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Open Access 16-01-2024 | Original Research Article

From Indication-Based Pricing to Blended Approach: Evidence on the Price and Reimbursement Negotiation in Italy

Authors: Elvio Emanuele Rossini, Carlotta Galeone, Chiara Lucchetti, Claudio Jommi

Published in: PharmacoEconomics - Open | Issue 2/2024

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Abstract

Background

New indications for existing medicines are increasing over time. In most countries, drug pricing and reimbursement conditions are renegotiated every time a new indication is approved. There is a growing interest in the price negotiation model for new indications, specifically comparing an indication-based versus blended approach. However, little evidence currently exists regarding the complexity of these negotiations and their impact on actual prices. Italy has recently transitioned from an indication-based approach to a blended price model. This study aims to measure the impact of price and reimbursement negotiation of new indications on discounts (i.e. actual prices) and on the negotiation duration, used as a proxy of its complexity.

Methods

We considered new indications approved through a European centralized procedure from January 2013 to March 2022 for which the price and reimbursement status was approved in Italy between January 2015 and March 2022, amounting to 52 new indications. Data on the timeframe of the Italian price and reimbursement process and its phases were obtained from publicly available sources. Discounts for the first indication and their subsequent increases for new indications were estimated by comparing ex-factory prices and tendered prices. To calculate p-values, we employed the Mann–Whitney test, and multiple regression models were utilized to examine correlations between negotiation time and the characteristics of the medicines.

Results

The mean time to reimbursement was 603 days, in contrast to 583 days for the first launch. Price negotiation took longer for rare diseases, cancer drugs, and in case of therapies with minor added therapeutic value. On average, the additional discount (on top of discounts for prior indications) was 13%, significantly lower than the mean discount for the first indications approved (24.9%). The discounts increment was lower, but negotiation took longer if a Managed Entry Agreement accompanied the final agreement. Additionally, discounts have increased over the years.

Conclusion

The negotiation for new indications takes longer than the first one, and provides, on average, an additional discount of 13%. While our findings bear the potential for significant policy implications, they necessitate prudent interpretation due to a limited number of observations. The increasing trend in additional discounts over time applied to all indications in recent negotiations, may suggest a descending trend of value for new indications and a shift from an indication-based pricing approach to a blended model. Otherwise, budget impact considerations might have outweighed a value-based approach in the recent negotiations. If so, two potential options for restoring a value-based approach are returning to an indication-based pricing or giving explicit and higher weight to value within a blended model.
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Metadata
Title
From Indication-Based Pricing to Blended Approach: Evidence on the Price and Reimbursement Negotiation in Italy
Authors
Elvio Emanuele Rossini
Carlotta Galeone
Chiara Lucchetti
Claudio Jommi
Publication date
16-01-2024
Publisher
Springer International Publishing
Published in
PharmacoEconomics - Open / Issue 2/2024
Print ISSN: 2509-4262
Electronic ISSN: 2509-4254
DOI
https://doi.org/10.1007/s41669-023-00467-2

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