Stakeholder Perspectives

Understanding Value: Manufacturers’ Perspectives

John Watkins, PharmD, MPH, BCPS
, Premera Blue Cross, Mountlake Terrace, WA, USA

About the author_WatkinsEditor’s note: This is part 5 of a series exploring what value means to the stakeholders in healthcare. Part 1, “Expanding the Value Conversation,” appeared in the May/June 2021 issue, part 2, “Understanding Value in Cancer Care,” appeared in the July/August 2021 issue, part 3, “Understanding Value: The Providers’ Perspective,” appeared in the November/December 2021 issue, and part 4, “Understanding Value: Patients’ Perspectives,” appeared in the March/April 2022 issue.

Today’s pharmaceutical manufacturers must demonstrate the value of their products to multiple audiences. Larger companies have internal health outcomes departments whose experts develop value proposition statements for the various stakeholder groups. Smaller companies that lack internal outcomes teams can hire consultants to do the work. As we have seen in previous articles in this series, stakeholder groups have diverse overlapping perceptions of healthcare value: health economists think of it as incremental cost utility; providers see it from the point of care; and patients experience it in the realities of daily life with their diseases. Certain elements are lacking in each stakeholder’s perspective. To promote more holistic value determinations, an ISPOR Special Task Force has identified additional domains that are important to various audiences and could be added to existing value frameworks.1


Value to a variety of audiences

If a new drug is to succeed, the manufacturer must demonstrate its value to different audiences as it progresses through the product lifecycle. Unless investors expect a reasonable return on a product in preclinical development, it will never get beyond the laboratory. The product development team must then convince clinical investigators and volunteer patients to participate in a series of trials. Investigators want publishable results with positive outcomes. Study patients hope for a cure, or at least an improvement over standard treatment options. Some trial participants value the hope that the results will benefit future patients with the same disease. Throughout the process, corporate decision makers must continue believing that the drug’s prospects justify development costs.

When the trials are completed, the manufacturer must convince the US Food and Drug Administration (FDA) that their product is efficacious (reasonably likely to benefit patients) and safe (unlikely to cause offsetting harm). In the interest of making beneficial treatments available to patients as soon as possible, regulators often accept intermediate endpoints from short-term trials. These intermediates may be insufficient to convince payers, providers, and patients that the drug will produce meaningful clinical outcomes, but this practical compromise balances rapid access to the drug with assurance of its real effectiveness. In any case, the data should be the primary rationale for FDA approval, but it is the manufacturer’s responsibility to ensure that it is packaged correctly to avoid misinterpretation.

Payers want more robust evidence of value. For chronic diseases, this requires longer trials with real clinical endpoints. Some payers require models of cost-effectiveness and affordability. In determining coverage policy, payers may seek to limit use to patient subgroups for whom the evidence predicts greater net benefit. Providers may be less concerned with budget and cost-effectiveness analysis, but they too want to see real clinical outcomes that bring value to patients and achieve their clinical goals. They value improvements in therapy that save time and improve their workflow and productivity and that of their office staff. 

In the absence of a cure, patients with chronic disease want to live longer, improve quality of life, and maintain the ability to function in roles that are important to them. Value to patients is very personal. Surveys of patient groups with the same disease provide aggregate overviews, but only the individual can say what matters most. Robust dialogue with patient representatives should begin early in the drug development process and continue through launch and beyond. Based on a literature review, Cook et al concluded that, “Companies who embrace the involvement of patients in early product development, prior to beginning pivotal clinical trials, are most likely to ensure a fit of their products to the real needs of the patients and provide the therapeutic outcomes they are looking for.”2

Payers and providers want to know how well a drug will work outside of a controlled trial setting—in the real world, where protocols are not strictly followed and patients don’t always take their medicine or follow medical advice. Real-world patients may differ from those in the clinical trials, which exclude complex patients to reduce the likelihood of confounding. Real-world observational studies can help answer these questions, and most manufacturers are willing to sponsor these studies. Using a drug in patients expected to respond well to treatment will improve providers’ perceptions of its value.


