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Indication-Specific Pricing Of Pharmaceuticals In The United States Health Care System: An ICER White Paper


The Institute for Clinical and Economic Review (ICER) held a Policy Summit on December 9 – 11, 2015 with 44 health care leaders from the 22 payer and life sciences organizations that comprise the ICER membership group. The purpose of the meeting was to explore the potential value of indication-specific pricing (ISP) of pharmaceuticals for both payers and life science companies and to discuss prospects for its implementation in the US health care system.

ISP involves setting different prices for different indications or for distinct patient subpopulations eligible for treatment with a medication. The relative clinical benefit of a drug can vary widely between different indications or between different subpopulations within the same indication. However, despite different clinical benefit across indications, the reimbursement system in the United States, rooted in a history of pricing by dosing unit, assigns a single uniform price to a drug, no matter how it is used.

As a result, price and clinical value do not necessarily align well across multiple indications. With multi-indication drugs on the rise, it is important for payers and manufacturers to consider the options through which pricing can better reflect differential benefit by indication.


The 2015 ICER Policy Summit convened an influential group of evidence policy leaders from insurers, pharmacy benefit management firms, and life science companies to discuss indication-specific pricing (ISP) of biopharmaceuticals and to explore the opportunities and challenges of ISP in the US health care system. Held from December 9-11, 2015 the Policy Summit brought together 44 health care leaders from 22 payer and life sciences organizations.

ICER staff developed a background paper on ISP prior to the meeting to provide participants with a common foundation in some of the key conceptual and practical issues. To create an environment of frank, open discussion the Summit was held under the “Chatham House Rule” whereby participants are able to share comments and perspectives heard at the meeting, but commit to not identifying the person or organization making the statement.

The analysis included Payer Organizations like Aetna, Association of Health Insurance Plans, Anthem, Blue Shield of California, CVS Caremark, Express Scripts, Harvard Pilgrim Healthcare, Kaiser Permanente, OmedaRx, Premera, United Healthcare and Life Sciences Organizations: AstraZeneca, Bristol Myers-Squibb, Eli Lilly, Genentech, GlaxoSmithKline, Johnson & Johnson, Merck, National Pharmaceutical Council, Novartis, Pfizer as well as Takeda.

Download '.pdf' Format of the whitepaper.

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