Payer Power: What Are The Future Implications For Life Science Companies Developing New Products?

How US Commercial Payers Will Manage Rapidly Increasing Drug Costs

Payers cannot control the pricing of new products by biopharmaceutical companies, but their goal is to deliver quality health care in a cost-effective manner. Several payer medical directors representing over 100 million commercially insured members have shared their insights for managing the challenging US market – revealing their thoughts on drug pricing currently, and steps they plan to take in the next 3 to 5 years to better control rising costs.

IV1901_Payer-Power_1027543402_1200.jpg

The US does not regulate or negotiate the prices of new prescription drugs when they come onto market. Instead, the US allows drug makers to set their own prices for a given product – and allows every drug that is proven to be safe to come onto market. The US also does not restrict life science companies from raising prices on marketed products and the industry has taken full advantage of this where there are no directly substitutable products. In fact, it is now estimated that far more of the industry’s revenue growth is due to price increases on marketed products than from new products.

Elsewhere, countries with single payer health care systems have government sanctioned agencies that meet with pharmaceutical companies and haggle over...

Read the full article – start your free trial today!

Join thousands of industry professionals who rely on In Vivo for daily insights

  • Start your 7-day free trial
  • Explore trusted news, analysis, and insights
  • Access comprehensive global coverage
  • Enjoy instant access – no credit card required
Start Free Trial

Already a subscriber?

More from Market Access

Crisis Or Opportunity? US MFN Policy Could Test Japan’s Appetite For Reforms

 
• By Lisa Takagi

While the adoption of most favored nation drug pricing in the US stands to affect Japanese biopharma firms now heavily reliant on this market, it might also present an opportunity for pricing and policy reforms at home.

AI In Health Delivery: Patients Most Confident When HCPs Are In Charge

 
• By Ashley Yeo

Annual survey of patients and professionals shows how attitudes to health system transformation are evolving and what stakeholders are demanding as acceptance of AI tools accelerates.

US Health System Redesign Critical, NAM’s Medical Experts Warn Trump Government

 
• By Ashley Yeo

The whirlwind back-and-forth on US tariffs and Robert F. Kennedy jr.’s plans to deregulate health care have become all-preoccupying, but the National Academy of Medicine was first to set out President Trump’s health administration priorities.

Future Of 340B Rebate Models Hinges On Regulatory Decision Point

 
• By Ed Silverman

As pharmaceutical companies seek to transform how drug discounts are delivered under the 340B program, a federal ruling reinforces HRSA's authority. The industry must now wait for critical guidance from the Trump administration that could reshape compliance strategies and financial outcomes.

More from In Vivo

Deals Shaping The Industry, May 2025

 
• By In Vivo Team

An interactive look at pharma, medtech and diagnostics deals made during May 2025. Data courtesy of Biomedtracker.

Podcast: Flagship’s Vision To Predict And Prevent Illness, With Raj Panjabi

 
• By David Wild

Flagship Pioneering senior partner Raj Panjabi discusses shifting health care from reactive treatment to AI-powered prediction and prevention of disease before symptoms emerge.

Rising Leaders 2025: Namrata Saroj On The Importance Of Authenticity In Ophthalmology

 
• By Sushmita Panda

Namrata Saroj, chief business officer of Ocular Therapeutix, is highly respected in the retina community for her contributions to drug development. She talked to In Vivo about her journey in ophthalmology, leadership philosophy and the importance of authenticity in a close-knit specialty.