Posted by Michael Wonder on 15 Oct 2019
Accounting for hope: using ‘mean survival gain’ to price new cancer drugs
14 October 2019 - Outrage about the rising prices of prescription drugs has put cancer drugs in the spotlight. But there’s an important question that needs to be asked: What is the best pricing metric to use for them?
Economists like us spend a lot of time worrying about this in a more general context. When the government computes its consumer price index, for example, it thinks about the quality of the goods that households purchase.
A computer purchased 10 years ago is almost unrecognisable compared to one purchased today, so the consumer price index must adjust for CPU speed, memory, storage capacity, and more.
