Rethinking Value in Health Innovation: from mystifications towards prescriptions
17 November 2017
UCL Institute for Innovation and Public Purpose
Ref: IIPP WP 2017-04
Professor in the Economics of Innovation and Public Value
Director Institute for Innovation and Public Purpose, University College London
PhD Research Fellow at UCL Institute for Innovation and Public Purpose
MD candidate at Northwestern University’s Feinberg School of Medicine
Debates over value in health innovation have become increasingly dominated by cost-benefit assessments and “value-based pricing”. This paper examines this prevailing narrative and its weaknesses and then presents an alternative framework for reimagining value. Drawing on literatures from the political economy of innovation, we argue that, in contrast to value-based pricing, value in health must be considered in the context of both value creation as a collective process amongst multiple public and private actors, as well as value extraction that often occurs due to trends such as financialization.
Furthermore, in building an alternative framework of value, we ask three central questions that present areas for further research and public policy change: (1) What directions can innovation for health take to meet societal needs? (2) How can the divisions of innovative labor be structured to create value? and (3) How can the risks and rewards of innovation be distributed in way that sustains further value creation for health? In sum, this paper demystifies the prevailing narratives that often confound our understanding of value, while proposing alternative questions and pathways for public and private organizations, policy-makers, and civil society to pursue.