The idea behind this approach is that if a drug is deemed to be less cost-effective than other medications, the drug company will have to find a way to justify the greater price in the marketplace. In this approach--in place of the profit motive--price control would be based on the quality of the drug. There is, however, a problem with the fixed price, namely that it will be based on the average cost of an average brand-name drug. In the first place, the average brand-name drug costs far more to develop than is the average generic. In the second place, generic drugs are often made with less than full disclosure of ingredients and risks. In other words, generic companies have a far better idea of what the benefits of a drug would be than do brand-name companies, which is to say that they make better, riskier choices that may not be cost-effective. To prevent excessive drug pricing, we should adopt the following guidelines: Price a new drug or other drug under development based on what the market will pay.
Price drugs that do not appear to be priced appropriately, including those that are priced based on the expected price of generic drugs. Price drugs when they appear to be inexpensive based on the number of years they will take to develop and sell. Ondansetron zofran the development of a drug based on its expected cost for development, including the cost of initial manufacturing of the drug, the cost of development and marketing, and the potential for higher marketing costs over multiple years.
Price drugs if they are a good bet based on their relative relative price to generic versions of the same drug. The best approach in the face of price controls, however, is to avoid a price cap altogether. The only cost-effective way to impose price controls is to require companies to make their products cost-effective.
It is a simple principle that the price of a drug is the price which the market will bear at all times. That does not mean, however, that the price of a drug is the price which the market will bear at one moment of time. As such, as the ondansetron zofran through economic cycles and shifts, we cannot simply rely upon the market to determine how much the price of drugs has changed. We need to look at how the price has changed from the beginning. We need to look at changes in the amount of time that has passed between the introduction of a drug and the introduction of its generic equivalent. The first problem with looking at the price in this way is the problem with time. Even if the price of a drug has changed, this may have reflected not the actual changing price, but the price that the drug would have had at some point in time.