The world is relying on the United States to get value-based drug pricing right

That is the title of my article with Melanie Whittington and Louis Garrison in STAT News. An excerpt is below:

The changing landscape of drug pricing policy in the U.S. has implications for the global pace and direction of innovation. Drug policy changes are being influenced by perceptions of the value of novel medicines relative to their budgetary impacts, with some believing that many medicines may not be worth their cost, creating an important role for health technology assessments (HTA). The goals of these assessments are to ensure that society does not overpay for new medications, but also does not inadvertently discourage the development of worthwhile medicines and other health technologies.

For years, the U.S. was apparently content to allow market-based pricing for patent-defined periods of time to drive investment on medicines and incentivize innovation, regardless of pricing in other countries. The U.S. incentivized global biomedical innovation with its willingness to pay more for medicines, while other countries assumed perhaps they could count on getting those medicines at a discount either before or after they went generic. U.S. payers — commercial insurers, employers, and government—have often paid for medicines that other countries said were not cost-effective.

With the U.S. becoming increasingly sensitive to the idea that it may be overpaying for medicines, and with value and cost-effectiveness influencing drug pricing policy, all Americans — and, in fact, people around the world — have a stake in making sure that the U.S. gets it right. What does getting it right mean? We assert that taking a societal perspective for quantifying costs and benefits would produce greater value for money while continuing to provide global incentives for innovation.

The article makes 3 key assertions:

Drug prices at launch should be linked to their health and economic valueGetting value-based drug pricing right is nice to have outside the U.S., but vital in the U.S.Quantifying treatment value from a societal perspective is needed

To better understand why we believe these assertions to be true, real the full article here.