Is the value of drug innovation poorly understood?

2 min read
First Published: 
Jun 2008

Key Learnings contained in this article:

Speaking at the March World Health Care Conference in Washington , DC , Joshua J Ofman, MD, vice president, global coverage and reimbursement for Amgen, said that the value of drug information is poorly understood.

Part of the reason for this, he said, is that we’ve traditionally viewed value as being difficult to capture because it isn’t viewed comprehensively. We need to measure inputs to the value equation, he said, noting that this has traditionally included the price of the product… and the value of the product being established before we fully understand its true performance. This means uncertainty about some key issues, among which, he said, is the need to assess value to society… not just to the payer but to employers, families, the patients themselves, and to quality of life issues, and productivity.

Dr. Ofman also believes that taking a societal perspective requires a better job of looking beyond patent life, and he cites Prozac as an example of the benefits society derives long after patent expiry. This means working through the methodological challenges, he says, and dealing with uncertainties at the time of product launch. It may mean adjusting price according to the value proposition. You can start to pave the way towards proving value by engaging in public debate at the national level, engaging with payers and engaging with thought leaders, while continuing to enhance the work and reputation of health economists.

Dr Ofman believes that all of this ties in to the pharmaceutical industry’s overall image. Sometimes a product’s claims may lead to questions of their credibility, and even to suggestions of inappropriate pricing. These issues, he says, also call for dialogue and transparency.

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David Woods
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