Value-Based Pricing and Budget Impact Analysis for Multi-Indication Drugs: A Case Study of Oncology Medications
Author(s)
Ahmed Mehdi Baida, PharmD1, Sami Mekrache, PharmD2, Yamina BENELFOUL, PharmD3, NEWFEL OULMANE, Sr., MBA, PharmD4.
1Département de Pharmacie, Faculté de Pharmacie d’Alger, Algiers, Algeria, 2Université d'Alger – Faculté de Pharmacie, alger, Algeria, 3Université d'Alger – Faculté de Pharmacie, Algiers, Algeria, 4Access Focus, Staoueli, Algeria.
1Département de Pharmacie, Faculté de Pharmacie d’Alger, Algiers, Algeria, 2Université d'Alger – Faculté de Pharmacie, alger, Algeria, 3Université d'Alger – Faculté de Pharmacie, Algiers, Algeria, 4Access Focus, Staoueli, Algeria.
OBJECTIVES: To assess and compare value-based pricing (VBP) strategies applied to oncology drugs with multiple indications, focusing on their impact on cost-effectiveness and budget.
METHODS: Three multi-indication oncology drugs, Olaparib, Cabozantinib, and Osimertinib, were selected. A cost-effectiveness analysis was performed for each approved indication using incremental cost-effectiveness ratios (ICERs). Pricing was then adjusted according to three strategies: Indication-Based Pricing (IBP), IBP with refunds, and Weighted Average Pricing (WAP). A budget impact analysis was conducted for each approach to evaluate economic feasibility.
RESULTS: For Olaparib, ICERs for the second and third indications were 1.8 and 4.1 times higher than for the first. Cabozantinib’s first indication had an ICER 0.8 times that of the second; the third was 1.5 times higher than the second. Osimertinib’s second indication had an ICER 1.8 times higher than the first. IBP with refunds minimized budget impact by lowering costs for low-value indications without disproportionately increasing costs for high-value ones.
CONCLUSIONS: IBP with refunds appears to be the most efficient strategy when risk-sharing agreements are in place, as it balances value alignment with financial sustainability. In settings without such agreements, traditional IBP remains a pragmatic alternative to improve access to less cost-effective indications by using value-based thresholds as reimbursement benchmarks, enhancing affordability while maintaining overall budget control.
METHODS: Three multi-indication oncology drugs, Olaparib, Cabozantinib, and Osimertinib, were selected. A cost-effectiveness analysis was performed for each approved indication using incremental cost-effectiveness ratios (ICERs). Pricing was then adjusted according to three strategies: Indication-Based Pricing (IBP), IBP with refunds, and Weighted Average Pricing (WAP). A budget impact analysis was conducted for each approach to evaluate economic feasibility.
RESULTS: For Olaparib, ICERs for the second and third indications were 1.8 and 4.1 times higher than for the first. Cabozantinib’s first indication had an ICER 0.8 times that of the second; the third was 1.5 times higher than the second. Osimertinib’s second indication had an ICER 1.8 times higher than the first. IBP with refunds minimized budget impact by lowering costs for low-value indications without disproportionately increasing costs for high-value ones.
CONCLUSIONS: IBP with refunds appears to be the most efficient strategy when risk-sharing agreements are in place, as it balances value alignment with financial sustainability. In settings without such agreements, traditional IBP remains a pragmatic alternative to improve access to less cost-effective indications by using value-based thresholds as reimbursement benchmarks, enhancing affordability while maintaining overall budget control.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
EE749
Topic
Economic Evaluation
Topic Subcategory
Budget Impact Analysis, Cost/Cost of Illness/Resource Use Studies
Disease
Oncology