Drug Pricing in Theory and in Practice: Value in Health Showcase

The pricing of medicines is a key policy issue affecting efficiency, access, and investment in innovation. In this Forum, we showcase 3 new contributions to theory and evidence on pricing published in Value in Health. We begin with an author presentation of Value in Health 2025 Paper of the Year, "Patient Welfare Implications of Indication-Specific Value-Based Pricing (ISVBP) of Multi-Indication Drugs." ISVBP varies drug prices across users. The authors discuss the patient and social welfare implications of ISVBP and present their theoretical analysis. Results show that ISVBP is not necessarily patient welfare improving, suggesting ISVBP should be carefully evaluated and implemented. Next, we consider Europe's experience with international reference pricing (IRP), and its implications for the proposals to introduce IRP in the United States: "Referencing Drug Prices of Other Countries May Not Sustainably Lower Prices in the United States: Lessons From Europe." The authors note that IRP in Europe has resulted in delayed or no access in many countries, without sustainably reducing price levels. While lowering US drug prices is important, doing so through IRP is ill-advised. Finally, we consider evidence presented in a new Value in Health paper reporting "The Cost-Effectiveness of the 15 Drugs Selected for IPAY 2027 CMS Drug Price Negotiation." This forum will be introduced by Value in Health Editors-in-Chief, C. Daniel Mullins and Nancy J. Devlin, who will moderate a panel discussion among the presenting authors of each paper, including audience Q&A. The Forum will aim to identify remaining research priorities and evidence gaps concerning pricing.