PCP1 - COMPARISON OF THE GERMAN MIXED PRICE MODEL AND INDICATION-SPECIFIC PRICING FOR MULTI-INDICATION PRODUCTS IN ONCOLOGY

Abstract

Since 2011, price setting for new (indications of) pharmaceuticals in the German market is regulated by the Act on the Reform of the Market for Medicinal Products (AMNOG). Following early benefit assessment by the Federal Joint Committee (G-BA), prices are negotiated between pharmaceutical manufacturer and the National Association of Statutory Health Insurance Funds (GKV-SV). During their life cycle, (oncological) products frequently receive marketing authorizations for several indications with varying outcomes in early benefit assessment. In the subsequent price negotiation, an indication-specific price is negotiated for every new indication and a mixed price valid for all approved indications is then calculated from the indication-specific prices weighted by the volume per indication as stated in the G-BA decision. However, it has not been analysed whether the weights of the indications used to calculate the mixed price correspond to the shares in the prescription volume of the product in clinical practice. Consequently, it is unclear whether the mixed price model adequately reflects the mean additional benefit of a product and how this would compare to an indication-specific pricing model. The aim of this study is to compare the current mixed price model in Germany to a hypothetical indication-specific pricing model based on selected multi-indication products in oncology. Indication-specific prices were estimated from the evolution of the mixed price after price negotiation for the respective indication and the volume per indication as stated in the G-BA decision. The weights of the indications used to calculate the mixed price were then compared to the shares in the prescription volume of the product in clinical practice. Finally, total revenues for indication-specific pricing were estimated from indication-specific prices and actual indications-specific volumes. This case study provides a first quantitative comparison of the current mixed price model to an indication-specific pricing model for multi-indication products in oncology.