Value-based pricing

Value-based pricing (also called value-optimised pricing) is a pricing strategy which sets prices primarily according to the perceived or estimated value of a product or service to customers rather than according to the cost of developing the product or its historical price.

In the healthcare industry, decision makers are calling for manufacturers to tie the prices of drugs to their actual value to patients, a process which becomes easier with the growth of targeted or individualised therapies. Recently, there has been interest in ‘indication-based pricing’, which recognises that value may vary according to different uses of a drug (e.g. in different oncology populations), but this has not yet been implemented in healthcare systems.