Chapter 3.4 explores how pharmaceutical care is financed. Paying for medicines includes how the end-purchase of existing medicines is managed but also the way investment in research and development (R&D) is handled. Key learning includes that

• Pharmaceutical innovation draws on substantial public and private resources.

• – The public sector primarily supports early-stage research, regulates the industry and incentivizes development.

• – The private sector is typically central to development, commercialization, manufacture and marketing. It seeks high profit margins and is not always transparent or responsive to policy priorities.

• Novel and specialized therapeutics as well as population ageing are likely to accelerate medicines expenditures. This requires careful management of pricing and reimbursement.

• Policy-makers can leverage a mix of push and pull strategies to align industry efforts with societal need including through

• – Clear communication of health system priorities

• – Transparent incentive and pricing systems and measures to enhance R&D efficiency

• – Payment mechanisms that foster equity and sustainability

• – Cross-country collaboration including on preparedness, procurement and pricing transparency.