Five major forces are dramatically altering the pharmaceutical industry’s revenue models and creating new notions of value. These forces are hastening the arrival of an outcomes-based world in which the value of a drug tracks more closely with its impact on patient health. Significant barriers remain, particularly between drug manufacturers and health insurers. This report explores possible paths for pharmaceutical companies to unlock value, improve clinical and economic evidence, and continue to build transparency with other health organizations.
In this new environment, health plans and health systems may demand that a drug first demonstrate significantly more clinical benefit than existing treatment options, sometimes over a long period. Additionally, insurers and hospitals alike want to see how a drug reduces the total cost of care, reduces unnecessary or ineffective treatments, or improves quality of life. New ways to quantify these changes will impact how drugs are researched, marketed, manufactured, and priced.