Nov 5, 2019

A drug pricing method that values the price of a life gets new attention

Caitlin Owens, author of Vitals

Illustration: Eniola Odetunde/Axios

A drug pricing model used by other countries but long opposed by drugmakers in the U.S. is getting new attention amid the political debate over drug prices, the Wall Street Journal reports.

How it works: The method, pushed by the Institute for Clinical and Economic Review, "puts a dollar figure on a year of healthy life, calculates how much health a drug restores to a sick patient, then prices drugs accordingly," per the Journal.

  • Case in point: Novartis set the price of Zolgensma, its recently-approved $2.1 million gene therapy, at the limit suggested by ICER.

Between the lines: Insurers are embracing the approach, and some drug companies are using it as a tool in their pricing process, leading to lower prices.

What they're saying: "This is a cultural issue," Steve Miller, chief clinical officer at Cigna, told the WSJ. "This is America not wanting to put a value on the price of a life."

Go deeper: Drug rebate dollars continue to rise

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