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Reframing the Conversation on Drug Pricing

Article · November 20, 2017

Editor’s note: An earlier version of this paper was co-authored by Dr. Rosenblatt and Mr. Termeer before Mr. Termeer passed away in May 2017. In revising and updating the original paper, the editors and Dr. Rosenblatt have been careful to respect Mr. Termeer’s contribution and preserve his point of view, although we have taken the liberty of incorporating recent developments relevant to this topic that we thought were important to discuss. The point of view of both authors is informed by their experience in the biopharmaceutical industry.


Our society today faces a tsunami of health care costs from Alzheimer’s disease. One in nine Baby Boomers will develop Alzheimer’s disease. The U.S. will spend $259 billion in 2017 on Alzheimer’s costs, and that figure will balloon to $1 trillion by 2050 if current trends continue.

Our society can’t afford for current trends to continue. There is only one solution, and it isn’t building more efficient hospitals, health care delivery systems, and nursing homes. It is discovering new drugs that arrest, delay, prevent, or cure the disease.

So far, these attempts have largely failed. More than 400 clinical trials of more than 200 agents yielded only one approved drug for Alzheimer’s disease in the period 2002–2012. The failure rate at the clinical trial stage has been a staggering 99%, and that number doesn’t include agents that didn’t make it out of the lab. There are only five approved drugs; they treat some symptoms of the disease and slow its progression somewhat, but none has major impact on the disease. Recently, two promising Alzheimer’s drugs from two research-driven pharmaceutical companies (Eli Lilly and Merck) experienced setbacks in major clinical trials, after 10 to 20 years of research involving hundreds of scientists (some of whom devoted decades of their careers to the effort) and thousands of patients.

Abandoning the search is not an option unless the patients who suffer from this dreaded disease are also abandoned. Each failure advances our knowledge and increases our chances for eventual success. But it will be a costly search. The U.S. government spends between $500 million and $1 billion a year on all Alzheimer’s-related research. Industry’s investment dwarfs that amount: the industry group PhRMA lists more than 80 Alzheimer’s medications currently in development. In general, the average cost to develop a drug tops $2.5 billion, according to a Tufts University study published last year.

These figures are for just one disease: multiply them by the number of conditions where care could be transformed by one or two pharmaceutical breakthroughs, and the magnitude is stunning.

For companies to justify risking billions on finding a breakthrough drug, they need to be able to anticipate a corresponding return on their investment. But at the same time, the patients who can benefit from a drug need to have access to it without facing bankruptcy, and health insurers need to feel confident that they will reap a return on their investment.

We believe there are ways to balance these competing interests so that everyone — patients, providers, insurers, pharmaceutical companies, and the country as a whole — benefits from the remarkable advances being made in drug invention. But all parties need to change the way they think and talk about this vital topic.

Expanding the Conversation Around Drug Pricing

Most of the current discussion on drug pricing focuses selectively on the list price of a drug on the day of introduction and narrowly revolves around immediate cost to the system. In order to make informed analysis and recommendations, the boundaries of the pricing discussion must be expanded to include:

  • Short-term versus long-term cost
  • The relationship between the cost and value
  • The factors that determine price
  • The role of generics
  • Global cost versus U.S.-only cost

Medicines should be viewed not in isolation but as part of an interlocking system with the patient at its center. We believe the drug pricing discussion urgently needs to address these specific issues, among others:

  • Patients, both with and without insurance, are carrying a disproportionate share of the increasing cost. Any recommendations directed at lowering the cost of medicines should translate into a reduction in out-of-pocket expense for patients. Squeezing the balloon by saving money on drug expenses and then distributing the dollars saved to other components of the health care system will be a futile exercise unless it provides direct relief to patients.
  • Prices for drugs must recover research and development (R&D) costs and encourage investment in innovation. Arbitrary downward pressure on prices may create an unsustainable business model for pharmaceutical companies.
  • The majority of people in the world, including many Americans, lack access to medicines. A principle of differential and fair-share pricing around the globe must be developed to balance access with the financial sustainability of drug development efforts.

Short-Term versus Long-Term Cost

Atorvastatin (Lipitor), a leading statin for treating elevated cholesterol, was introduced in 1996 at over $5 per tablet. When it became generic in 2012, the price fell by 95% to $0.3 per tablet. Alendronate (Fosamax) for osteoporosis was $2.60 daily, but is now $0.28. These low prices will likely persist in perpetuity, and 90% of prescriptions written in the U.S. are for generics that have had similar precipitous price drops. So what is the true cost of these medicines to society — the price on day one or the average price over decades?

