Value-Based Pricing for Drugs With Uncertain Clinical Benefits

Area of Science:

• Health Economics
• Pharmaceutical Policy
• Decision Analysis

Background:

• Value-based pricing (VBP) for pharmaceuticals is complex due to uncertainty in drug benefits.
• The Accelerated Approval (AA) pathway increases the need to incorporate uncertainty into pricing.
• Decision-makers' risk aversion and evolving evidence further complicate VBP.

Purpose of the Study:

• To propose a methodology for estimating risk-adjusted value-based prices (rVBP) for drugs with uncertain benefits.
• To integrate value of information and expected utility theory for robust pricing strategies.
• To support policymakers in setting prices that balance market access with uncertainty.

Main Methods:

• Developed a two-assessment point approach: initial assessment and reassessment with new evidence.
• Integrated value of information and expected utility theory to estimate rVBP.
• Evaluated rVBP against benchmarks of no uncertainty and acceptable uncertainty levels.

Main Results:

• Risk-adjusted VBP (rVBP) may be lower than traditional VBP, particularly with high risk aversion.
• The proposed methodology adjusts VBP to account for the uncertainty in drug benefits.
• Demonstrated the approach using a hypothetical AA drug case study.

Conclusions:

• The rVBP methodology provides a framework for pricing pharmaceuticals with uncertain benefits.
• This approach aids decision-makers in managing risks associated with new drug approvals.
• Facilitates timely market access while acknowledging and quantifying benefit uncertainty.