By NextBestFitValue-based prices that reward real innovation
Pay high prices only for drugs with large added benefit; pay little for me-too drugs.
Pays more for real breakthroughs, less for me-too drugs.
Review ledgerHow this path connects
Concrete changes if chosen
What would actually have to change in law, agencies, payment rules, or systems.
- Create a health-technology-assessment agency
- Tie negotiated prices to added-benefit ratings
Effects
Each effect has its own page: the evidence, the case that it is or isn't a real cost, and whom it affects.
- R&D is funded by high prices, which ties innovation to unaffordability
Paying more for large added benefits directs research toward bigger breakthroughs while spending less on me-too drugs.
- Brand-name drug prices far above production cost
Paying little for me-too drugs saves money while reserving high prices for drugs with large added benefits.
- Adds paperwork, coordination, or complexity
Basing drug prices on added benefit requires capacity to assess that benefit.
- Depends on uncertain evidence or judgments
Basing drug prices on added benefit leads to disputes over how value should be measured.
- Central coverage decisions can feel like rationing
Drug pricing depends on assessments of added benefit, with disputes over how that value should be measured.
3 paths soften this
Independent, transparent coverage body with appealsCentral coverage decisions can feel like rationingChosenCover everything clinically effective, without cost thresholdsCentral coverage decisions can feel like rationingRejectedClinician-led exceptions with fast reviewCentral coverage decisions can feel like rationingChosen
Who's affected
- People with ongoing or specialist care needs
- R&D is funded by high prices, which ties innovation to unaffordability: High prices make current treatment less affordable.
- People who will need care in the future
- R&D is funded by high prices, which ties innovation to unaffordability: Price cuts without replacement research funding can reduce the development of new drugs.
- Drug and device makers
- R&D is funded by high prices, which ties innovation to unaffordability: Paying more for large added benefits directs research toward bigger breakthroughs while spending less on me-too drugs.
- People with unaffordable deductibles or coinsurance
- Brand-name drug prices far above production cost: Market exclusivity sustains drug prices far above production cost.
- Uninsured people
- Brand-name drug prices far above production cost: Market exclusivity sustains drug prices far above production cost.
- Health insurers, brokers, and their shareholders
- Brand-name drug prices far above production cost: Market exclusivity sustains drug prices far above production cost.
- Taxpayers and public budgets
- Brand-name drug prices far above production cost: Market exclusivity sustains drug prices far above production cost.
- Central coverage decisions can feel like rationing: Declining low-value care holds down public spending.
- Drug and device makers
- R&D is funded by high prices, which ties innovation to unaffordability: High prices fund research and support expected investor returns.
- Brand-name drug prices far above production cost: Market exclusivity supports high prices and shareholder returns.
- Central coverage decisions can feel like rationing: A declined product loses the whole national market.
- Pharmacy benefit managers and their pharmacies
- Brand-name drug prices far above production cost: High list prices generate rebates for benefit managers.
- People with ongoing or specialist care needs
- Central coverage decisions can feel like rationing: People needing a declined or delayed treatment have no other insurer to turn to.
Where it has been tried
- Germany (AMNOG), France: Prices tied to added-benefit rating.
- Germany: A 2024 IQWiG analysis found that prices fell in 18 of 23 orphan-drug cases after full added-benefit assessment and subsequent price negotiations.