Value-Based Healthcare

Value-Based Healthcare

The Implications for Pharma Strategy

EIU, 2014




  • Innovative
  • Eye Opening
  • Overview


The system of how medical care providers get reimbursed has undergone – and is continuing to undergo – tremendous change. Under the umbrella of “value-based health care” (VBH), the quality of patients’ case results determines the payments to medical providers and health care suppliers – rather than the quantity of tests, procedures or medications a patient receives. Experts at the Economist Intelligence Unit succinctly describe how these changes will affect the big pharmaceutical companies that create and market medications to millions of people. Their report offers compelling examples of how these firms can cope with and benefit from VBH. getAbstract recommends this illuminating report on the shake-up in health care to pharma professionals, health care providers and suppliers, as well as entrepreneurs and investors in the medical arena.


The New World

Changes in the health care industry radically affect “health care funding” – the basis on which reimbursers pay medical and drug costs. Under “value-based health care” (VBH), “patient outcomes” are the standard for payment. Industry experts see value-based health care as a positive trend, but pharmaceutical firms view VBH as a threat.

Developing, producing, gaining approval for and marketing drugs is expensive; with VBH, pharma firms now must devote additional funds to demonstrating the worth of their medications to “health technology assessment (HTA) agencies, insurers and payers.” Drug firms also have to cope with the escalating need for cost-efficient care, increasingly complex value metrics, reduced prices and lower repayments. Along with the influx of generic drugs and “high-value” medications that fight certain conditions, “the middle of the pharmaceuticals market” is feeling the pressure. Several strategies can help drug manufacturers cope:

  • Change research and development (R&D) processes to ensure they’re focused on creating economic, social or innovative value.
  • Make gathering information during drug trials as well as after...

About the Author

The Economist Intelligence Unit Healthcare provides information to aid health care providers, suppliers, payers and others in developing research- and evidence-based business plans.

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