VALUE-BASED PRICING OF INNOVATIVE MEDICINES: APPROACHES AND CRITICISMS

Abstract

Value-based pricing links the price of a new medicine to the health benefit it delivers, usually measured through cost per quality-adjusted life year against a threshold. This narrative review, which reports no new data, summarises the economic logic of the approach, the ways health systems have applied it, and the main criticisms. Published work shows that thresholds are rarely derived from the opportunity cost of displaced care, that evidence at launch is often immature, and that affordability, equity and incentives for innovation sit uneasily inside a single price. Outcomes-based agreements and differential pricing offer partial remedies. The literature is dominated by high-income settings, and transparent methods linking price to measured value remain scarce.