The Path Forward

Factors interfering with market-based alignment of drug prices and value make explicit value assessment necessary. The widely used quality-adjusted life year serves as a starting point because it accounts for both quality and length of life. Cost estimates could improve by accounting for drug price changes accompanying the loss of market exclusivity. Consistent use of a societal perspective when relevant would also improve value assessments. Prices should sometimes reflect government contributions to development, although such adjustments make the most sense when government facilitates late-stage research. The Institute for Clinical and Economic Review, a private group with a leading role in US value assessment, should make its analyses transparent and defer to payers regarding judgements about value. Finally, payers should embrace value-based pricing. They may not always get the lowest prices, but aligning price and value will mean society expends its resources efficiently and improves the population’s overall health.