Today’s generic was yesterday’s innovative medicine. No other health care expense drops so dramatically, so routinely. (Most only increase.) Society’s purchases of a drug in its early years, when it is under patent protection and the price is highest, are a kind of annuity for the health system, underwriting a steady pipeline of new drugs that will continue to provide benefits long after they go off patent.

Even before patent expiration, the prices of many drugs drop substantially along the way as competition enters the market. Even breakthrough drugs can rapidly be made obsolete by competition. The breakthrough hepatitis C therapy, telaprevir (Incevik), introduced 6 years ago, was withdrawn from the market by Vertex only 3 years after approval because a better new drug, sofosbuvir (Sovaldi), became available. The same happened to Merck’s boceprevir (Victrelis).

The initial price for Sovaldi, the first real cure for hepatitis C, sparked outrage: $1,000 per tablet or $80,000 for a course of treatment. But within 18 months, competition entered the field and the list price of sofosbuvir fell by 40–60%. Initially, there also was anger that the drug was considerably more expensive in the U.S. than in the U.K. and other parts of Europe. Now, 2 to 3 years after market entry and well before the patent will expire, sofosbuvir is less expensive in the U.S. than in the U.K., because competitive drugs have already lowered the U.S. price while they are still making their way through the U.K.’s regulatory and reimbursement review processes.

These price drops due to competition are a major reason why the Congressional Budget Office projects that Medicare Part D spending will be lower than originally expected over the next decade. It found that spending in 2013 was nearly 50% less than expected ($50 billion compared to the projected $99 billion).

Health systems and insurers can’t usually predict when a breakthrough therapy will come along to strain their budgets, even as it promises unprecedented benefits for patients. There is no perfect solution: the economic reality is that not every drug can be equally available to every patient on day one. (The same is true for breakthrough surgical procedures or medical devices.) Nor should each breakthrough be made available to all on day one. Rather, it may be possible to create tiered or staged access. Take the example of the drugs for hepatitis C. Many patients with subclinical or mild disease can safely wait for a period until receiving the new drug. In fact, many physicians “warehoused” such patients in anticipation of the availability of a new, better medication. Staging access over time, when medically appropriate, can enable the health care system to absorb the cost of a breakthrough therapy.

The Value Question

Focusing on drug price alone ignores savings that effective drugs generate in other parts of the health system. In many cases, the cost to society of not having a treatment (that is, the direct and indirect costs of the disease) is much greater than the initial cost of a drug, even if that cost is five or six figures. The Congressional Budget Office calculates that a 1% increase in spending on prescriptions by Medicare beneficiaries yields a 0.2% decrease in expense across all of Medicare’s medical spending, translating to roughly a twofold return for every dollar spent on drugs. Statins are a good example: they have enabled a dramatic improvement in public health by preventing heart attacks, strokes, and cardiovascular deaths. They were a relative bargain even when first introduced, and are an extraordinary one now that generics cost only pennies a day.

However, our health care system doesn’t pay for drugs in a way that highlights and captures that value. Drug expense is often front-loaded, whether to the insurer or the patient, but the benefits may accrue over years or even decades. Introduction of bisphosphonate drugs was associated with a 40% decline in osteoporotic fractures, decreasing suffering and saving thousands of lives while creating large savings for the health system. People tend to forget those lessons when looking at the steep price tag for a new breakthrough drug.

Some drugs represent true cures. The $80,000 introductory price tag on Sovaldi, the breakthrough hepatitis C cure mentioned above, sparked an initial wave of criticism, but health economists and insurers came to consensus that the drug was worth every penny based on the projected savings from avoidance of cirrhosis, liver failure, and liver transplants. (And, of course, it’s even more valuable now that competition has dropped the price.)

The U.S. insurance system makes it particularly difficult to take the long view. Patients frequently switch health insurers and plans when they change jobs, when their employers change insurance offerings, or when they have to buy their own coverage. At one large employer, a third of the employees switched plans in a single year. Because the benefits of medicines — such as decreases in heart attacks, fractures, or liver failure — accrue over years, a health plan that spends on medicines risks losing its return on investment to another insurer. The national health systems in Europe and Japan can reap those long-term benefits. In the U.S., the only insurers in the same position are Medicare and the Veterans Health Administration.

