OnCo
ideasIdea

Pay a different price for the same cancer drug depending on the indication

One immunotherapy may add years of life in one cancer and weeks in another, yet costs the same. Prices should track the benefit in each use.

Multi-indication oncology drugs are priced at a single level, so payers either overpay for low-value indications or refuse them entirely. Indication-based pricing has been implemented through Italy's AIFA web-based registries and, in effect, through confidential indication-level rebates in some markets; the barrier elsewhere is that claims do not reliably record the indication. The proposal is mandatory indication coding at dispensing (linking the diagnosis code and line of therapy to the drug claim) and indication-level net prices set from value frameworks such as ESMO-MCBS or ICER thresholds.

Hypothesis
Indication-specific pricing increases the number of reimbursed indications per multi-indication oncology drug and reduces average spend per quality-adjusted life year gained by at least 20% compared with uniform pricing.
Rationale
Value-based pricing is meaningless if value varies fivefold across uses and the price does not. Indication coding is a data problem that electronic prescribing has largely solved.
What would test it
Implement indication coding in one national or large regional payer for checkpoint inhibitors and PARP inhibitors, negotiate indication-level prices for two years, and compare reimbursed indications and spend per QALY with the prior period.
Maturity
early clinical
Who has to act
payer
Cost to try
Small (under $1M)
Years to first evidence
3
Bottlenecks it attacks
  • Prices and value · New cancer drugs routinely cost over $150,000 a year, often for months of benefit. Systems cannot afford them and patients go bankrupt.

Connected

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