More Prices, More Problems: Challenging Indication-Specific Pricing as a Solution to Prescription Drug Spending in the United States

Abstract

In the United States, high prices of prescription drugs and rapidly increasing prescription drug spending have caused public outrage and calls for action. There is bipartisan acknowledgement of the problem by lawmakers, but no agreement on how to fix it. Value-based pricing models have gained increasing support and have been suggested as one possible solution to controlling prescription drug spending. One proposed value-based pricing model is indication-specific pricing: linking the price of a multi-indication prescription drug with the indication for which it is prescribed to a patient. Indication-specific pricing is intended to incentivize using higher-value treatments and allocating prescription drugs to patients who will receive the greatest benefit.