Intellectual Property Rights and Value-Based Pricing

Patents let pharmaceutical firms price new therapeutics largely free from competitive constraint. Outside the U.S., value-based pricing (VBP) ties market access and price to evidence of therapeutic benefit or cost-effectiveness after regulatory approval. This paper examines what VBP does to pharmaceutical market value: how much the owner can capture, which R&D directions get funded, and whether an unfavorable decision destroys or merely delays value realization. We compare structurally different VBP models: Germany's added health benefit system and England's cost-effectiveness threshold. We test their effect on market value using stock market reactions to reimbursement decisions for publicly listed firms, 2000-2025. Neither favorable nor unfavorable VBP decisions move stock prices in either country: investors do not treat them as newinformationaboutfirmvalue. Thenull result implies how little VBP threatens the incentive to innovate, and how firms and policymakers should weigh reimbursement risk against patent-driven return expectations.

Blankart, Katharina, Paul Peters und Simon Reif (2026), Intellectual Property Rights and Value-Based Pricing, ZEW Discussion Paper Nr. 26-047, Mannheim.