CEVR authors respond to commentary about industry funding and their position on value-based pricing

Date: May 25, 2022

A STAT News First Opinion commentary1 criticizes the New England Journal of Medicine and our November 2021 NEJM Perspective2 for not providing transparency regarding conflicts of interest.  The STAT News commentary also criticizes our NEJM piece for advancing drug industry arguments about value-based pricing.  We believe that the STAT News commentary is ill informed and misleading.

First, the STAT News article argues that our NEJM commentary “echoes the perspective of pharmaceutical manufacturers…” because “value-based pricing frees them to justify higher prices…”  This statement betrays substantial ignorance about the debate over value-based pricing.

The drug industry has often opposed using cost-effectiveness analysis, the method our piece advocates, for generating “value-based” drug prices.  Nor has industry generally been a fan of the non-profit Institute for Clinical and Economic Review (ICER), which our piece also supports.  Most ICER reviews conclude that the price of the drug under evaluation is too high.  One analysis concluded that moving to value-based pricing along the lines suggested by ICER would reduce industry revenues by about 15%.3  Even sources cited by the STAT News First Opinion piece to support the claim that industry favors value-based pricing fail to do so.  For example, one cited article4 explains that value-based pricing argued for a lower price for a new class of cholesterol-fighting drugs.  Another cited source5 quotes industry reports explaining that value-based pricing represented an obstacle to higher drug prices.  Ironically, industry and their allies have sometimes criticized our support of value-based pricing.6

Second, as the STAT News commentary notes, we did disclose our support, which includes industry sources, government agencies, and nonprofit foundations, some of which (Commonwealth Fund7, Arnold Ventures8, ICER9) have often been critical of the drug industry.  In fact, the authors cite a previous First Opinion piece by one of us (Dr. Ollendorf)10 that mentions the author’s success as a drug industry consultant while conveniently omitting that (a) after consulting, Dr. Ollendorf spent over a decade as ICER’s chief scientific officer, and (b) the piece itself is highly critical of industry’s about-face on value-based pricing.

We believe that value-based pricing is a rational approach to addressing a critical societal problem, namely how to resolve the tension between controlling spending on prescription drugs and encouraging innovation that can bring true breakthrough medicines.  As we explain in our book, The Right Price: A Value-based Prescription for Drug Costs (Oxford University Press, 2021), cost-effectiveness analysis offers an opportunity to align a drug’s price with the clinical benefit it brings.  This perspective is often echoed not by the pharmaceutical industry, but by many leading government agencies around the world, such as NICE in England or CADTH in Canada. We believe the authors would do well to interrogate these international pricing policies, or at least to read our book before drawing conclusions about the impact of industry relationships on the perspective taken in our commentary.

Peter J. Neumann, ScD

Joshua T. Cohen, PhD

Daniel A. Ollendorf, PhD



1. Shapiro MF, Wolfe SM.  First Opinion: NEJM, other journals: provide more transparency about conflicts of interest or don’t publish conflicted articles.  STAT News.  May 19, 2022.  Accessed at: https://www.statnews.com/2022/05/19/nejm-other-journals-make-conflicts-of-interest-more-transparent-or-dont-publish/, May 2022.

2. Neumann PJ, Cohen JT, Ollendorf DA. Drug-Pricing Debate Redux - Should Cost-Effectiveness Analysis Be Used Now to Price Pharmaceuticals? N Engl J Med. 2021 Nov 18;385(21):1923-1924. doi: 10.1056/NEJMp2113323. Epub 2021 Nov 13. PMID: 34767318.

3. Wilkerson J. Bernstein Reports Pharma Could Survive Price Setting Based On Value. Inside Health Policy. May 20, 2021. Accessed at: https://insidehealthpolicy.com/inside-drug-pricing-daily-news/bernstein-reports-pharma-could-survive-price-setting-based-value?destination=node/121805, May 2022.

4. Waldman A. Big Pharma Quietly Enlists Leading Professors to Justify $1,000-Per-Day Drugs. ProPublica. February 23, 2017. Accessed at: https://www.propublica.org/article/big-pharma-quietly-enlists-leading-professors-to-justify-1000-per-day-drugs#:~:text=give%20the%20industry%20carte%20blanche%20to%20charge%20whatever%20it%20wants, May 2022.

5. Committee on Oversight and Reform, U.S. House of Representatives. Drug Pricing Investigation: Majority Staff Report. December 2021.  Page 68.  Accessed at: https://oversight.house.gov/sites/democrats.oversight.house.gov/files/DRUG%20PRICING%20REPORT%20WITH%20APPENDIX%20v3.pdf, May 2022.

6. Coelho T. Will ICER’s response to attacks on the QALY quiet the critics?: A reply from the Partnership to Improve Patient Care.  February 8, 2019. Accessed at: http://www.pipcpatients.org/blog/chairmans-corner-will-icers-response-to-attacks-on-the-qaly-quiet-the-critics-a-reply-from-the-partnership-to-improve-patient-care, May 2022.

7. Gustafsson L, Nuzum R.  The case for drug-pricing reform – The cost of inaction.  Accessed at: https://www.commonwealthfund.org/blog/2021/case-drug-pricing-reform-cost-inaction, May 2022.

8. Arnold Ventures.  Drug prices.  Accessed at: https://www.arnoldventures.org/work/drug-prices, May 2022.

9. Sagonowsky E.  Cost watchdog ICER lays out plans to scrutinize pharma’s costliest price hikes.  Fierce Pharma.  January 21, 2019.  Accessed at: https://www.fiercepharma.com/pharma/icer-lays-out-plans-to-scrutinize-pharma-s-costliest-price-hikes, May 2022.

10. Ollendorf DA.  Rather than turning its back on the QALY, pharma should collaborate on efforts to improve it.  STAT News, May 7, 2021.  Accessed at: https://www.statnews.com/2021/05/07/pharma-collaborate-efforts-improve-qaly/#:~:text=I%20was%20fortunate%20to%20have%20realized%20some%20success%20as%20a%20research%20consultant%20to%20the%20pharmaceutical%20and%20biotech%20industries, May 2022.






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