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Blueprints for Indication-Specific Pricing

Several approaches that rewire existing reimbursement conventions as alternatives to facilitate ISP are proposed.
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Originally published on 05/19/2020 Drug Pricing Lab

Interest in value-based pricing has increased in recent years as an analytic alternative to current pricing methods that are distorted by financial incentives across the industry and supply chain. Developing such a pricing model, however, is very complex, in part because many drugs can have different benefit profiles in different conditions.

Indication-specific pricing (ISP) is being tested by ExpressScripts and CVS Caremark to manage certain drugs according to price relative to indication-specific value. While promising, ISP requires mechanisms to reimburse by indication, which are currently hampered by the complexities of drug purchasing and delivery.

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