Should drug prices differ by indication?

Indication-specific drug pricing, while simple in theory, can be complex in reality. As multiple indications become the norm, varying drug prices by indication will become an important price-management strategy.

While no European country has officially implemented Indication-Based Pricing (IBP), the basic concept of 'indication-based management' has been around awhile. US healthcare company CVS Health has implemented indication-specific pricing and rebate negotiations with pharmaceutical manufacturers since 2017. The insurer has announced indication-specific pricing arrangements for hepatitis C as well as a new indication-based formulary for autoimmune conditions.

This OHE Consulting report, funded by AstraZeneca, provides a summary and discuss from a consultation survey across sixteen countries represented by 73 validated responses. The paper reviews the potential benefits and drawbacks, and presents forward thinking on the implementation of indication-based pricing. 

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