Economically justifiable price

The economically justifiable price (EJP) represents the maximum price at which a healthcare intervention would still be considered an efficient use of limited healthcare resources. It is often estimated as the price that would result in the incremental cost-effectiveness ratio of the intervention being equal to, or just below, the relevant cost-effectiveness threshold. While providing an important benchmark, the EJP does not dictate the actual pricing decision because there are inherent uncertainties in its derivation and other factors may influence pricing. Notably, if an intervention’s price were set precisely at its EJP, the net health benefit associated with its introduction would conceptually be zero.