This perspective was first shared in our Weekly View e-newsletter, which summarizes the week’s most significant drug pricing news. To subscribe, click here

“Drug pricing is complex and unclear. Patients rarely fully understand drug prices and can be left with frustratingly large bills. Drug pricing can potentially limit access to medicines, creating a major environmental, social, and governance risk for pharmaceutical companies and pharma stocks.

Within this ambiguous and complicated pricing background, along with the lack of regulatory oversight on U.S. drug pricing, an independent, private organization—the Institute for Clinical and Economic Review, or ICER—has gained prominence and authority by assessing the cost-effectiveness of drugs.”

While investors making bets on R&D need the potential of big financial returns, we believe that value-based drug pricing sends the right signal to the drug industry and venture capital firms about the kind of innovation we all want funded.