In a formal economic evaluation ancillary to the Caffeine for Apnea of Prematurity trial, caffeine was shown to reduce costs while simultaneously improving clinical outcomes. Although these results still apply, the current price of caffeine is substantially higher than when it was introduced. Such pharmaceutical price growth contributes appreciably to medical costs and inflation. In this review, the examples of caffeine and surfactant show how prices are determined for the neonatology formulary. Drivers include small market size, government-imposed barriers to competition designed to encourage innovation, high willingness-to-pay, failure of government buyers to exercise their market power, and asymmetries in knowledge about costs and effects between producers and patients. Many of these factors are exercised at the national policy or market levels. However, by conducting rigorous clinical trials and economic evaluations, neonatologists can still ensure that the drugs they prescribe are both efficacious and represent good use of societal resources.
Keywords: Cost-effectiveness; Costs and cost analysis; Economic; Health services research; Pharmaceutical pricing.
© 2020 Published by Elsevier Ltd.