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Updated: Dec 8, 2025
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Drug Repurposing Hypothesis Generation Using the "RE:fine Drugs" System
Published on: December 11, 2016
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[Pharmaceutical pricing; what is reasonable?]
1Erasmus Universiteit Rotterdam, Institutefor Medical Technology Assessment, Rotterdam.
Nederlands Tijdschrift Voor Geneeskunde
|September 17, 2020
Summary
Understanding research and development (R&D) costs is crucial for drug affordability discussions. Evaluating both R&D expenses and health gains is essential for determining reasonable drug prices.
Area of Science:
- Health Economics
- Pharmaceutical Policy
- Drug Pricing
Background:
- Societal discussions on drug affordability are informed by research and development (R&D) cost investigations.
- The premise is that R&D costs influence the setting of 'reasonable' drug prices.
Purpose of the Study:
- To analyze the role of R&D costs and health gains in determining drug affordability.
- To evaluate the limitations of current cost-based and value-based pricing models.
- To explore alternative approaches for achieving reasonable drug prices.
Main Methods:
- Analysis of cost-based pricing models.
- Evaluation of value-based pricing models considering health gains.
- Conceptual exploration of drug innovation ecosystem redesign.
Main Results:
- High R&D costs may explain high drug prices but do not justify them when health gains are limited.
- Value-based pricing models can neglect R&D costs and focus on avoiding other care costs.
- Both cost-based and value-based approaches are necessary but insufficient alone.
Conclusions:
- Determining reasonable drug prices requires considering both R&D costs and health gains.
- Rethinking the drug innovation ecosystem offers a more promising path to affordability than solely evaluating price reasonableness.
- A holistic approach is needed to balance innovation incentives with patient access and affordability.
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