Estimating the overall population health effects of uniform pricing, indication-based pricing, and alternative commercial arrangements for new pharmaceuticals in the UK NHS

There has been much debate internationally about the merits of moving from a uniform price across uses of a new pharmaceutical to a price for each use of the product, i.e., indication-based pricing (IBP). This is a key issue for cancer drugs where the number of products with licenses for multiple indications is increasing.

IBP offers the potential to improve access to medicines, and innovation, but is also expected to increase pharmaceutical expenditure with associated health opportunity costs.

Aims

This project aims to provide new research to understand how alternative models for pricing multi-indication drugs could influence patient outcomes and health care expenditure. It also seeks to understand how different pricing policies can be appropriately operationalised within the UK NHS.

Methods

We simulate the effects of each policy through a series of numeric examples using different product value profiles i.e., the pattern of QALY gains and patient population sizes across indications, and scenarios that reflect features of the pricing landscape and medicines market. Unless otherwise stated, uniform pricing and IBP are implemented with an approval norm of £30,000/QALY for all indications, and commercial flexibility is implemented with an approval norm of £30,000/QALY for the uniform pricing policy component and £20,000/QALY for indications requiring commercial flexibility, to reflect current policy.