Value shaped by those they serve

Manufacturers have their own perceptions of value apart from what they present to their external audiences. A manufacturer’s definition of value affects their approach to drug development, the diseases they target, and the types of drugs they choose to research. “Our perspective on value in healthcare focuses on treatments,” says Patrick Holmes, MS, Science and Innovation Policy Team Lead at Pfizer. “We are committed to advancing medicines wherever we believe we can make a meaningful difference for patients.” With their extensive resources, most large companies like Pfizer simultaneously develop a variety of products that target a broad range of diseases. Small companies generally have a narrower focus. For example, Pfizer’s Comirnaty mRNA COVID vaccine is just one of many products launched since 2020 that are making a difference for patients, while its major competitor, Moderna’s Spikevax, is the company’s only commercialized product, although they have other mRNA vaccines in various stages of development.3  

Phillip Buck, senior director, Health Economics and Outcomes Research at Moderna, believes that value is “rapid implementation of innovative healthcare interventions, including safe and effective vaccines and transformative medicines that contribute to improved real-world public health outcomes and represent good value-for-money.” The public health focus of this vision statement aptly describes Moderna’s mRNA platform, whose salient characteristic is its agility, the ability to quickly develop vaccine for a new virus, and rapidly produce large quantities for mass vaccination.

The same could be said of Comirnaty, but Pfizer’s vision reflects the variety of its products and patient populations. It is both broad and specific, as Holmes explains: “The value of a treatment always starts with the clinical benefit it provides to patients…the degree to which a treatment mitigates or solves the medical condition that the patient has been diagnosed with and for which the treatment has been selected.” It is more than that, he continues. It also encompasses “other considerations, such as how a treatment affects a patient’s family, social life, and ability to work.” His definition includes “how healthcare providers view the treatment in the context of its benefits and risks. Providers are closest to patients, so their perception of the value of a treatment is critical.”

To complete the holistic picture, Holmes explains, “Value also includes layers further from patients, such as the impact of a treatment for employers, insurers, and manufacturers. From our perspective, these viewpoints are important to capturing the full value of a treatment but should be considered secondarily to the benefits of the treatment to patients.” It also incorporates “societal and humanistic elements (eg, reduced caregiver burden, peace of mind, health equity, and reduced fear of contagion).”

“The value of a treatment always starts with the clinical benefit it provides to patients...the degree to which a treatment mitigates or solves the medical condition that the patient has been diagnosed with and for which the treatment has been selected.” — Patrick Holmes, MS


Genentech’s Elaine Yu, PharmD, MS, head of Evidence for Access Oncology, includes all of the above in her definition of value, plus total treatment cost. In some cases, an expensive drug may greatly reduce other costs, offsetting the drug’s price. But with others, such as CAR T-cell therapy, the concomitant costs can almost double the already high drug price. “At Genentech, we aim to reduce total cost of care whenever possible,” Yu says. Genentech’s aim in pursuing value in cancer care is threefold: improving patient outcomes, helping patients maintain or improve health-related quality of life, and maximizing gains to society.4  


Value perceived as unmet need

Unmet need has always been a key factor driving pharmaceutical research and guiding its direction. Assessment of need should be a realistic measurement of the gap between current standard of care and the ideal state, devoid of wishful thinking. Greater unmet need predicts more demand for a product that addresses that need. It is relatively easy to identify need and to estimate the number of target patients with the need, but more difficult to predict the extent to which the proposed treatment will actually fill the gap that has been identified. The manufacturer must make the decision to move the product forward in testing without knowing how well it will meet the need. As a senior outcomes leader at a large biotechnology drug manufacturer explains, “The value of a new technology is always relative to the existing standard of care for the disease of interest. New drugs do not have value in a vacuum; they have value relative to the next best alternative.”

"New drugs do not have value in a vacuum; they have value relative to the next best alternative.”

