Introduction
The pharmaceutical industry has revolutionized modern healthcare, but rising drug costs and opaque pricing structures have led to mounting scrutiny. As healthcare becomes more consumer-driven, the call for greater price transparency has grown louder, especially in the face of rapidly escalating treatment costs. At its core, healthcare price transparency involves clearly disclosing the costs of medical services, treatments, and provider fees to consumers before care is delivered.¹ This means presenting pricing information in a way that is both accessible and accurate.
In the United States, recent executive orders have expanded this concept to explicitly include the prices of prescription drugs, an effort designed to empower patients, reduce surprises, and promote competition.¹
Rising pressure on drug pricing systems
The financial burden of prescription drugs continues to swell. In 2023, US pharmaceutical spending reached $722.5 billion.² This already significant figure is exacerbated by a fragmented retail drug system, which often leaves patients and providers guessing at out-of-pocket costs.²
At the same time, the cost of innovation is soaring. New drugs now frequently launch at record-breaking prices. The median annual price for novel treatments hit $300,000 in 2023, a 35% increase from the previous year.³ Such figures have intensified the debate around price transparency, what it should look like, who benefits, and at what cost.
The growing push for price transparency is rooted in the belief that it can enable policymakers to negotiate more equitable pricing, curb potential price manipulation, and strengthen public trust.4 For patients, accessible and understandable pricing information supports better informed healthcare decisions and promotes fairer access to treatment.4 In the broader context, increased transparency is expected to help healthcare systems become “smarter buyers,” driving greater efficiency and more strategic resource allocation.5
The opportunities and trade-offs of price transparency
The debate around pharmaceutical price transparency presents compelling arguments on both sides. Advocates argue that transparency promotes fairness, accountability, and more efficient spending. But it’s not without significant trade-offs, especially in the context of international reference pricing (IRP).
Public disclosure of net prices could disrupt the IRP system, which relies on confidential launch strategies and discounting to maintain profitability. Increased openness might reduce payer leverage, disincentivize market launches in lower-income countries, or homogenize pricing in competitive tenders, ultimately limiting access.
On the other hand, greater visibility can support fairer pricing across regions, enable better budget forecasting, and enhance accountability for both manufacturers and payers. Yet, these benefits may not always translate into more equitable access, particularly in countries that depend on steep discounts to afford breakthrough therapies.
The true impact of price transparency, or the lack thereof, comes into sharp focus when we explore how it has influenced pricing journeys of specific high-impact treatments.
Case Study: Zolgensma (Spinal Muscular Atrophy – SMA)6,7,8
Zolgensma, a gene therapy for spinal muscular atrophy (SMA), entered the market in 2019 with a price tag of $2.125 million per dose making it the most expensive medicine ever launched. While the cost is largely absorbed through insurance premiums and public funding, it remains inaccessible to many patients in low- and middle-income countries. A notable transparency gap surrounds its development, as much of the early research was publicly funded through taxpayer contributions and charitable organizations. This raises critical questions about the industry’s justification for high prices based solely on private R&D investment. In a controversial move, a Spanish court blocked public access to Zolgensma’s reimbursement price, citing the protection of Novartis’s commercial interests highlighting ongoing tensions between public accountability and proprietary pricing in the context of publicly supported medical innovation.
Case Study: Kymriah (CAR T-cell Therapy for Lymphoma)9,10
Kymriah, a groundbreaking CAR T-cell therapy for certain types of lymphoma and leukaemia, carries a list price of $475,000 per infusion, though total treatment costs can surpass $1 million when factoring in the management of severe side effects. Its launch was seen as a turning point, “shattering oncology drug pricing norms.” A notable transparency gap exists between its estimated manufacturing cost reported at $15,000 in 2012 and its current market price, prompting debate over the rationale behind such a steep markup, especially given that approximately 36% of patients experience relapse within a year. The high cost has rendered Kymriah unaffordable in many countries, including across parts of Europe, presenting serious access and affordability challenges for national healthcare systems.
