What is it about?
A drug is typically given one price per unit (tablet, capsule, vial, etc) but may work better for some conditions than others. Indication-specific pricing modifies the price of a drug according to how well the drug works for different indications. This approach may align with value-based approaches to healthcare, but the US system of drug payment is not constructed to easily accommodate different prices for different uses of the same drug. In this paper we explore the potential of indication-based pricing and suggest policy changes that would support it.
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Why is it important?
This paper provides a review of indication-specific pricing of pharmaceuticals with perspectives from both payers and pharmaceutical manufacturers. Indication-specific pricing is one method of aligning drug price with value. However, challenges exist and this paper can help inform discussions among payers, manufacturers, and policy-makers.
Perspectives
This paper provides a good primer on indication-specific pricing: what it is; why it might be useful; what challenges complicate adoption; and what can be done improve chances of success. It is unique because it is infused with practical insights from a group of healthcare executives representing both the payer perspective and the pharmaceutical innovator perspective. Suggestions for policy changes are provided, but there are things that can be done today to move our healthcare system towards a more value-based approach to paying for pharmaceuticals.
William Dreitlein
Institute for Clinical and Economic Review
Read the Original
This page is a summary of: Indication-specific pricing of pharmaceuticals in the US healthcare system, Journal of Comparative Effectiveness Research, July 2017, Future Medicine,
DOI: 10.2217/cer-2017-0018.
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