Balancing Innovation and Access: Insights from AIM’s Fair Pricing Model and Its Current and Future Applications

Objective: Access to affordable medicines is a cornerstone of equitable healthcare, yet escalating drug prices increasingly strain national healthcare systems. Cost-based pricing can be a useful complement to value-based pricing, provided that relevant variables are considered. Methods: We applied the International Association of Mutual Benefit Societies (AIM) Fair Pricing Model to ten market-protected medicines authorized by the European Medicines Agency between 2015 and 2018, covering oncology, rare diseases, and chronic conditions. Analyses were conducted across six European countries—Belgium, Estonia, Germany, the Netherlands, Slovenia, and Switzerland—to assess discrepancies between calculated fair prices and actual market prices. Fair prices were calculated using a standardized research and development (R&D) lump sum of €800 million per medicine with sensitivity analyses at €250 million and €2.5 billion. Fair prices were compared with 2020 list prices, and where available, estimated net prices. Potential budgetary savings were estimated by deriving a weighted reduction percentage from the expenditure gap between actual prices and fair prices and applying this to national spending on newly marketed medicines. Results: The analysis demonstrated that fair prices were up to 97% lower than list prices, and on average, 53% lower. When confidential discounts were considered, fair prices remained on average 33% below net prices. Applying fair prices to the ten selected medicines resulted in an average weighted reduction of 77% in gross expenditures and 73% in net expenditures of the six participating countries. When extrapolated to the European level, this corresponds to potential annual net savings of €27 billion for new medicines. Conclusions: These findings align with previous studies in Germany and Belgium, which reported potential savings of more than €13 billion and €1 billion, respectively (with R&D costs of €250 million). Currently, the model supports price negotiations of Dutch insurers and is being integrated into the Horizon Europe funded project ASCERTAIN. Overall, AIM’s model offers a useful framework for both innovative and repurposed medicines, improving transparency and fairness in pricing. Current prices paid for new medicines are not justified by the underlying costs of research or their therapeutic value. Therefore, applying this model can generate substantial savings for European health systems.