How Innovations, Payment Models Seek to Tie Drug Pricing to Patient Outcomes

April 2017

By Bill Bithoney

Rising pharmaceutical prices are weighing on the bottom lines of providers, payers and pharma companies—and patients’ wallets. To understand drug efficacy across large patient populations and improve pricing models, some healthcare industry players are leveraging new and innovative tools and pricing techniques. The goal? To better our understanding of the value of certain high-cost drugs and set reasonable outcomes expectations for patients.

Along with determining the value of certain drugs based on how many lives they save, healthcare leaders will determine value based on a more fine-tuned approach called QALY, or quality-adjusted-life-years. This addresses the cost of medications per year of life saved, as well as the quality of the lives of those treated with the medication.

In a recent Q&A with HFMA’s CFO Forum, I discuss this and other issues related to drug pricing, including steps providers, health plans and other industry stakeholders are exploring to address the challenges patients face paying for costly—but potentially life-saving—prescription drugs, including new research tools and frameworks to evaluate their costs, benefits and side effects.

To read more of these insights, download the full Q&A here

Bill Bithoney is the chief physician executive and managing director in The BDO Center for Healthcare Excellence & Innovation leading clinical strategy. He can be reached at

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Return to BDO Life Sciences Letter - Spring 2017