Consider, a definition of value: Worth in usefulness or importance to the possessor; utility or merit: as in, the value of an education.

Hey Mr. Webster, how about, “the value of health?”

This week, the ground beneath Philadelphia and Research Triangle Park moved as the announcement of Andrew Witty’s nomination to the post of CEO of GlaxoSmithKline shook the headquarter offices of the second biggest pharmaceutical company in the world. Among his American colleagues, Witty was generally not considered to be the front-runner in the triple-threat horse race launched by J-P Garnier, current honcho, to head the company.

Among the 3 contenders for the top job, though, Witty has a key competence the other 2 American-based executives do not: invaluable experience working with the drug price-regulated markets in Europe and, at the same time, turning a profit. Witty openly talks the talk about the value of medicines. He’s also not adverse to the concept of risk-sharing and charging less for me-too drugs while pricing the truly innovative stuff at a premium. Such value-based pricing would be walking the talk.

Now, let’s shift geographic gears and shine the spotlight over China: as $12 billion of drugs have lost patent protection this year, another $20 billion will lose protection in 2008. This summer, a small Chinese generics manufacturer received permission from the FDA to make and export a drug that treats AIDS. This was the first time a Chinese company got approval to send a finished pill to the United States.

Expect more Chinese generics makers to export meds to the US, even in the midst of greater scrutiny on safety over the country’s exported toys, food and toothpaste. The country is the #1 producer of raw materials for prescription drugs. China is already the source for 85% of the vitamin C that Americans consume.

How do we value, value? If the pharmacoeconomic equation doesn’t encompass health outcomes, safety and quality, it’s not delivering value. In this post-Vioxx, post-deadly-pet food, post-pink-box-toy environment, cheap does not necessarily equal good value. Think Target, not dollar store, when it comes to pharma and value. I am hopeful that Witty will bring that sense to the pharma landscape.

Health Populi’s Hot Points: Getting the true sense of value into the pharmaceutical equation is sensible and necessary. The next generation of pharmaceutical products must truly innovate, and deliver outcomes packaged up in a culture of safety. The lack of innovation in pharma isn’t good news for anyone…including generics companies, who depend on having new drugs to copy.