A Case Study in Cost versus Value

The first CAR-T therapy, Novartis’s Kymriah, is a harbinger of the complexity that personalized medicine will cause in drug pricing and the calculation of value. CAR-T (chimeric antigen receptor T cell) therapy harnesses an individual’s own immune system to treat cancer. T cells are separated from the patient’s blood and then genetically engineered to display on their surface a molecule that targets the T cells to attack specifically the patient’s cancer. The drug is not a single molecule but an entire cell — a living drug that is unique to each patient.

Kymriah is approved to treat children and young adults with a rare blood cancer, acute lymphoblastic leukemia (ALL), who have failed conventional therapy (which is effective in 70­–80% of patients). Relapsed ALL is the leading cause of childhood death from cancer and kills 600 children and teenagers a year in the U.S. In clinical trials, CAR-T therapy enabled 83% of relapsed patients to achieve remission. It is clearly a transformative medicine.

Is it worth the initial price of $475,000? That sounds shockingly high, but the therapy saves the lives of young people who might then live for decades. The U.K.’s National Institute for Health and Care Excellence, which assesses the price and value of treatments for the National Health Service, says the therapy would be cost-effective even at $649,000.

The process by which Novartis arrived at the initial price is not entirely clear, but the company invested heavily to develop the basic concept into a marketable product, building on research done at the University of Pennsylvania. Novartis began investing long before there was any assurance of success. Also, the therapy needs specialized equipment and facilities to process the patient’s T cells, and building out such infrastructure represents a substantial initial investment.

CAR-T represents an entirely new approach. But it is too soon to know its ultimate impact. Our system as a whole can “afford” it so far because only a few patients will be treated at any one time. Novartis itself is shouldering some of the burden: the company offers to refund the purchase price for patients who do not respond within a month, and has pledged to offer patient assistance programs so that no patient is denied CAR-T therapy because they cannot afford it.

If the approach proves comparably effective for diseases afflicting many more patients, which many experts predict, the economics of such a technically intense and expensive therapy will come into sharp focus. However, by then it is possible that prices will have fallen substantially, particularly if competitors enter the market or additional therapies can use the facilities and equipment put in place for Kymriah. Furthermore, it is very unlikely that new therapies for all of the diseases the technology can address will appear in one large wave, straining the cost to health systems. Rather, the rollout likely will occur over years or perhaps decades.

Components of the Price Chain

The relationship between the cost of a drug and its value is further obscured by the mythical nature of its list price, which can stoke public outrage even though almost no one will ever pay it. However, the discounts commonly given by biopharmaceutical companies usually benefit other parts of the health care system before they get to either patients or payers.

The real cost is derived from a process so Byzantine that it is nearly impossible to comprehend by nonexperts, but here is a simplified version:

  1. The biopharmaceutical company fixes a list price.
  2. The biopharmaceutical company negotiates with large-scale purchasers, typically pharmacy benefit management companies (PBMs), who obtain substantial discounts of 25–60% off the list price.
  3. The PBMs make decisions about which drugs they will cover, where they will be sold, and for how much, and they negotiate deals with both insurers and pharmacies.
  4. The PBMs keep 30–70% of the discount they have negotiated with drug makers, resulting in insurers (and patients, through co-pays and deductibles) receiving a much smaller discount off the list price.

For a fuller explanation of this confusing process, we recommend a recent excellent breakdown from Business Insider. The big three PBMs (ExpressScripts, OptumRX — part of UnitedHealth — and CVS) control more than 80% of prescriptions in the United States. Looking at the final price of a drug at the point of patient purchase, manufacturers, who may have invested billions, end up with a share comparable to that of intermediaries like PBMs, whose R&D investment and risk are almost nil. Furthermore, because PBMs’ revenues are based on a percentage of the cost of the drug, they make more money as list prices of drugs rise, creating an incentive for PBMs to encourage high list prices. For example, when Mylan made a sudden extremely large increase in the price of EpiPen, drawing sharp criticism from almost all quarters, ExpressScripts received $300 of the $600 price tag for each EpiPen.

If our health care system moved toward true value-based payment, it could not justify having PBMs continue to receive the amount they now do, which is comparable in many cases to the amount the biopharmaceutical company receives after its expensive, risky, and long-term investment in R&D. Rather, PBMs might function as, and be paid more like, FedEx or UPS: a flat rate for shipping and handling that is not based on the value of the package. It’s true that PBMs extract large discounts from biopharmaceutical companies, but most of these savings are not passed on to patients. In Europe, in a very different payment system, national health systems obtain large pharmaceutical discounts, and there are no PBMs. If the goal is to preserve PBMs rather than having payers negotiate drug discounts, price transparency should be mandated at key levels of the transaction, so that it’s clear where those discounts are going.

