From Challenge to Opportunity

Over the past decade the relationships between the industry and its stakeholders have fundamentally changed. Consolidated, institutionalised payers with new evidence requirements for reimbursement are demonstrating a growing reluctance to pay even for breakthrough innovation. In the absence of consensus on what constitutes “value”, the industry is wary about embarking on risky research, which may not be reimbursed, and there is a danger that we are seeing a significant withdrawal from R&D despite unmet need.

The situation presents an important opportunity, in which stakeholders with a mutual interest in achieving successful outcomes come together to create a model of “Shared Value”. In this model industry and payers balance incentives for true innovation with prices that reflect ability and willingness to pay; there is a focus on unmet need leading to greater investor confidence that R&D capital allocation will be predictably reimbursed; clinical trials could become cheaper and smaller; and failures are shared, thereby reducing costs for developers and patients. The end result is new medicines to alleviate pain, prolong life and manage disease.

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