Pricing policies in the pharmaceutical sector

In this article we analyze the problem of determining the price for new drugs in a market where stringent budget constraints on public expenditure exists and we suggest an innovative methodology to set drug prices. The market is characterized by asymmetry of information and a high proportion of investment in research and development, an element that must be taken into account because it is only through research that it is possible to obtain better drugs. Our proposed method allows one to set the price of new drugs in different market contexts, that is, where less effective alternatives are already, sold or in new markets. We also propose a unified methodology to evaluate the social value of drugs in different markets through the definition of a function of the cost per quality adjusted life year that society is willing to pay.