Value-based pharmaceutical pricing, aimed at achieving better value for pharmaceutical spending and lowering drug prices, while maintaining innovation, is a concept that is gaining traction. In the U.S., prescription drug prices are set by pharmaceutical companies to maximize profits, not based on how well a drug works. In contrast, according to its proponents, value-based drug pricing would mean real health outcomes (not just profits) determine the cost of a drug.
President-Elect Trump’s push for healthcare reform that focuses on free market, consumer-driven initiatives will enhance the political viability of value-based drug pricing. It has more support by the pharmaceutical industry than other popular policies to bring down drug prices, as it’s viewed as more in line with free market principles than other policy proposals, such as allowing Medicare to negotiate drug prices.