Other examples of perverse incentives in pricing include cancer drugs provided to patients by academic medical centers, which sometimes mark up the list price 6 to 10 times. Also, many cancer centers, hospitals, and other clinics have experienced financial windfalls through the government’s 340B program — in fact, many are now financially reliant on 340B revenues. The program was established to provide safety-net financial assistance to low-income and other vulnerable populations seeking health care. The program mandates that pharmaceutical companies participating in Medicaid programs provide outpatient drugs to qualified providers and pharmacies at substantially reduced prices (20–50% below list price). But hospitals and other participating entities are not required to pass the savings along to patients or insurers (among many other flaws in the design of the program). Over time, the 340B program has morphed from its original focus into a large source of revenue for many hospitals and pharmacies without providing discounts to patients, payers, or Medicaid. It also gives pharmaceutical companies an incentive to increase the list price to compensate for the 340B discount, driving up prices for everyone.

Generics — Their Societal Value and Special Issues

Efforts by the U.S. government to foster the generic pharmaceutical industry have been extraordinarily successful in bringing high-quality medicines to the American public at low cost. Branded drugs transition to generics very efficiently, often the day after patent expiration. These efforts continue: Scott Gottlieb, MD, the new FDA Commissioner, recently announced that the FDA will undertake efforts to reduce the backlog of generic drug applications to speed these less expensive drugs to market and enhance competition.

The FDA regulates the generics industry, and the quality of generic drugs entering the U.S., with few exceptions, has been high. Generics stimulate innovation: because research-driven drug companies know years in advance when their patents will expire, they strive to replace those losses with new patent-protected drugs. Generally, they leave the generic market to manufacturers who specialize in that area.

Generics companies are manufacturers. They do not conduct R&D. In addition, they receive special legal protection. For instance, under most circumstances patients can’t sue the generic company. Even if the patient has never taken a single dose of the branded version of the drug, the law requires that the suit be brought against the branded pharmaceutical company and not the generic manufacturer.

In exchange for the privileges described above, there has been until recently an unwritten social compact with the generic industry: they are expected to keep the prices of generic drugs low. It may be time to write it down, however: notorious recent examples of profiteering in the generic sector have tarnished the reputation of the entire biopharmaceutical enterprise.

How is this type of bad behavior possible? A drug goes off patent, then multiple generic producers rapidly create a competitive market. But generic manufacturers are not committed to any specific product, and no regulatory requirements oblige them to coordinate the termination of production and withdrawal from the market. They are free to pursue their most profitable opportunities. When only a single manufacturer remains for a generic drug, no regulation stops it from setting any price it can get away with. An old drug that has been low cost for many years may suddenly become high cost, leaving patients and insurers with no alternative. That’s how Mylan’s EpiPen, a uniquely life-saving product for people with deadly allergies, jumped from $57 to $600. One means of preventing such situations would be a requirement by the FDA for generic manufacturers to give advance notice (perhaps 12 or 18 months) before being permitted to withdraw a drug from the market. This requirement would alert other generics manufacturers to a possible market opportunity, reducing the opportunity for a single manufacturer to hold a group of patients hostage.

Patients and Prices

As health insurance policies cover less and less, out-of-pocket expenses for medicines grow. In the U.S., “health insurance” is increasingly a misnomer. Most people don’t really have insurance — they have cost-sharing plans, and their “insurers” minimize rate hikes in premiums by increasing co-pays and deductibles. Patients who were at one time largely shielded from actual drug costs now experience real financial hardship, even when they are supposedly insured. And those without insurance are forced to pay list prices, if they can.

Furthermore, the U.S. insurance premium/deductible/co-pay model is inherently regressive. A $4,000 deductible is much more of a financial hardship for someone earning $50,000 than it is for someone earning $150,000.

