Can pharma persuade payers of the benefits of indication-level pricing?
Advocates argue that indication-level pricing can bring new products on stream and results in wider patient access to new therapies. That's a good thing, right? Maybe, but for indication-level pricing to work payers would have to overcome a range of practical and costly administrative, data collection and regulatory obstacles. There is also the perennial payers' suspicion that profit underlies pharma's enthusiasm. Pharma wants optimum price, payers want value and patients need access–but is indication-level pricing a model that is ever likely to deliver at pace and scale, and what can pharma do now to progress the argument for indication-level pricing with payers?
Understanding in detail what payers see as the main issues and areas of objection is critical. That is why, in Indication-level Pricing: Payer insights, we interviewed experienced payers from the US and Europe to help you evaluate where–and how–pharma can act.
Payers explore indication-level pricing challenges
- What are the problems caused by having a single price for a multi-indication drug?
- Different brand names or delivery/dosage forms? Discounts by indication? Outcomes-based payments? What models find traction with payers and what are their objections?
- How should the value be determined for indication-level pricing?
- What are the data challenges for implementing indication-level pricing and how can they be overcome?
- What are the contractual and financial flows challenges for implementing indication-level pricing?
- How could misuse of indication-level pricing be overcome?
What to expect
- A detailed report revealing payer attitudes to indication-level pricing and how pharma can respond
- An examination of 16 key issues that pharma needs to understand and respond to
- 20 targeted questions put to payers
- Their perceptive responses that provided 46 insights supported by 109 direct quotes
What is indication-level pricing and why is it a problem for payers?
The number of drugs coming to market with more than one indication is increasing, and their value can differ markedly across those indications. A challenge for securing reimbursement can come for companies when they have to operate with a single price regardless of indication. Where the single price is for the higher-value indication, reimbursement agencies may not recommend use for the lower-value indications with the result that patients won't have access for that indication. Where the single price is for a lower-value indication, companies will be dis-incentivised from developing higher-value indications. Most countries have a unique price, set at launch, and payers make a yes or no decision for each new indication. Pharma want price to reflect value but is indication-level pricing the model that will deliver?
- Chief Clinical Officer at a health insurance plan, in the US
- Former Chief Medical Officer at a pharmacy benefit management company (PBM) in the US
- Commissioning Pharmacist at a National Health Service (NHS) commissioning organisation, UK
- Former Director with responsibilities for drug portfolio management and innovative contracting arrangements at a hospital, Spain
- Medical Director at a health insurance company, US
- Former Senior Post at the National Association of Statutory Health Insurance Funds and current Advisor for the Arzneimittelmarket-Neuordnungsgesetz (AMNOG) or assessment of new pharmaceuticals process in Germany
- Member of staff at a PBM in the US