Could US Reboot Signal the Value Based Pricing Tipping Point?

Value-based pricing (VBP) has been discussed in pharmaceuticals for decades, but widespread adoption has often lagged behind the theory. Complex measurement requirements, fragmented data, uncertainty about long-term outcomes and the practical difficulty of agreeing contracts have all slowed progress.

That backdrop is changing. The combination of multimillion-dollar cell and gene therapies, better real-world evidence, more sophisticated data infrastructure and growing pressure on payer budgets is creating a stronger incentive to link payment more closely to the value a medicine delivers.

The US model matters beyond the US

The US Medicaid Cell and Gene Therapy Access Model is a particularly important signal. Under the model, CMS negotiates outcomes-based arrangements with manufacturers on behalf of participating state Medicaid programmes. The concept is simple: access to expensive therapies can be expanded while part of the financial risk is linked to whether agreed outcomes are achieved.

The significance is broader than the individual contracts. A large payer using outcomes-linked reimbursement at scale makes value-based approaches more operationally credible and could accelerate similar thinking elsewhere.

A challenge for traditional international reference pricing

VBP also creates tension with traditional International Reference Pricing (IRP). IRP often relies on observable list prices, while increasingly sophisticated agreements use confidential rebates, outcomes-linked payments and other mechanisms that can create a widening gap between list and net price.

If a highly visible list price bears little relationship to the amount ultimately paid, countries referencing that list price can end up anchoring decisions to a number that does not represent the true transaction value. This is particularly challenging for smaller markets that may have less negotiating leverage and less access to confidential net-price intelligence.

What smaller markets can do

Payers do not necessarily need to abandon external referencing. Instead, reference pricing can evolve alongside value assessment. Practical approaches include stronger use of therapeutic comparators, explicit consideration of uncertainty, managed-entry arrangements, improved regional collaboration and greater use of outcomes evidence when a published list price is likely to be a poor proxy for value.

For manufacturers, this means launch sequencing, evidence planning, contracting and IRP can no longer be treated as separate workstreams. A value-based agreement in one major market may influence payer expectations elsewhere even when the confidential commercial terms do not travel with it.

Is this the tipping point?

It is too early to describe VBP as the new global default. The operational challenges remain substantial. However, advanced therapies are making the limitations of conventional payment models harder to ignore, while better data makes outcomes-based approaches more feasible than they were a decade ago.

The direction of travel is clear: pricing teams increasingly need to model not just a single list price, but a portfolio of possible list, net and outcomes-linked scenarios and understand how each could cascade through global markets.

This article reflects the market and policy context at the date of publication.

Further reading

• CMS Cell and Gene Therapy Access Model