Case Study: Yescarta (CAR T-cell Therapy for Lymphoma)11,12
Yescarta, a CAR T-cell therapy used to treat certain blood cancers, is priced between $373,000 and $475,000 per infusion, with overall treatment costs potentially exceeding $500,000. Its pricing has become a focal point in the European debate over pharmaceutical transparency. In Spain, where public agencies negotiate drug prices, the reimbursement figures are often treated as “state secrets.” Transparency group Civio has legally challenged the Ministry of Health’s refusal to disclose Yescarta’s reimbursement price, with several court rulings supporting public access in the interest of accountability for public spending. The ongoing legal dispute underscores the pharmaceutical industry’s resistance to transparency and its implications for payer leverage across Europe. Access to Yescarta is further constrained by the complexity and cost of administering CAR T-cell therapies, as well as lingering uncertainties around their long-term clinical efficacy.
Case Study: Orkambi (Cystic Fibrosis)13,14
Orkambi, a cystic fibrosis treatment developed by Vertex Pharmaceuticals, became a high-profile case in the UK after protracted negotiations with NHS England stalled over its £105,000 per patient per year price deemed “unaffordable” by the health system. The opacity surrounding these negotiations sparked widespread public frustration. Although Vertex claimed it had offered the “best price in the world,” it rejected NHS England’s counteroffer, citing concerns about setting a precedent for future cystic fibrosis therapies. NICE later ruled the drug not cost-effective, estimating a cost per QALY of £300,000, ten times its accepted threshold. Campaigners argued that a generic version could be made for under £5,000 a year, fuelling concerns about opaque R&D costs and monopolistic pricing practices.
From case-studies to strategic takeaways
These case studies illustrate how the lack of price transparency amplifies the challenges of high-cost treatments across the healthcare ecosystem. Patients face financial strain, delayed access, and diminished trust in the system due to unpredictable costs.3 Providers encounter ethical and administrative hurdles when discussing treatment affordability, while payers and governments grapple with budget constraints and limited negotiating power under confidential pricing.⁴
At the same time, from the manufacturers’ perspective, confidentiality allows for the flexibility to offer targeted discounts, adapt pricing strategies to diverse market conditions, and protect the significant investments made in R&D, particularly in areas involving high clinical and commercial risk (as seen in Zolegensma’s case study). Many manufacturers also point out that excessive transparency could inadvertently lead to price convergence across countries, potentially reducing access in lower-income markets if global reference pricing were triggered.15
The result is a complex landscape where the goals of innovation, affordability, and accountability must be carefully balanced, requiring collaboration among stakeholders.
Conclusion: Navigating the way forward
Achieving meaningful price transparency in pharma will require more than blanket disclosure, it demands a collaborative approach that respects the realities of R&D investment, market diversity, and access goals. By aligning incentives and ensuring flexibility, stakeholders can move toward a model that fosters both innovation and accountability by building trust through smarter, more strategic transparency.
References
- https://blog.healthequity.com/reasons-explore-price-transparency-healthcare
- https://www.researchgate.net/publication/389156056_Exploring_the_Lack_of_Transparency_in_Prescription_Drug_Costs_Contributors_and_Avenues_for_Reform
- https://www.aha.org/news/blog/2024-05-22-drug-prices-and-shortages-jeopardize-patient-access-quality-hospital-care
- https://www.jbclinpharm.org/articles/the-effect-of-drug-pricing-policies-on-healthcare-equity-and-affordability-13081.html
- https://marksmanhealthcare.com/2021/08/16/impact-of-drug-pricing-transparency-on-healthcare/
- https://www.rxbenefits.com/blogs/5-expensive-gene-therapies/
- https://saludporderecho.org/en/the-national-court-undermines-progress-in-transparency-on-medicine-prices/
- https://www.propublica.org/article/zolgensma-sma-novartis-drug-prices-gene-therapy-avexis
- https://kffhealthnews.org/news/cascade-of-costs-could-push-new-gene-therapy-above-1-million-per-patient/
- https://ascopubs.org/doi/10.1200/EDBK_397912
- https://pmc.ncbi.nlm.nih.gov/articles/PMC9566791/
- https://civio.es/no-more-secret-prices-for-new-drugs/
- https://www.bmj.com/content/364/bmj.l1094
- https://committees.parliament.uk/writtenevidence/99879/pdf/
- https://www.ispor.org/publications/journals/value-outcomes-spotlight/vos-archives/issue/view/global-price-transparency/transparent-drug-prices-may-not-help-in-expanding-access
