Despite substantial investments in groundbreaking treatments, companies struggle to communicate value early and to the right audience. Here’s how they can do better.
Heard of Addyi? The drug, developed by Sprout Pharmaceuticals, received FDA approval a decade ago for the treatment of acquired, generalized hypoactive sexual desire disorder (HSDD) in premenopausal women. But only a few physicians, and fewer women, were aware of this treatment despite its potential to play a significant role in health and quality of life. Addyi’s disappointing performance can be attributed to lack of early and effective value communication, which fostered widespread skepticism around its safety as well as relatively limited payer access when it was launched.
There are likely many drugs that have similarly failed to meet expectations. The root causes of such situations are multifaceted: limited funding, insufficient resources and a market that views most drugs as expensive. Drugs are often seen as “negative goods”—purchased out of necessity—and also as “experiential goods,” i.e., valued through patient experience. This complicates the value messaging. Stakeholders, including payers, physicians, patients and policymakers, each define value differently. Yet the industry often takes a one-size-fits-all approach—for example, by creating value proposition decks that account managers and sales reps present to both payers and physicians, despite these audiences’ different perspectives and priorities.
Collaborating with biotech and pharmaceutical leaders over the last 17 years in my role in consulting and research, I’ve witnessed firsthand the pricing, market access and marketing challenges biopharma companies face. Innovation isn’t enough; rather, success depends on effectively framing, capturing and communicating a product’s value. To do this, companies must start early—well before regulatory approval—and work to convey their products’ long-term benefits.
Engage Early
One of the common mistakes biopharma companies make is delaying value communication. Many companies, especially smaller biotech firms, assume that investing millions of dollars to secure FDA approval guarantees awareness, prescriptions and coverage. This is far from reality.
Rather, value communication must engage payers, providers and stakeholders throughout the drug development process. This builds awareness of the disease or condition, the associated burden, unmet needs and patient affordability, ensuring a well-understood value proposition at the time of drug launch. For example, the Academy of Managed Care Pharmacy’s Preapproval Information Exchange (PIE) framework allows data sharing with payers before FDA approval. While the PIE represents progress, it is just one avenue for communication and is not enough. Companies must engage in continuous, open dialogues with payers, physicians, patients and policymakers long before the launch in order to ensure a product’s success.
Highlight Value Beyond Cost
Drug pricing discussions often overshadow broader conversations on value. While pricing is one of the “4 Ps” of marketing (the others being product, place and promotion), it gets the most scrutiny, perhaps because it’s the most easily quantifiable. This is especially true of high-cost therapies in areas like oncology and rare diseases.
However, conversations about drug pricing often overlook the cost of innovation, comprising years of research and development (R&D), clinical trials and regulatory compliance. Most also overlook the potential of significantly reducing long-term healthcare costs by preventing hospitalizations or disease progression. For example, a Senate health committee hearing led by Senator Bernie Sanders last year put drug company CEOs in the spotlight over high drug prices. The focus was on the affordability of medications for patients, with less emphasis on the R&D expenditures of pharmaceutical companies.
As innovation advances, value discussions must evolve. One of the most significant disconnects I’ve observed is between payers and manufacturers. Payers typically focus on cost control—appropriately; they are doing their job. But they often ask “How much will this cost me?” without considering the long-term benefits of new therapies. While a drug may have a high upfront price, it could reduce hospitalizations, prevent complications, improve quality of life and advance public health, ultimately lowering overall direct or indirect healthcare costs.
Highlighting Genuine Value
Shifting the focus from cost containment to better patient outcomes and long-term healthcare savings is critical to fostering innovation. To bridge this gap, we need practical, objective value measures that go beyond statistics like quality-adjusted life years (QALYs), which many practitioners and payers struggle to apply. Some such measures already exist, while others may need to be developed to fit the drug, market and stakeholders of interest. Manufacturers must clearly communicate the clinical and health outcomes of drugs along with the costs.
Payers, in turn, need to look beyond the immediate price tag, budget impact, net cost and per-member-per-year cost and consider the full spectrum of a drug’s clinical, economic and humanistic value. Shifting the conversation from short-term cost containment to long-term value assessment is essential to ensuring that innovative therapies reach the patients who need them.
The path forward is clear: communication of value—earlier, more transparently and in a more integrated fashion—can help bridge the gap between manufacturers and stakeholders. By fostering a more comprehensive understanding of value, we can create a healthcare system that rewards true innovation and delivers better outcomes for patients.
