ICER’s Steven Pearson collaborated with Len Nichols and Amitabh Chandra to develop a recent Health Affairs publication, titled Policy Strategies For Aligning Price And Value For Brand-Name Pharmaceuticals.

In the paper, the authors explore the numerous ways in which institutional and regulatory factors contribute to price inflation for name brand drugs in the United States, and identify solutions to bring the pricing of drugs into closer alignment with their clinical value. The authors acknowledge competitive market forces as one factor that may be used to mitigate manufacturers’ pricing power, but highlight the use of clinical effectiveness information in pricing and coverage negotiations as a critical step in ensuring that drugs are consistently priced based on the benefit they provide. The paper reviews various models of value-based pricing, ultimately concluding that effort must be invested at a federal level to address current affordability issues while supporting a sustainable model of innovation for the future.