Moreover, the current system of insurance guarantees that even a very large cut in the list price of an expensive drug will not have much impact on patients’ financial security. Imagine a head of a household who earns $50,000 per year. She earns approximately $40,000 after taxes. From this income, the family spends $8,000 per year on health insurance premiums. One family member has a serious illness and is prescribed a novel expensive drug that costs $50,000 per year. The insurance plan has a $4,000 deductible and a 20% co-pay. So this family pays $8,000+$4,000+$9,200=$21,200. Clearly, they are bankrupted despite having insurance. Now imagine that the price of the drug is cut in half, to $25,000. This family now spends $8,000+$4,000+$4,200=$16,200. While their costs are reduced by $5,000, they remain in dire financial straits despite having insurance coverage. Contrast this with a citizen of a typical European country where the total cost out of pocket for the patient is zero. Without fixing the insurance coverage problem, it will be difficult to provide meaningful financial relief to patients simply by reducing the price of drugs.

As a society, we have been lulled into accepting our complicated, often dysfunctional insurance model. For example, is there a medical rationale for the Medicare coverage gap known as the “donut hole”? It is hard to understand why a patient is covered for the initial drug expense of a disease, then loses coverage as she or he incurs more expense, and then regains drug coverage after incurring even more expense. Such coverage bears no relation to the illness and does nothing to promote the most cost-effective care.

And when it comes to prescription drugs and medical care in general, we should remember that patients are patients, not consumers, despite the brief vogue of “consumer-driven health care” that was supposed to drive down costs by having patients shop for care the way they shop for a car or a TV. Consumers have discretion. In a market, they can choose to buy one product or another, or forgo making a purchase. Patients are not so fortunate. Their medical condition almost always requires that they purchase or co-pay for a medicine. And the doctor, not the patient, chooses the medicine.

Currently, out-of-pocket cost is a major factor in nonadherence to prescriptions. Nonadherence has been documented to result in poorer health outcomes.

Our society must improve insurance coverage in ways that prioritize putting firm, reasonable limits on how much patients are expected to pay out of pocket for drugs. Adherence will go up, health will improve, and the pharmaceutical industry will have greater incentives to discover drugs for unmet medical needs.

The Puzzling Problem of Global Pricing

Drug prices in the U.S. tend to be the highest in the world for innovative drugs but among the lowest for generics. Although highly regulated by the FDA, the U.S. market is freer than most in terms of competition. Countries with a national health system purchase medicines for their entire population; they both regulate approvals and set prices. One might expect variations in prices among countries to correspond at least somewhat with their standard of living and ability to pay, but this is not the case: some of the wealthiest nations in the world, particularly in Europe, legislate drug prices that are considerably lower than would be expected based on their position in the world’s economic hierarchy. Some nations mandate progressive price reductions, regardless of the value that the drug provides. For example, Japan’s national health system, after approval of a new drug, then enforces a schedule of decreasing reimbursement for years into the future.

It’s a chronic source of irritation for many in the U.S. that other countries get a relatively free ride, while the U.S. shoulders much of the cost of innovation. It’s true that we get earlier access to innovation and have more higher-paying jobs for highly trained individuals in the biopharmaceutical industry, but most people do not see these benefits as a sufficient offset.

We believe that if mechanisms were put in place to level the playing field, pricing would be more equitable across regions of the globe, especially in Canada and Europe. Furthermore, if all the countries of the world paid their fair share for medicines, it would help subsidize the cost of medicines for poorer nations. Currently, this is just a dream, as countries act primarily in their own self-interest rather than under ethical or moral imperatives, and there is no motivation for them to cooperate in subsidizing drug access for developing nations.

Drug companies themselves often take responsibility for that subsidy by donating medicines to the lowest-income regions. Companies don’t need to make profit everywhere, but the business model needs to be sustainable for innovation to continue. For an example, we again turn to the hepatitis C cure, sofosbuvir (Sovaldi). The price initially was $1,000 per tablet in the U.S. — 100 times higher than the $10 per tablet price voluntarily offered by the manufacturer at the same time in Egypt. Similar arrangements have provided access to AIDS medications in poorer countries.

Such donations can be as much enlightened self-interest as charity. In 1987, hepatitis B was endemic in China, infecting up to 60% of the population and causing 500,000 deaths per year. It was second only to tobacco as a public health problem. The new hepatitis B vaccine was unaffordable for China due to the scale of the problem and the nation’s economic situation. Merck donated technology and a facility to produce the vaccine. The impact was a 90% reduction in hepatitis B infections in children and an estimated 3 million lives saved. Now China’s economy has emerged. It no longer needs donations, and the pharmaceutical industry operates profitably there while providing “subsidies” to other parts of the world.

