This might be a shock to some, but new pharmaceutical drugs can be worth the higher price. The latest example is from drugs for colorectal cancer. From the abstract:
The average price of treating a colorectal cancer patient with chemotherapy increased from about $100 in 1993 to $36,000 in 2005, due largely to the approval and widespread use of five new drugs between 1996 and 2004….a hedonic price index and two quality-adjusted price indices show that prices have actually remained fairly constant over this 13-year period, with slight increases or decreases depending on a model?s assumptions.
