Academic Literature

Pharmaceutical Products and Their Value

Steep increases in prices and spending on prescription drugs in the United States have triggered public outrage and questions about their value.
Originally published on 03/29/2020 in Value in Health

Value-based pricing has emerged as a preferred alternative to prices determined by what the market will bear.

In response, manufacturers and health plans have begun to publicize their efforts to engage in outcomes-based contracts and long-term financing agreements, which they describe as “value-based”. Both contracting approaches perpetuate existing distortions in the financial incentives of supply chain and prescribing intermediaries, and fail to realign the prices of drugs to their value to patients, the healthcare system, or society. In this paper published in Value in Health, Anna Kaltenboeck describes the challenges of truly managing drugs according to their value and identifies several alternatives that promise greater impact than contracting strategies.

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