Comparative Effectiveness Public Policy

How do we measure the value of and pay for biomedical innovation?

Dana Goldman, Samuel Nussbaum, and Mark Linthicum have an interesting post on the Health Affairs blog about innovation, value measurement and pricing.  The article mentions the new Innovation and Value Initiative, where I serve as the Director of Research.  An excerpt is below.

New pricing mechanisms are needed to effectively link prices to value; we need innovation in pricing, not just treatment. Potential pricing mechanisms include outcomes-based contracts and indication-specific pricing, but other approaches are possible, such as selling licenses for pharmaceuticals like we do for software.

Our challenge is to design a system that: (1) measures value appropriately; (2) links reimbursement to that value; and, (3) does so in a way that stimulates innovation in high-need areas. European-style HTA is not really up to the task. Moving forward will be daunting and will require multiple viewpoints, which is why we are helping to lead the Innovation and Value Initiative to advance the field. The result, we hope, will be an approach to technology assessment that reflects multiple perspectives and defines a new role for the United States as an engine of value-based innovation.

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