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Health Affairs, Vol 19, Issue 2, 92-109
Copyright © 2000 by Project HOPE

Journal Article

Are pharmaceuticals cost-effective? A review of the evidence

The argument that prescription drugs are cost-effective has been made both by the pharmaceutical industry to support rising drug prices and expenditures, and by advocates of expanded drug coverage for elderly and low-income persons. A new database of 228 published cost-utility analyses sheds light on the issue. According to published data, some drugs do save money or are cost-effective, but the issue depends critically on the context in which the drug is used and the intervention with which it is compared. Cost-utility analyses funded by the drug industry tend to report more favorable results than do those funded by nonindustry sources. Cost-effectiveness analysis can help policymakers to determine whether drugs and other interventions offer value for money.

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