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Value-Based Pricing and Budget Impact Analysis for Multi-Indication Drugs: A Case Study of Immunotherapies

Author

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  • So-Young Ha

    (School of Pharmacy, Sungkyunkwan University, Suwon 16419, Korea
    These authors contributed equally to this work.)

  • Dong-Won Kang

    (School of Pharmacy, Sungkyunkwan University, Suwon 16419, Korea
    These authors contributed equally to this work.)

  • Hye-In Jung

    (School of Pharmacy, Sungkyunkwan University, Suwon 16419, Korea)

  • Eui-Kyung Lee

    (School of Pharmacy, Sungkyunkwan University, Suwon 16419, Korea)

  • Mi-Hai Park

    (School of Pharmacy, Sungkyunkwan University, Suwon 16419, Korea)

Abstract

We aimed to calculate the value-based price of each indication and compare the drug price and budget impact among value-based pricing (VBP) scenarios, using immunotherapy as a case. Atezolizumab, nivolumab, and pembrolizumab prices were estimated for VBP scenarios, namely indication value-based pricing (IBP), IBP with refund, and weighted-average pricing (WAP). To estimate the value-based price of each indication, cost-effectiveness analyses were conducted by setting the incremental cost-effectiveness ratio of the first reimbursed indication to the threshold. The budget impact for each scenario was compared with that of the pricing system in Korea (which has a 4.75% price reduction). The value-based prices of non-reimbursed indications were lower for atezolizumab and higher for nivolumab than those for the reimbursed indication. The drug price fluctuations were the largest in IBP, varying between 28.56–328.81% of the current list price. The net price of the non-reimbursed indications decreased from 0% to 71.44% in IBP with refund, and the budget impact was the lowest among VBPs. Although the fluctuation in the budget impact in WAP was smaller than IBP, higher drug prices were identified for low-value indications. In conclusion, IBP with refund is a viable method for multi-indication drugs, because it has minimal drug price and budget impact changes.

Suggested Citation

  • 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.
    • Handle: RePEc:gam:jijerp:v:19:y:2022:i:7:p:4105-:d:783354
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    References listed on IDEAS

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    1. Rosella Levaggi & Paolo Pertile, 2020. "Value-Based Pricing Alternatives for Personalised Drugs: Implications of Asymmetric Information and Competition," Applied Health Economics and Health Policy, Springer, vol. 18(3), pages 357-362, June.
    2. Yinghui Wei & Patrick Royston, 2017. "Reconstructing time-to-event data from published Kaplan–Meier curves," Stata Journal, StataCorp LP, vol. 17(4), pages 786-802, December.
    3. 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.
    4. Helen O’Donnell & Laura McCullagh & Michael Barry & Cathal Walsh, 2020. "The Interaction between Price Negotiations and Heterogeneity: Implications for Economic Evaluations," Medical Decision Making, , vol. 40(2), pages 144-155, February.
    Full references (including those not matched with items on IDEAS)

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