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Multi-Indication Pricing: Nice in Theory but Can it Work in Practice?

Author

Listed:
  • Jorge Mestre-Ferrandiz

    (Independent Economics Consultant)

  • Néboa Zozaya

    (Weber Economía y Salud)

  • Bleric Alcalá

    (Weber Economía y Salud)

  • Álvaro Hidalgo-Vega

    (Fundación Weber, Majadahonda
    Universidad de Castilla-La Mancha, Campus de Toledo)

Abstract

For medicines with different valued indications (uses), multi-indication pricing implies charging different prices for different uses. In this article, we assess how multi-indication pricing could help achieve overall strategic objectives of pricing controls, summarise its advantages and disadvantages (vs. uniform pricing) and estimate the hypothetical impact on prices of moving towards multi-indication pricing for specific oncologic medicines in Spain. International experience shows that multi-indication pricing can be implemented in real practice, and indeed a few initiatives are currently in use, albeit mostly applied indirectly through confidential pricing agreements that offer a way to discriminate prices across countries without altering list prices. However, some more sophisticated systems are in place in Italy, and more recently in Spain, where the objective is to monitor usage per patient/indication, and ultimately pay for outcomes. Based on the existing experience, we also outline six conditions required for multi-indication pricing. Multi-indication pricing is a useful tool to determine the relative prices of a drug for multiple (different-valued) indications, but by itself will not offer the ‘solution’ to what the absolute price should be. That will be driven, among other things, by cost-effectiveness thresholds, if they exist. Overall, we argue multi-indication pricing is nice in theory and it could work in practice, although changes in the manner in which medicines are priced, procured and monitored in clinical practice need to be applied.

Suggested Citation

  • Jorge Mestre-Ferrandiz & Néboa Zozaya & Bleric Alcalá & Álvaro Hidalgo-Vega, 2018. "Multi-Indication Pricing: Nice in Theory but Can it Work in Practice?," PharmacoEconomics, Springer, vol. 36(12), pages 1407-1420, December.
    • Handle: RePEc:spr:pharme:v:36:y:2018:i:12:d:10.1007_s40273-018-0716-4
    DOI: 10.1007/s40273-018-0716-4
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    References listed on IDEAS

    as
    1. Valérie Paris & Annalisa Belloni, 2013. "Value in Pharmaceutical Pricing," OECD Health Working Papers 63, OECD Publishing.
    2. Patricia M. Danzon, 2018. "Differential Pricing of Pharmaceuticals: Theory, Evidence and Emerging Issues," PharmacoEconomics, Springer, vol. 36(12), pages 1395-1405, December.
    3. Jorge Mestre-Ferrandiz;Renato Dellamano;Michele Pistollato;Adrian Towse, 2015. "Multi-indication Pricing: Pros, Cons and Applicability to the UK," Seminar Briefing 001653, Office of Health Economics.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. So-Young Ha & Dong-Won Kang & Hye-In Jung & Eui-Kyung Lee & Mi-Hai Park, 2022. "Value-Based Pricing and Budget Impact Analysis for Multi-Indication Drugs: A Case Study of Immunotherapies," IJERPH, MDPI, vol. 19(7), pages 1-10, March.
    2. Brekke, Kurt R. & Dalen, Dag Morten & Straume, Odd Rune, 2025. "Competition matters: uniform vs. indication-based pricing of pharmaceuticals," Discussion Paper Series in Economics 1/2025, Norwegian School of Economics, Department of Economics.
    3. Juan Llano & Jorge Mestre-Ferrandiz & Jaime Espin & Jordi Gol-Montserrat & Alicia Llano & Carlos Bringas, 2022. "Public health policies for the common interest: rethinking EU states’ incentives strategies when a pandemic reshuffles all interests," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 23(3), pages 329-335, April.

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