OBJECTIVES

Value-based pricing has proven to be particularly complex for multi-indication products, especially, when the value differs between indications. Within the German AMNOG context, the negotiation of a mixed-price that weights different values of a drug with arbitrarily defined factors is necessary. However, due to mixed-price considerations, label extensions may have negative price effects when follow-up indications are evaluated negatively. We investigate the extent of these negative price effects in Germany. Furthermore, we discuss the relevance of optimized multi-indication pricing in general and the feasibility of pricing alternatives.

METHODS

: We analyzed all AMNOG assessment and pricing results for multi-indication products between 2011 and the end of 2019. Descriptive statistics on the evaluation and pricing results are presented. For differences in mean values, two-sided t-tests for independent samples (with a=0.05) were calculated. Linear OLS models were performed to examine the influence of various factors on the price development after label extension.

RESULTS

: On average, a higher price reduction was observed after the first labeled indication (mean: 18.8%) compared to the label extension (mean additional rebate: 5.7%). The relative price decrease is comparable across all possible pricing constellations (premium/mixed/comparative). Regardless of the price constellation, we identified four clusters of possible price development after label extension. Within one cluster, the rebate after label Extension was ≥100% of the rebate after the first indication (23% of all multi-indication products). Among all potential influencing factors, the rebate after initial assessment showed the strongest influence on the rebate after label extension.

CONCLUSIONS

: On average, label extensions have no negative price effects in Germany. Yet, there are some constellations with disproportionately high rebates after label extension. In order to maintain a high price level, a waiver model is currently being discussed. However, we show that this is not the most efficient option, neither from social nor manufacturers’ perspective.