Opening up about drug pricing decisions is not optional for biopharma anymore. For the sake of credibility, companies should embrace it.
For decades, the pharmaceutical industry has maintained that decisions about the prices of its medications are confidential. Companies don’t provide a rationale when prices are raised, nor do they voluntarily lower them, until the government issues a mandate.
That needs to change if the industry wants to continue asking Americans to pay multiple times more for drugs than any other developed country.
Healthcare cost transparency isn’t a new priority. It’s just been consistently resisted by the industry. In 2019, President Trump issued an executive order (EO) mandating substantive price transparency initiatives for hospitals and insurers. He didn’t stop there. In February 2025, an EO mandated that patients have the information needed to make well-informed healthcare decisions. This EO stipulated that the federal government would promote access to pricing information and take necessary steps to improve and enforce price transparency requirements.
At the end of 2025, the Trump administration again reinforced the importance of regulating healthcare costs, as it struck deals with several Big Pharma companies to lower prices and invest in U.S. manufacturing and R&D, in exchange for exemptions from tariffs. Still, the cost for 350 drugs went up as the calendar turned to 2026.
The pricing process is complex, and except for the Managed Markets team, it’s usually cloaked in mystery. I’ve spent nearly two decades inside the industry as a strategic communications leader, guiding companies from preclinical to postmarketing, so I know the methodology exists. It’s deeply rooted in clinical and economic data, but it’s rarely discussed outside the confines of payer-related conversations.
[Pricing methodology] is rarely discussed outside the confines of payer-related conversations. That’s a problem.
That’s a problem. If insiders can’t access and explain this information, then it’s unsurprising that physicians, pharmacists, policymakers and patients can’t either. The negative impact is significant and extends beyond just reputational issues. When prices increase, and people don’t understand why, they become more vocal. Advocates take up the cause, and the call for transparency grows louder, until government is forced to act, and pharma is facing both price reduction mandates in addition to deeper mistrust by the public.
If the industry truly wants to regain stakeholder trust, it needs to clarify how the prices of individual medications are determined, and this needs to happen soon.
Pharma Speaks in Fragments
When questioned about prices, the industry relies on generalities, citing the need to recoup R&D costs and PDUFA fees, reliance on reference pricing, and the complexities of reimbursement. These factors are real, but a critical issue remains: the current rationale explains why drugs on the whole are expensive, not why a specific drug costs a certain amount.
Stakeholders have the right to understand which clinical endpoints justify premium pricing; how cost-effectiveness modeling compares the drug to alternatives; which evaluators, such as the Centers for Medicare and Medicaid Services (CMS) and the Institute for Clinical and Economic Review (ICER), inform the range for reference pricing; and how payer negotiations shape final list prices.
Pharma’s R&D investments are substantial. Developing a medication costs more than $1 billion and takes longer than 10 years. Companies are right to protect their ability to fund future innovation. But guarding pricing methodology creates the perception that costs can’t be defended, which invites the scrutiny pharma wants to avoid as it raises prices.
Transparency offsets reputational damage and repairs stakeholder relations. By illustrating pricing processes, physicians and patients have fewer reasons to demand change, meaning policymakers become less inclined to force the issue. Detractors wouldn’t criticize pharma as frequently, and as the industry aligns around a disclosure philosophy, trust could be rebuilt.
Guarding pricing methodology creates the perception that costs can’t be defended.
Transparency Will Eventually Be a Mandate
Other industries have had transparency forced upon them. For example, the U.S. airline industry was forced to disclose all-in ticket prices, ending the practice of hiding true costs until checkout, because people deserve to know what they’re paying for. Stakeholders across many verticals now expect companies to explain choices that affect their businesses, finances and lives, especially when they’re made behind closed doors.
Once that expectation is set, resistance amplifies distrust. The current administration has made it clear that pharma pricing is a priority, and the window to proactively define disclosure is closing, with the next step being mandatory transparency.
Compare pharma to the medical device industry, where manufacturers proactively make healthcare economics (HECON) data available for independent cost-effectiveness analyses published in journals like NEJM. This doesn’t harm pricing power. It strengthens payer confidence, speeds formulary decisions and improves trust by showing evidence that justifies value.
Pharma could adopt the same approach, instead of its current defensive posture. Industry-sponsored reports, from leading companies such as Johnson & Johnson, cite trends alluding to a lack of price increases but avoid revealing individual drug costs. Critics contended that the company only disclosed that its pricing across all its brands increased 0.5% in 2024, but they didn’t share how much it raised list prices on average.
Political, regulatory and consumer pressure mean that transparency is inevitable across the pharmaceutical industry. The question remains whether it will be achieved through a proactive choice or a forced mandate that could go too far and hurt consumers. The company that chooses proactive transparency will gain a powerful advantage by making those rejecting it seem evasive.
The Onus for Transparency Is on Leadership
When a company’s credibility erodes, the reputational damage doesn’t land on the desk of the Market Access lead. It falls squarely on the C-suite, and its impact resonates with shareholders and the board of directors. That’s why it’s incumbent upon CEOs to make transparency a proactive strategy.
Market Access teams need to work with their communications colleagues to translate cost-value data into contextualized narratives. Public relations teams require freedom to amplify these stories externally, and most importantly, legal can’t perceive explanation as exposure.
Start with one drug and explain its price determination: the endpoints that drove value assessment, how quality-adjusted life years (QALY) data compared it to the standard-of-care and how payer feedback was implemented. Publish a white paper, then see if payer negotiations become less adversarial, if formulary placement accelerates and if stakeholder trust improves. Then expand that approach to the rest of the brands.
The value of pharma’s work is undeniable, but the industry needs to confront a hard truth: many stakeholders don’t trust it. Transparency is a key step toward rebuilding that trust.
The companies that move first will shape responsible disclosure protocols, gain an advantage with payers and policymakers and be seen as advocates for the public’s interests. The ones that insist on secrecy will sacrifice credibility, and their silence will be seen as avoidance.
