Rising costs of prescription drugs have placed an increased emphasis on aligning the prices of drugs with their value. But how do we measure a drug’s value? According to Anupam Jena and coauthor Dana Goldman in an op-ed for STAT, measuring value is more difficult than might be expected.
Jena and Goldman argue that the dollar value of a drug—typically defined by it monetary value of its clinical benefit minus its price—can range dramatically depending on what assumptions go into calculating value. This ambiguity limits the ability of patients, payers and policymakers to use information on drug value reliability. Knowing which patient outcome data to use, what drug price is relevant, and how to assess cost-effectiveness over time are key metrics that result in potentially drastically different and sometime inaccurate measurements of drug value.
Jena and coauthors said,
Health technology assessments conducted to measure the value of drugs should recognize that health is a valuable investment, much like owning a home. Both may entail high up-front purchase costs. We’ve solved the high cost of buying a home with home mortgages, not by policies that lower home prices. We should do something similar for drugs, particularly those that cure diseases, which are likely to have up-front costs in the hundreds or thousands, if not millions, of dollars.