“Patients may quantify value in a very different way, compared to a payer or a health economist,” he observes. “They might rank safety much higher. They might attribute more value to immediate improvements in quality of life, relative to theoretical improvements in long-term survival.” Because the FDA does not require head-to-head trials “relative to an existing standard of care, it becomes very difficult to assess an incremental value. The system as a whole could do a better job at weeding out drugs with low or zero value earlier in the development process.”

The importance of achieving success for a new product biases the development team toward an optimistic outlook. As with one’s children, it is easy focus on positive qualities and overlook shortcomings, so that, when a product reaches market, the manufacturer is surprised at its lukewarm reception. Seeking input from patients, physicians, and payers throughout the development process will avoid this situation, since development can be halted before the large investment required to stage late phase clinical trials.

Gene therapy and other cutting-edge treatments may cure diseases that have always been chronic, lifelong conditions. The broader term “transformative” characterizes treatments that may not actually cure, but may halt or radically alter the progression of a chronic disease, a goal which for Novartis is an integral part of their strategic vision. “In our pursuit of transformative treatments, we challenge medical paradigms and explore possibilities to cure disease, intervene earlier in chronic illnesses, and find ways to dramatically improve quality of life.”5  More attention to finding cures addresses major unmet needs and could balance the strategy of prioritizing maintenance medications for chronic diseases, an approach that made business sense, but as the COVID pandemic demonstrated, has taken resources from the development of vaccines and antiviral drugs.


Value addressing healthcare disparities

As we become more aware of how our healthcare system has overlooked racial and ethnic minorities and other underserved groups, many manufacturers are seeking to expand diversity in clinical trial populations and increase applicability of results to minority patients. The Beacon of Hope project is taking concrete steps to change this. “Health disparities affecting minority groups are endemic in the United States. Compared with non-Hispanic Whites, Blacks/African Americans have a lower life expectancy, a higher mortality rate from cancer, a dramatically greater likelihood of diseases such as asthma, and significantly increased rates of infant mortality,” according to the project’s Web page. Vaccine hesitancy during the COVID pandemic has revealed the extent of minority groups’ distrust in the system that further increases disparities in care. The project is working with historically Black colleges and universities to improve education of the next generation of Black professionals, support the development of digitally enabled clinical trial centers that will increase enrollment of patients of color, support research and validation of existing standards that drive diagnosis and clinical practice guidelines to ensure fairness to minorities, and address climate and environmental factors that exacerbate health disparities for minorities.6


“To make sure all patients can benefit from our medicines, we must understand how these medicines work in diverse populations, especially in groups that have been historically underrepresented in clinical trials.” —Dietmar Berger, MD


Other manufacturers are encouraged to join Novartis in the Beacon of Hope project. “Merck is proud to participate in a collaboration focused on improving enrollment of underrepresented people into clinical trials with the common goal of ensuring these trials appropriately reflect the diversity of the patients we serve worldwide,” notes Andy Lee, Head of Global Clinical Trial Operations at Merck.7 Sanofi has joined the project as well. “To make sure all patients can benefit from our medicines, we must understand how these medicines work in diverse populations, especially in groups that have been historically underrepresented in clinical trials,” explains Dietmar Berger, MD, chief medical officer, Global Head of Development at Sanofi.8

Efforts to reduce disparities are not limited to developed countries. The Access to Medicines Foundation, an independent nonprofit organization based in The Netherlands, “aims to advance access to medicine in low- and middle-income countries by stimulating and guiding the pharmaceutical industry to play a greater role in improving access.” The Foundation publishes an annual index of major manufacturers, ranking them based on their efforts in this area. The 2021 index top 10 companies were, in order, GlaxoSmithKline, Novartis, Johnson & Johnson, Pfizer, Sanofi, Takeda, AstraZeneca, Merck, Roche, and Novo Nordisk.9 


Value of small companies entering the market

A number of small companies with innovative technologies or products are entering the market, targeting rare diseases, such as spinal muscular atrophy, which was featured in a previous article. The gene therapy for this disease was developed by AveXis pharmaceuticals. Companies like this will be an important part of healthcare’s future.

