Value-Based Pricing

We believe finding a balance between investing in innovation and providing affordable medicines is key to bettering the health of the world.

Over the past two decades, the pharmaceutical industry has discovered life-changing treatments for some of our deadliest diseases, including HIV/AIDS, cancer, and diabetes. These discoveries have saved or improved the lives of hundreds of millions of people – and continue to do so.

Americans want a healthcare environment that rewards the discovery of new lifesaving medicines. To continue new drug development, medicine prices must ultimately cover the significant cost of bringing innovative treatments to patients – careful, lengthy, expensive research and development.

Lilly supports a value-based benefit design that takes into account the value to patients, providers, and society as a whole. These systems reward improvement in patient outcomes and healthcare system processes, rather than the quantity of services provided. Pricing is based on value to the patients who need access to the medicines, and the healthcare systems that will deliver the medicines. It’s supported with evidence gathered through a rigorous assessment. A price that is so high few can afford our product is not ideal, but a price that is too low to repay our investment doesn’t allow Lilly to continue developing innovative medicines.

When market forces are allowed to work, Lilly and other pharmaceutical companies compete on price and effectiveness, while insurers negotiate for the best prices. When patents expire, generic medicines deliver savings through lower prices. The combination of competition among patented medicines, price negotiation, and development of low-cost generics drives advances in new medicines and reduces costs over time.

Globally, the complexities of health challenges require collaboration among private companies, governments, health providers, and others. Lilly advocates for policies that support differential pricing – the charging of different prices based on a purchaser’s ability to pay. Such policies help balance the desire to offer lower prices for low-income populations, while still rewarding innovation.

Please enable your browser's JavaScript setting in order to access this site