By Robert Popovian & Mark Atalla
July 16, 2021

Recently the U.S. Food and Drug Administration granted accelerated approval to aducanumab (Aduhelm), the first Alzheimer’s Disease treatment since 2003. While there has been significant discussion about aducanumab’s approval process and the initial price, little attention has been paid concerning the central dilemma facing the U.S. health care system: how to best value and pay for current and next-generation biopharmaceutical innovation.

The principles that guide consumer markets — price, income, quality and expected benefits — are not relevant in the U.S. health care system since characteristics such as the lack of price transparency, information asymmetry between providers and patients and, most importantly, health insurance prevent the patient from comparing the marginal value of an intervention against its price.

The breakdown of the economic proposition has put the United States in an unenviable position to spend more per person on health care than any other Organisation for Economic Co-operation and Development country while suffering from a declining life expectancy. As such, questions regarding value and spending are front and center for policymakers, employers, patients, and caregivers.

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