This document summarizes Adrian Towse's presentation on multi-indication pricing at HTAi Rome in June 2017. It discusses the benefits of multi-indication pricing in allowing prices to better reflect the relative value of different indications. However, implementation faces challenges from stakeholders with differing perspectives. UK and US workshops provided feedback supporting the concept but noting administrative hurdles. Options for achieving multi-indication pricing include blended pricing, differential rebates, or a combination approach, but require ability to track drug use by indication using data systems.

1. Adrian Towse
Director of the Office of Health Economics
Visiting Professor London School of Economics
HTAi Rome, June 2017
“Multi-indication Pricing: Do we
want it? Can we operationalize it?”

2. HTAi Rome June 2017
Moderator and Panellists
1. Adrian Towse, OHE, UK
2. Ad Schuurman, MEDEV, Netherlands
3. Carole Longson, NICE, UK
4. Simona Montilla, AIFA, Italy
5. Katya Berg, Sanofi, UK
Apologies from Hannah Brühl, G-BA, Germany

3. HTAi Rome June 2017
My remarks
• The case for multi-indication pricing
• Why an increasingly important issue?
• Challenges to implementation
• Perspectives from a UK workshop
• Perspectives from a US workshop
• Options for the way forward

4. HTAi Rome June 2017
A single, uniform, price across indications
has negative consequences
• Single price based on higher-valued indications
• higher than optimal for one or more lower-value
uses/indications, leading to restricted access
• Single price based on lower value indications
• discourage development of further potentially
higher-value indications
• Both consequences are sub-optimal from
society’s point of view
• Multiple indication (or patient sub-group)
pricing increases the numbers of patients
receiving treatment

5. HTAi Rome June 2017
We can illustrate the challenge of differential value
by indication or patient sub-group ….
Source: Hebborn A. Value-based pricing across indications: A company perspective. ISPOR Montreal, 3
June 2014, used in Pearson S, Dreitlein B, Henshall C (2016)

6. HTAi Rome June 2017
Why do we need to do something?
• Over 50 per cent of major cancer medicines marketed in
2014 were for multiple indications
• By 2020, this share is estimated at 75 per cent
• Also relevant for multiple indications in the rare disease
field
• Value is likely to be different across these indications.
• Prices reflecting value means prices differing across
indications
• Separate branding by indication can work but significant
costs attached to this, and still potential for arbitrage
• It would make sense to find a way to implement value
based pricing without the need for separate branding

7. HTAi Rome June 2017
But it is not straightforward for
stakeholders …..
• Higher budget impact for payers if more
patients have access
• Avoid risk of overpaying for follow-on indications
• But EU payers such as France and Italy expect
lower prices for more volume?
• Greater complexity and cost for all parties
• But more patients get access and more indications
get developed
• EHRs and other ICT can reduce cost

8. HTAi Rome June 2017
Feedback from a UK workshop1
OHE workshop 2015
London with UK health
care system
stakeholders to
discuss:
• the pros and cons of
MIP and
• the practicalities of
implementing MIP in
the UK
1.Mestre-Ferrandiz J, Towse A, Dellamano R and Pistollato M. (2015) available at
https://www.ohe.org/publications/multi-indication-pricing-pros-cons-and-applicability-uk

9. HTAi Rome June 2017
Using the Systematic Anti-cancer Therapy
(SACT) dataset

10. HTAi Rome June 2017
Reflections from the Workshop
• General support for relative prices reflecting
relative value, but important that price did not
exceed value in any indication
• If MIP were pursued, there was interest in both
(i) “blended” pricing (at list level) or (ii)
schemes generating variable “net” selling prices
(i.e. differential discounts)
• Can use SACT in oncology to track patients.
What about other disease areas?

11. Indication-specific Pricing of
Pharmaceuticals in the US Health Care
System: 2015 ICER Member Policy Summit:
 White paper available on the ICER
website
http://icer-review.org/material/isp-
white-paper/
 Journal manuscript will be published
shortly in the Journal of Comparative
Effectiveness Research by Pearson,
Dreitlein, Henshall and Towse
Adapted with permission for HATi Rome, June 2017

12. Is Indication-specific Pricing a
Good Idea?
Potential Benefits
 Offers a new mechanism to
facilitate access while
balancing affordability and
sustainability
 Aligns with value-based pricing
and benefit designs
 Supports pricing discussions
for multi-indication drugs
 Potential to save the system
money
 Demonstrates innovation
Potential Risks
 Administrative burden
 May not address affordability
 Conflict with existing pricing
policies (Medicaid Best Price,
340B, and others)
 Payers may not acknowledge
added clinical value
 Risk of “arbitrage”
Adapted with permission for HATi Rome, June 2017

13. Challenges to Implementation
 The US system in complex
 Linking drug price to indication is difficult
 Purchasing price is disconnected from reimbursement price
 Data systems and analytic capabilities may be
insufficient
 Formulary structures may not accommodate placement
of a single drug in multiple tiers for multiple indications
 Regulatory and legal hurdles:
 Medicare Average Sales Price, Medicaid Best Price Rebate
Program, 340B Drug Pricing Program
 Anti-kickback statutes, off-label promotion
Adapted with permission for HATi Rome, June 2017 13

14. Reflections from the 2015 ICER
Policy Summit
 Despite the challenges there was general support for the
potential of indication-specific pricing
 ISP was considered one of many value-based tools that can
be used when the situation is right
 Not all barriers are insurmountable, and improvements in data
infrastructure and policy would help facilitate adoption
 Small pilots with the right business partner are a good way to
start
 ISP requires a consistent method to assess value
 Savings should be passed along to patients in some way
Adapted with permission for HATi Rome, June 2017

15. HTAi Rome June 2017
Options for achieving multi-indication
pricing
• Key is to be able to differentiate use by indication and/or
patient sub-group
• via EHRs, Disease Registries or Treatment tracking
/ administrative databases
• It would be helpful to be able to track outcomes as well
• Multi-indication pricing can be achieved
• via blended pricing
• via differential rebates
• via a combination
We need to do this!

16. Adrian Towse
The Office of Health Economics
Registered address Southside, 7th Floor, 105 Victoria Street,
London SW1E 6QT
Website: www.ohe.org Blog: http://news.ohe.org
Email: atowse@ohe.org
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