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Abstract
In 2019, Zolgensma, a gene therapy for patients suffering from Spinal Muscular Atrophy (SMA), became famous for being ‘the most expensive drug ever’. Its high price was justified by ‘the value’ that the drug will bring to patients and society, illustrating a rationale that has come to be known as value-based pricing. This paper builds on the literature in valuation studies and economic sociology, and on the debates that the case of Zolgensma triggered in France, to provide a conceptual and empirical analysis of a value-based formulation of prices. We argue that formulating prices out of value produces an orientation towards the future which has epistemic and political consequences. We analyse Zolgensma’s value-based price as a composite of narratives and calculations that operates as a regulatory tool, a contractual arrangement, and an object of expertise. In these different settings, its distinctive temporality questions the commensurability of estimated benefits and desirable futures, the treatment of uncertainty, and the relevance of past costs and future value.
Acknowledgements
We thank the participants at the SASE 2021 Conference track ‘Age of Pandemics: Regulation, Innovation, and Valuation in Markets for Health and Medicines’, 4S 2021 Conference panel ‘Transforming the Development and Governance of Pharmaceuticals’, EGOS 2022 Conference track ‘Valuation and Critique in the Good Economy’, and the 2023 workshop ‘Prix et accès aux médicaments’, as well as Nassima Abdelghafour, Kristin Asdal, Michel Callon, our colleagues at the Centre de sociologie de l’innovation, and our partners in the research project SPIN (Social Pharmaceutical Innovation) for their comments on previous versions of this paper. We are grateful to five anonymous reviewers for their remarks and suggestions.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Ethical approval statement
This work was a non-interventional study and did not require ethical approval.
Notes
1 The list price is different from the real price that results from confidential negotiations between the payer and the provider.
2 Since the end of November 2022, the price of Zolgensma has been surpassed by Hemgenix (€3.4 million per dose), a treatment for Haemophilia B.
3 Conditional marketing authorization is a fast-track approval for a treatment that fulfils an unmet medical need.
4 Early-access authorization is granted by the French Medicines Agency (ANSM) to innovative treatments upon their presumed efficacy and safety.
5 The French ‘Sécurité Sociale’ offers public coverage for drugs and treatments under certain conditions.
6 Negotiations usually include rebates, budget capping, size of the targeted population, as well as benchmarking with reference prices in EU countries. In France, negotiations are framed by a multi-annual agreement between the pharmaceutical industry and the CEPS (Committee for the Evaluation of Medicinal Products) which is composed of representatives of the Ministry of Health, the Ministry of Economy, and the French ‘Sécurité Sociale’. Value-based pricing therefore comes as an additional element upstream to price negotiations.
7 As per the French law, this was made mandatory in 2013 for treatments whose prices may significantly affect the budget of the French ‘Sécurité Sociale’.
8 In 2022, Novartis reported that two children on Zolgensma died of acute liver failure.
9 All the quotes from documents and interviews in French have been translated by the authors.
10 The incremental cost-effectiveness ratio is not a strict cost-benefit ratio like the cost per QALY is, but an estimation of the differential costs induced by the new treatment compared to existing alternatives, pondered by their respective benefits. It aims at situating the new treatment on an efficiency curve in comparison to existing alternatives (e.g. the best current options). The use of this ratio is cohesive with the mission of the HAS, which is not asked to determine a range of reasonable prices for a new treatment but to assess its value-for-money.
11 The HAS official economic statement on Zolgensma was passed on to the French authorities. At the time of writing, price negotiations are seemingly still underway.
12 We thank one anonymous reviewer for informing us about this.
13 We thank one anonymous reviewer for leading us to this observation.
14 https://icer.org/who-we-are/, accessed in May 2022.
15 Real-world data and evidence have turned into a topical issue in the debates on value-based pricing (Augustovski, Citation2019).
16 It is worth noting that an entire journal in the field of health economics is devoted to the topic of ‘Value in Health’.
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Liliana Doganova
Liliana Doganova is Associate Professor at Centre de sociologie de l’innovation, Mines Paris, PSL University. At the intersection of economic sociology and Science and Technology Studies, her research explores valuation practices in the economy and has appeared in journals such as Economy and Society, the Journal of Cultural Economy, Research Policy, Science as Culture, and Science and Public Policy. Her new book, Discounting the future: The ascendancy of a political technology (2024), explores the links between temporality and valuation through a historical sociology of the technique of discounting. Her current research projects focus on forestry and drug pricing.
Vololona Rabeharisoa
Vololona Rabeharisoa is Professor of Sociology at Mines Paris, PSL University, and senior researcher at Centre de sociologie de l’innovation. Her background is in Science and Technology Studies. She is interested in the increasing involvement of civil society organizations in scientific and technical activities. For several years, she has investigated the engagement of patient organizations with biomedical research and its transformative effects on expertise and on the governance of health issues. She has extensively published on these topics. She continues her work by exploring the involvement of patient organizations in therapeutic innovation and in the debates on the organization of drug markets and drug prices.