Pricing Pharmaceuticals for the Common Good: Is Value-Based Pricing Still the Right Solution?

ISSUE: Pricing pharmaceuticals for the common good: is Value-Based Pricing still the right solution?

OVERVIEW: Pharmaceutical innovation has contributed significantly to increasing life expectancy and quality of life globally; eased pressures on healthcare systems; and provided a range of broader benefits including contributing to improved workforce productivity and economic growth. Yet the pace and cost of breakthrough innovation are raising concerns around health system affordability and access challenges. Stakeholders are searching for a triple win that delivers for the common good by meeting the needs of patients, payers, and innovators both today and in the future.

Many countries claim to support value-based pricing whilst adopting policies (e.g. external reference pricing) that undermine it. Some advocates propose solutions including price transparency and cost-plus pricing claiming that they will lead to lower prices and greater access without noticeable impacts on the flow of innovation. Little attention is put to the demand side, and the needs of constrained healthcare systems.

In this panel we ask whether value-based pricing and the current industry business model is still fit for purpose, by examining multiple perspectives:

Thomas Allvin will present a recent conceptual framework - Equity-Based Tiered Pricing - as an evolution of VBP designed to ensure that ability to pay across countries is considered in the prices of innovative medicines, s, to reduce unavailability of new medicines and access delays.

Oriol Sola-Morales will discuss VBP pricing approaches that can help meet the needs of all stakeholders in Europe. In light of the EU HTA regulation, he will discuss challenges in implementing a European strategy for value measurement to support an EU VBP pricing approach, and advocate for Value-Based HTA as a way forward.

Eleanor Bell will discuss how far competing pricing models deliver for the common good based on economic theory, empirical scientific literature, and recent OHE research.