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The value of medicines in the U.S.
A core principle of the U.S. healthcare system is that treatment decisions should be made through shared decision-making between patients and physicians.1 This decision is informed by an individual’s medical history, disease state and personal preferences and is influenced by the patient’s insurance benefit design.2
The American approach to valuing medicines should reflect the diverse, decentralized U.S. system — a system that supports treatment decisions that fit the unique needs of each patient.
Read the full text here.
The American approach to valuing medicines should reflect the diverse, decentralized U.S. system — a system that supports treatment decisions that fit the unique needs of each patient.
Read the full text here.
Some argue the U.S. should adopt top-down value assessment models used in some parts of the world even though they are inherently flawed
Too often, value assessment models fail to account for the unique needs of individual patients. These impersonal models can cause medicines to be excluded from coverage for entire populations, even if those medicines would help specific patients within those populations.3
When the U.S. system works: A patient-centered approach to valuing medicines
The U.S. system is driven by a market-based approach to understanding the value of medicines that supports strong incentives for biopharmaceutical innovation and investments.4 As a result, American patients benefit from the earliest availability and access to the broadest, most innovative set of therapies in the world, enabling patients to find treatments that work for them.5
68%
25 of the 37 drugs the U.S. Food and Drug Administration (FDA) approved in 2022 (68%) were approved in the U.S. before any other country.6
2.5 years
In Canada from 2018–2022, publicly insured patients waited 2.5 years longer than Americans with Medicare for access to newly approved drugs.7
78%
78% of drugs launched by G20 nations from 2012–2021 were available in the U.S. within one year of launch, vs 38% in the U.K. and 21% in Canada.5
Multiple drivers of value in healthcare
Value in healthcare is influenced by many factors, but assessments often overlook or underrepresent important drivers.8, 9
Recognizing and incorporating broader drivers is essential to capturing the full spectrum of value to patients and society. Some examples include8, 9:
Recognizing and incorporating broader drivers is essential to capturing the full spectrum of value to patients and society. Some examples include8, 9:
Scientific spillover: Medical innovations often lead to knowledge gains that benefit future research and treatment development.
Value of hope: Some treatments offer intangible but meaningful benefits, such as giving patients hope for longer survival or a future cure.
Productivity: Effective treatments can improve patients’ ability to perform their daily tasks, reducing societal and economic burden.
Severity of disease: Treatments for more serious or life-threatening conditions tend to offer greater relative value due to the high burden they alleviate.
Johnson & Johnson supports valuations of medicines that adhere to the following principles:10
Patient-centered
A patient-centered approach is fundamental to achieving the most efficient and effective use of medicines and ensuring that access to treatment is nondiscriminatory. Without such an approach, providers may direct patients toward treatments that are inefficient and ineffective, resulting in wasted resources for the patient, provider and healthcare system. This approach respects patient autonomy by placing every patient’s outcome at the forefront of decision-making.
Holistic
Valuations must not rely on information from a small set of simple summary statistics, such as average life expectancy and average cost, but instead consider the full range of impacts to patients, the healthcare system and society. Valuations that are incomplete will distort the marketplace, resulting in both today’s and tomorrow’s patients receiving suboptimal care.
Deliberative and flexible
Using a deliberative decision-making process is critical, as is avoiding the use of strict rules or oversimplified metrics, such as discriminatory quality-adjusted life year (QALY), expected value of life years gained (evLYG) or healthy years in total (HYT). Instead, the full diversity of healthcare values must be considered, prioritizing those of patients.
Decentralized and locally relevant
Valuations must consider the specific needs of local health systems and local patients. Treatment needs in rural areas or underserved communities, for instance, may differ significantly from treatment needs in metropolitan areas or communities that are adequately resourced.
Clinically driven
Clinically driven valuations best preserve the opportunity to maximize the health of every patient. Financing of medicines should be considered separately and addressed through insurance solutions.
Policies to improve the U.S. healthcare system
Although the U.S. system supports patient-centered decision-making, opportunities for reform remain. Policymakers should support patients by:
01
Increasing transparency in the drug supply chain, including PBM reforms to bolster patient access and lower patient costs.
02
Ensuring that patient cost sharing is
based on net prices and that cost-sharing assistance is counted toward patient
out-of-pocket contributions.
03
Eliminating the ability of large health systems and for-profit middlemen to continue profiting from the 340B Drug Pricing Program while vulnerable patients are left behind.
Citations
All citations
- Daniel D. Matlock, Larry R. Jackson II, Amneet Sandhu, and Laura D. Scherer. “Past, Present, and Future of Shared Decision-Making.” American Heart Association Journals. July 2024. DOI: 10.1161/CIRCOUTCOMES.124.010584. Accessed January 2026.
- US Preventive Services Task Force. “Collaboration and Shared Decision-Making Between Patients and Clinicians in Preventive Health Care Decisions and US Preventive Services Task Force Recommendations.” JAMA. March 29, 2022. doi:10.1001/jama.2022.3267. Accessed October 2025.
- Michael S. Willis, Andreas Nilsson, and Cheryl A. Neslusan. “A Review of Heterogeneity in Comparative Economic Analysis, with Specific Considerations for the Decentralized US Setting and Patient-Centered Care.” PharmacoEconomics. Published online March 8, 2025. 2025;43:601–616. DOI: 10.1007/s40273-025-01478-z. Accessed October 2025.
- Stephen Ezell and Kelli Zhao. “The Economics of BioPharmaceutical Innovation: Symposium Report.” Information Technology & Innovation Foundation. March 2023. https://www2.itif.org/2023-biopharma-economics.pdf. Accessed January 2026.
- PhRMA. “Global Access to New Medicines Report” April 2023. https://cdn.aglty.io/phrma/global/resources/import/pdfs/2023-04-20%20PhRMA%20Global%20Access%20to%20New%20Medicines%20Report%20FINAL-1.pdf. Accessed October 2025.
- U.S. Food and Drug Administration. “New Drug Therapy Approvals 2022.” Updated January 10, 2023. https://www.fda.gov/drugs/novel-drug-approvals-fda/new-drug-therapy-approvals-2022. Accessed October 2025.
- Brett Skinner. “Waiting for new medicines in Canada, Europe, and the United States 2018-2023.” Canadian Health Policy. Updated April 14, 2024. https://doi.org/10.54194/QQVC3893. Accessed October 2025.
- Peter J. Neumann, Louis P. Garrison, and Richard J. Wilke. “The History and Future of the “ISPOR Value Flower”: Addressing Limitations of Conventional Cost-Effectiveness Analysis.” PubMed Central. 2022 Apr;25(4):558-565. DOI: 10.1016/j.jval.2022.01.010. Accessed October 2025.
- Jason Shafrin, Jaehong Kim, et al. “Valuing the Societal Impact of Medicines and Other Health Technologies: A User Guide to Current Best Practices.” Forum Health Economics Policy. November 15. DOI: 10.1515/fhep-2024-0014. Accessed February 2026.
- Johnson & Johnson Innovative Medicine. “2023 Johnson & Johnson Innovative Medicine U.S. pricing transparency report.” October 2024. https://policyresearch.jnj.com/download/2023-johnson-johnson-innovative-medicine-u-s-pricing-transparency-report-11-26-24-copy-pdf. Accessed October 2025.