Evaluating the Impact of International Drug Pricing Strategies on Indian State-Level
Author(s)
Akanksha Sharma, MSc, Rashi Rani, MSc, Neha Tripathi, MPH, Shubhram Pandey, MSc.
Heorlytics Private Limited, Mohali, India.
Heorlytics Private Limited, Mohali, India.
OBJECTIVES: This analysis aims to assess the impact of country specific drug pricing policies, such as Cost-Plus (India), Full Transparency (UK), Negotiated Pricing (US), and Reference Pricing (EU), on drug prices and affordability using a simulated dataset across Indian states aiming to understand pricing transparency and regulatory strength. The goal was to evaluate how these global frameworks influence pricing variation, transparency, and regulatory strength within a localized Indian context.
METHODS: A simulation study was conducted using 1200 observations across artificial Indian states, incorporating six distinct drug pricing policies. Each drug price was generated using a randomized base price (Mean = $100, SD = $15), modified by policy specific multipliers reflecting real-world pricing logic. The affordability gap was estimated through the price-to-income ratios of the various income groups. Evaluation processes included summary statistics, visualizations, and linear regression models to demonstrate the policy's effect on price and the affordability gap.
RESULTS: Simulated drug costs ranged from $67.6 under the Cost-Plus model to $112.0 in the absence of pricing transparency. Regression analysis confirmed a strong association between pricing policies and drug costs, with each policy-specific multiplier showing statistically significant effects (Adjusted R2 = 0.524, p<0.001). No transparency was found to be a price-raiser, with a difference of $42.5 compared to Cost Plus. The proportion of affordability gaps was also similar, with the least in the Cost-Plus (median = 0.455), and the highest in No Transparency (0.668), and policy explaining a small yet relevant proportion of variance (Adjusted R2 = 0.07, p<0.001).
CONCLUSIONS: Drug pricing policies play a pivotal role in shaping both the cost and affordability of medicines. Strong regulatory control, like cost-plus pricing in India, can reduce drug prices and narrow the affordability gap. All support a transparent, evidence-based pricing structure for fair drug access.
METHODS: A simulation study was conducted using 1200 observations across artificial Indian states, incorporating six distinct drug pricing policies. Each drug price was generated using a randomized base price (Mean = $100, SD = $15), modified by policy specific multipliers reflecting real-world pricing logic. The affordability gap was estimated through the price-to-income ratios of the various income groups. Evaluation processes included summary statistics, visualizations, and linear regression models to demonstrate the policy's effect on price and the affordability gap.
RESULTS: Simulated drug costs ranged from $67.6 under the Cost-Plus model to $112.0 in the absence of pricing transparency. Regression analysis confirmed a strong association between pricing policies and drug costs, with each policy-specific multiplier showing statistically significant effects (Adjusted R2 = 0.524, p<0.001). No transparency was found to be a price-raiser, with a difference of $42.5 compared to Cost Plus. The proportion of affordability gaps was also similar, with the least in the Cost-Plus (median = 0.455), and the highest in No Transparency (0.668), and policy explaining a small yet relevant proportion of variance (Adjusted R2 = 0.07, p<0.001).
CONCLUSIONS: Drug pricing policies play a pivotal role in shaping both the cost and affordability of medicines. Strong regulatory control, like cost-plus pricing in India, can reduce drug prices and narrow the affordability gap. All support a transparent, evidence-based pricing structure for fair drug access.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
MSR94
Topic
Economic Evaluation, Health Technology Assessment, Methodological & Statistical Research
Disease
No Additional Disease & Conditions/Specialized Treatment Areas