Preface

The pharmaceutical industry and its pricing methods provide an inviting target, easy to disparage and caricature. Even after accounting for discounts and rebates, average prices of leading brand-name drugs in the United States are two to four times higher than they are in Canada, Japan, and many European countries.1 US per capita spending on prescription drugs is more than twice the level in the United Kingdom.2,3 Prices for most new cancer drugs now exceed $100,000 per patient per year of treatment, despite the fact that many of these treatments seem to offer modest gains in life expectancy or lack such evidence at all.4,5 With the advent of ever more targeted and powerful treatments, including cell- and gene-based therapies with multimillion dollar price tags, the need for sensible drug pricing and coverage policies will intensify. Despite the controversies, there are few if any books dedicated to the question of what is a “fair” or “reasonable” drug price and how to think about the question. To be sure, the bookshelves fairly groan with works critical of pharmaceutical company practices, asserting or implying that drugs often deliver poor value for the money. Notable examples in the past decade or so include Protecting America’s Health6; Overdosed America: The Broken Promise of American Medicine7; Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs8; The Truth About Drug Companies: How They Deceive Us and What to Do About It9; Selling Sickness: How the World’s Biggest Pharmaceutical Companies Are Turning Us All Into Patients10; Bad Pharma: How Drug Companies Mislead Doctors and Harm Patients11; Ending Medical Reversal: Improving Outcomes, Saving Lives12; An American Sickness: How Healthcare Became Big Business and How You Can Take it Back13; and PhRMA: Greed, Lies and the Poisoning of America.14 Such accounts tend to highlight examples of disreputable behaviors and devote considerable attention to industry-wide reforms, rather than how to consider the costs and benefits of individual drug therapies.

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