Beyond Drug Prices: What Does It Take to Foster Pharmaceutical Innovation?
The ISPOR Monthly Policy Brief provides concise insights into emerging developments shaping the global health policy landscape. Each edition highlights timely issues relevant to the health economics and outcomes research (HEOR) community and beyond, examining how evolving policy decisions influence healthcare systems, evidence generation, innovation, and patient access. View all Policy Briefs here.
Ana Amaris, MD, MPH, Director, Health Policy Initiatives, ISPOR, Lawrenceville, NJ, USA
Overview: The September edition of the ISPOR Policy Brief explored how the expanding objectives of pharmaceutical policy raise important questions about how value and policy success should be defined and measured. Among these objectives, fostering pharmaceutical innovation remains a central policy priority, particularly as governments seek to balance incentives for research and development (R&D) with affordability, access, and health system sustainability. While drug pricing often dominates discussions about innovation, the conditions that influence R&D investment extend well beyond pricing alone.
Recent policy developments in the United States, Europe, and China illustrate how governments are addressing different elements of the pharmaceutical innovation ecosystem, raising a broader question: How are governments rethinking the policy conditions needed to support pharmaceutical innovation?
A Broader Innovation Agenda
Recent discussions at ISPOR’s Healthcare Investment Summit reinforced the importance of looking beyond drug prices when considering the conditions that influence pharmaceutical innovation. Participants highlighted how regulatory uncertainty, evidence requirements, market uptake expectations, and investment conditions can shape decisions about which technologies move forward.
These considerations are increasingly reflected in policy initiatives across major pharmaceutical markets, with governments taking steps to strengthen clinical research, streamline regulatory processes, and incentivize pharmaceutical development and investment. The policy debate is expanding beyond how innovation is rewarded to include the conditions under which it is developed.
Different Approaches to Strengthening the Innovation Environment
Governments are pursuing different strategies to strengthen their pharmaceutical innovation ecosystems, with recent initiatives placing particular emphasis on regulatory efficiency, research capacity, investment, and competitiveness.
In the United States, the Food and Drug Administration (FDA) launched its Expedited Investigational New Drug (IND) Pilot Program in September 2026, seeking to accelerate the transition from early drug development to first-in-human clinical trials. The initiative introduces closer collaboration between sponsors and research institutions, earlier regulatory engagement, and rolling review of application components. By addressing potential delays during early clinical development, the FDA is seeking to make the development process more efficient while maintaining regulatory oversight.
In the European Union, the proposed European Biotech Act seeks to strengthen the region’s biotechnology sector and its position in global pharmaceutical research and development. The 2025 proposal addresses challenges related to clinical trial processes, access to financing, research and manufacturing infrastructure, and regulatory complexity. These priorities reflect growing concerns about Europe’s ability to attract investment and clinical research activity amid increasing international competition.
In China, authorities announced new measures in September 2026 aimed at accelerating pharmaceutical innovation and strengthening domestic industry. These include enhanced regulatory consultation during development, protections for clinical trial data, market exclusivity provisions for certain pediatric and rare-disease medicines, and support for advanced manufacturing and investment. China’s strategy places pharmaceutical innovation within a broader industrial and economic development agenda, connecting regulatory policy with research capacity and domestic competitiveness.
Although these initiatives reflect different national priorities, they raise a common policy consideration: how governments can create conditions that attract investment and strengthen research capacity while encouraging the development of medicines that respond to health needs.
The Policy Challenge: Balancing Innovation and Other Priorities
Policies that improve regulatory efficiency, expand research capacity, or strengthen commercial incentives may encourage innovation, but their effects will depend on how they interact with other policies and broader economic conditions. A favorable investment environment does not necessarily ensure that research will address the greatest unmet medical needs. Similarly, faster development processes must preserve the scientific rigor and patient protections necessary for generating trustworthy evidence.
Supporting innovation also involves important trade-offs related to affordability and access. Intellectual property protections and market exclusivity can strengthen incentives for investment while influencing competition and medicine prices. Public investment can expand the scientific foundation for innovation, but governments must still consider how the benefits of that investment translate into improvements in health.
As governments pursue different approaches to supporting pharmaceutical innovation, it is important to determine whether these policies achieve their intended objectives and how they affect the broader innovation environment.
Looking Ahead
The emerging policy landscape suggests that supporting pharmaceutical innovation requires more than adjusting prices or introducing individual incentives. It calls for attention to the relationships among research investment, regulatory predictability, scientific capacity, clinical development, and market conditions.
For policy makers, the challenge is to create an environment that supports pharmaceutical innovation while balancing affordability, access, and health system sustainability.