Exploring Value-Based Drug Pricing Models

January 24, 2023

Value-based care, a kind of payment model that determines reimbursement based on patient care outcomes, has become more prevalent in recent years. Such a change has not been seen in prescription drug prices, despite the advent of multi-million dollar therapies that can radically change a patient’s course of care. In a new Med City News article, learn how value-based payment models for prescription medications may be a path towards more affordable drug prices.

According to Girisha Fernando, “Drug-pricing can learn from this model of being proactive and thinking ahead. For example, if insurers knew that a medication could reduce future care costs by a certain amount, they could use that figure to arrive at a fair purchase price. Basing prices on outcomes like this will become even more important as multi-million dollar gene therapies, which aim to cure patients or drastically reduce the effects of disease, become more common. It may very well be worthwhile to cover the growing number of potentially life-saving and life-changing drugs, including Bluebird Bio’s $2.8 million gene therapy for a blood disorder. But payers also need to know the drug actually works, and through value-based models can share some of that risk with pharmaceutical companies, with steps like paying in installments, or receiving reimbursement if the drug does not deliver its expected result.”

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