Value-based indication-specific pricing and weighted-average pricing: estimated price and cost savings for cancer drugs
Objectives For US Medicare and Medicaid, single drug prices do not reflect the value of supplemental indications. Value-based indication-specific and weighted-average pricing has been suggested for drugs with multiple indications. Under indication-specific pricing, a distinct price is assigned to th...
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| Main Authors: | , |
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| Format: | Article (Journal) |
| Language: | English |
| Published: |
April 2025
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| In: |
PharmacoEconomics
Year: 2025, Volume: 43, Issue: 4, Pages: 415-427 |
| ISSN: | 1179-2027 |
| DOI: | 10.1007/s40273-024-01448-x |
| Online Access: | Verlag, kostenfrei, Volltext: https://doi.org/10.1007/s40273-024-01448-x Verlag, kostenfrei, Volltext: http://link.springer.com/article/10.1007/s40273-024-01448-x 
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| Author Notes: | Daniel Tobias Michaeli, Thomas Michaeli |
| Summary: | Objectives For US Medicare and Medicaid, single drug prices do not reflect the value of supplemental indications. Value-based indication-specific and weighted-average pricing has been suggested for drugs with multiple indications. Under indication-specific pricing, a distinct price is assigned to the differential value a drug offers in each indication. Under weighted-average pricing, a single drug price is calculated that reflects the value and/or volume of each indication. This study estimates price reductions and cost savings for cancer drugs under value-based indication-specific pricing and weighted-average pricing. Methods We collected data on US Food and Drug Administration (FDA)-approved cancer drugs and indications (2003-2020) from FDA labels, the Global Burden of Disease study, clinicaltrials.gov, and Medicare and Medicaid. A multivariable regression analysis, informed by characteristics of original indications, was used to predict value-based indication-specific prices for supplemental indications. These indication-specific prices were combined with each indication’s prevalence data to estimate value-based weighted-average prices and potential cost savings under each policy. Results We identified 123 cancer drugs with 308 indications. Medicare and Medicaid spent a total of $28.2 billion on these drugs in 2020. Adopting value-based indication-specific pricing would increase drug prices by an average of 3.9%, with cost savings of $3.0 billion (10.6%). However, 43.7% higher prices for ultra-rare diseases would increase spending by 16.8% ($44 million). Adopting value-based weighted-average pricing would reduce prices by an average of 4.6% and spending by $3.0 billion (10.6%). Under weighted-average pricing, prices for and spending on ultra-rare diseases would be reduced by 22.6% and $55 million, respectively. Conclusions Value-based indication-specific and weighted-average pricing could help to align the value and price of new indications, thereby reducing expenditure on drugs with multiple indications. |
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| Item Description: | Online veröffentlicht: 30. Dezember 2024 Gesehen am 24.03.2025 |
| Physical Description: | Online Resource |
| ISSN: | 1179-2027 |
| DOI: | 10.1007/s40273-024-01448-x |