The dimensions for determining the value of medicines.

Value-based pricing aims to determine the prices of medicines according to the value or worth that patients and health systems attribute to the medicines. In theory, by linking price to value, pricing approaches are more likely to encourage companies to innovate and produce medicines with attributes that society and governments value most. In the context of medicines this would mean the public and government would be willing to pay for medicines that improve health conditions and minimize harms.

At a system level, implementing health technology assessment to determine value and price is complex. A well-developed system for such undertakings requires not only strong capability for performing appraisals and technical analyses, but also requires a highly supportive politico-legal environment to support the decision-making process, strong health information system, integrated service delivery, human and financial resources, and stakeholder engagements.

Many countries have adopted elements of value-based pricing to inform decision-making, but measuring the so-called "value" of a drug and translating it to a price has remained elusive. There are still considerable challenges in assessing, measuring and translating the value of a medicine to a price.

In particular, there is no universally accepted view on what dimensions of value should be considered for the purpose of determining prices.

(Diagram via @WHO)