Not all small companies are innovators. Some companies sell branded versions of older drugs, with enhancements that seldom offer sufficient incremental benefit to justify the substantially higher price. These companies can be distinguished by the value proposition stated on the company’s website, whether it is specific and detailed. Less innovative companies usually describe their value in vague generalities.



As with the stakeholder groups featured in previous articles, there is a great deal of variation among pharmaceutical manufacturers. Companies vary in size, culture, vision, country of origin, customer base, and other characteristics. Because they have to articulate their value to multiple audiences, most manufacturers have thought about it from different perspectives and received feedback from their audiences. Thus, they are more likely to be self-aware, having thought extensively about their place in healthcare.

Like all of us, manufacturers have “blind spots” in their vision. They tend to focus on value to the patients treated with their drugs, believing that this value justifies the high prices of their products. In doing so, they may ignore the marginal costs to society. As healthcare CEO Vivian Lee explains, “Companies that cover employee health insurance have seen rising costs erode their margins and hobble competitiveness. Much of that ever-rising expense has been passed on to employees, often in hidden ways like flat wages over the past 50 years…Healthcare is bankrupting the uninsured and…it’s often disappointing the millions who do have coverage.”10 Because of the high cost of healthcare, American workers lose jobs to automation or to countries where employees cost less, and the cost of health insurance is not borne by employers. Like other players in healthcare, manufacturers are not solely responsible for this, but they must acknowledge their role in escalating healthcare costs, a problem we must all work together to solve.



1. Lakdawalla DN, Joshi JA, Garrison LP, et al. Defining elements of value in health care-a health economics approach: an ISPOR Special Task Force Report 3. Value Health. 2018 Feb;21(2):131-139.

2. Cook NS, Cave J, Holtorf AP. Patient preference studies during early drug development: aligning stakeholders to ensure development plans meet patient needs. Front Med (Lausanne). 2019 Apr 24;6:82. doi:10.3389/fmed.2019.00082. eCollection 2019.

3. Moderna. Research Pipeline Products. Accessed July 1, 2022. https://www.modernatx.com/research/product-pipeline

4. Yu E. Value in Cancer Care: Accounting for What Really Matters. Accessed July 5, 2022. https://www.gene.com/stories/value-in-cancer-care-accounting-for-what-really-matters?topic=economic-sustainability-in-cancer-care

5. Novartis Pharmaceuticals. Strategic Priorities. Accessed July 2, 2022. https://www.novartis.com/about/strategy

6. Novartis Pharmaceuticals. Beacon of Hope: Addressing health disparities through holistic community-based collective action. Accessed July 2, 2022. https://www.novartis.com/news/beacon-hope-addressing-health-disparities-through-holistic-community-based-collective-action

7. Merck Pharmaceuticals. Merck joins Beacon of Hope to increase diversity in clinical trials. Accessed July 2, 2022. https://www.merck.com/stories/merck-joins-beacon-of-hope-to-increase-diversity-in-clinical-trials/

8. Novartis Pharmaceuticals. Novartis expands Beacon of Hope through alliances with historically Black medical schools to address systemic health disparities. Accessed July 2, 2022. https://www.prnewswire.com/news-releases/novartis-expands-beacon-of-hope-through-alliances-with-historically-black-medical-schools-to-address-systemic-health-disparities-301572503.html

9. Access to Medicine Foundation. Access to Medicine Index 2021. Accessed July 2, 2022. https://accesstomedicinefoundation.org/media/uploads/downloads/613f5fb390319_Access_to_Medicine_Index_2021.pdf

10. Lee VS. The Long Fix: Solving America’s Health Care Crisis with Strategies That Work for Everyone. New York, NY: WW Norton & Company; 2020.

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