But access remains a huge issue: so-called global pharmaceutical companies reach only 20% of the world’s population. Certainly, the entire financial burden of access should not fall exclusively on industry. The failure of some nations to carry their fair share not only impedes innovation, but it also may indirectly deprive poorer nations. Some version of richer nations subsidizing the developing world is needed to bring the advances of modern medicine to those in need.

Looking Ahead to Solutions and Challenges

The U.S. pharmaceutical industry is an extraordinary innovation engine — the envy of the world. We believe it must be preserved, nurtured, and respected; it is simply too important to our nation’s well-being and future to jeopardize or lose. Our society’s essentially market-driven system does what it is supposed to, most of the time. Inappropriate behavior like that displayed by Mylan in raising the price of EpiPen is exposed rapidly, and the consequences are severe. (Mylan has faced public fury, a hit to its stock price, Congressional hearings, and a racketeering lawsuit, despite its attempts to quiet the outcry by releasing a “generic” EpiPen at half the price of the branded version.) Hopefully, this example will deter other companies considering similar approaches.

When the system does not self-correct, measures — either regulatory or legislative — should be taken to stop abuse.

Increased transparency also is needed in drug pricing, but not just for the prices set by manufacturers. Transparency will be effective only if it is applied evenly across all the components along the price chain. The issue of perverse incentives for supply chain intermediaries (such as PBMs) to keep an excessive share of negotiated discounts needs to be addressed, and then the savings need to be passed on to patients. Transparency would help bring the margins of PBMs and 340B hospital and clinic plans toward a range that is more commensurate with the value they deliver. And transparency likely will reduce bad behavior and abuse in the market.

We believe that Medicare should have the right to negotiate purchase prices of medicines. In reality, prices are already negotiated for a large portion of Medicare Part D through the private insurance companies that provide coverage under Part D to patients. This recommended change alone would create a great change in the dynamics of the market. When combined with transparency, these actions would go a long way toward reducing drug costs.

Even a perfect solution to today’s drug pricing issues is unlikely to address some of the major challenges on the near horizon. Every component of the U.S. health care system is more expensive — often by a factor of three to five — than health care systems elsewhere in the developed world. Thus, even dramatic reductions in the cost of medicines will not alone fix the high cost of health care in the United States. A magic wand that made all prescription drugs free of charge would still leave the United States with the most expensive health care system in the world by a wide margin.

And the coming era of precision medicine means that, rather than lumping all sufferers of a disease together, clinicians will divide them into smaller and smaller subpopulations based on genetic variations that determine how well they respond to a drug or what side effects they might experience. Each subgroup may be treated with a different drug or combination of drugs. This approach will be good medicine: these precision drugs will be good for patients and have higher value. But the cost of developing a drug for 10,000 people is not much different than for 10 million.

Without changes in drug development, regulation, and/or the business model, it will be difficult to price in ways that recover the investment for so many specialized therapies.

Periodic public outrage, whether over a six-figure drug or an opportunistic generic price increase, pushes lawmakers and regulators to address drug pricing. Some mechanisms to address drug pricing that are now under consideration, such as price controls, will simply shift monies from one pocket to another (such as insurers and PBMs), but not necessarily to patients, who will still have to contend with deductibles and co-pays.

We believe patients must be front and center in every discussion. They are often silent partners without representation in drug pricing discussions or negotiations. They are the most vulnerable financially, especially given the insurance industry’s structure and its ability to obligate them to pay despite having no voice. Patients experience burden enough due to illness, and should be spared the additional burden of financial hardship. Protection from excessive drug costs is only one reason, among many, that the U.S. needs an insurance system, as in every other developed country, that works for all patients.

Our nation must find a way to contain its health care costs, but it must not be at the expense of solutions that spur pharmaceutical innovation. As we have seen so often before — with hepatitis, heart disease, osteoporosis, and vaccines against infectious disease — those innovations themselves can help contain health care costs. And they do it by making all of us healthier — which, after all, should be our ultimate goal.


Dr. Rosenblatt served as Chief Medical Officer at Merck & Co. from 2009 to 2016, and Mr. Termeer built the pioneering biotechnology company Genzyme from a tiny start-up in the early 1980s to a company worth more than $20 billion when it was acquired by Sanofi in 2011. Dr. Rosenblatt’s views also have been informed by a long career in academic medicine, holding leadership positions at Tufts University School of Medicine, Harvard Medical School, and Beth Israel Deaconess Medical Center.

This article originally appeared in NEJM Catalyst on October 19, 2017.

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