The economically justifiable price (EJP) reflects the maximum price that could be set for a healthcare intervention, such that it will still be deemed to be an efficient use of limited healthcare resources.  This is often estimated as the price that would result in an incremental cost-effectiveness ratio being equal to, or just below, the willingness to pay threshold.  Of course, this does not mean that a recommendation should be made that the intervention’s price be set to equal its EJP, since there may be many areas of uncertainty in deriving the EJP, and also many other factors may have a bearing on the pricing decision.  In fact, if an intervention’s price were set to equal to its EJP, the net health benefit associated with introducing the intervention would be exactly zero.

 

How to cite: Economically Justifiable Price [online]. (2016). York; York Health Economics Consortium; 2016. http://www.yhec.co.uk/glossary/economically-justifiable-price/