7965
dc.identifier.urihttp://hdl.handle.net/1721.1/96183
dc.description.abstractIn 2011, Bristol-Myers Squibb set the price of its newly approved melanoma drug ipilimumab— brand name Yervoy—at $120,000 for a course of therapy. The drug was associated with an incremental increase in life expectancy of four months. Drugs like ipilimumab have fueled the perception that the launch prices of new anticancer drugs and other drugs in the so-called "specialty" pharmaceutical market have been increasing over time and that increases are unrelated to the magnitude of the expected health benefits. In this paper, we discuss the unique features of the market for anticancer drugs and assess trends in the launch prices for 58 anticancer drugs approved between 1995 and 2013 in the United States. We restrict attention to anticancer drugs because the use of median survival time as a primary outcome measure provides a common, objective scale for quantifying the incremental benefit of new products. We find that the average launch price of anticancer drugs, adjusted for inflation and health benefits, increased by 10 percent annually—or an average of $8,500 per year—from 1995 to 2013. We argue that the institutional features of the market for anticancer drugs enable manufacturers to set the prices of new products at or slightly above the prices of existing therapies, giving rise to an upward trend in launch prices. Government-mandated price discounts for certain classes of buyers may have also contributed to launch price increases as firms sought to offset the growth in the discount segment by setting higher prices for the remainder of the market.en_US
dc.language.isoen_US
dc.publisherAmerican Economic Associationen_US
dc.relation.isversionofhttp://dx.doi.org/10.1257/jep.29.1.139en_US
dc.rightsArticle is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.en_US
dc.sourceAmerican Economic Associationen_US
dc.titlePricing in the Market for Anticancer Drugsen_US
dc.typeArticleen_US
dc.identifier.citationHoward, David H., Peter B. Bach, Ernst R. Berndt, and Rena M. Conti. “ Pricing in the Market for Anticancer Drugs .” Journal of Economic Perspectives 29, no. 1 (February 2015): 139–162. © 2015 American Economic Associationen_US
dc.contributor.departmentSloan School of Managementen_US
dc.contributor.mitauthorBerndt, Ernst R.en_US
dc.relation.journalJournal of Economic Perspectivesen_US
dc.eprint.versionFinal published versionen_US
dc.type.urihttp://purl.org/eprint/type/JournalArticleen_US
eprint.statushttp://purl.org/eprint/status/PeerRevieweden_US
dspace.orderedauthorsHoward, David H.; Bach, Peter B.; Berndt, Ernst R.; Conti, Rena M.en_US
dc.identifier.orcidhttps://orcid.org/0000-0002-6388-0768
mit.licensePUBLISHER_POLICYen_US
mit.metadata.statusComplete


Files in this item

Thumbnail

This item appears in the following Collection(s)

Show simple item record