{"entity":{"id":"idea-cost-indication-based-pricing","kind":"idea","name":"Price a cancer drug by how well it works in each cancer","aka":[],"tldr":"A drug that adds a year of life in one cancer and six weeks in another sells at the same price for both; indication-specific prices would pay for the benefit actually delivered.","summary":"Most oncology drugs carry several indications, and the benefit differs from one indication to the next. Indication-based pricing sets a price per indication, either through separate national drug codes or through rebates keyed to the diagnosis on the claim. Italy and Germany use indication-level agreements; in the US, pharmacy benefit managers have run pilots. The barrier is claims data that reliably carries the indication.","asOf":"2026-09-10","links":[{"label":"ESMO Magnitude of Clinical Benefit Scale","url":"https://www.esmo.org/guidelines/esmo-mcbs"},{"label":"ASCO Value Framework update (JCO 2016)","url":"https://doi.org/10.1200/JCO.2016.68.2518"}],"tags":[],"related":[],"cancers":[],"sections":[],"technologies":[],"targets":[],"drugs":["pembrolizumab","nivolumab","atezolizumab"],"companies":[],"institutions":["esmo","asco"],"pathways":[],"terms":["icer-value-assessment"],"trials":[],"people":[],"bottlenecks":["b-drug-pricing","b-incentive-misalignment"],"keyPapers":["paper-schnipper-j-clin-oncol"],"journals":[],"dependsOn":[],"notes":[],"hypothesis":"Indication-based rebates will lower the effective price of low-benefit indications by at least 30% without reducing the launch price of high-benefit indications, and manufacturers will accept them in exchange for coverage.","rationale":"Value frameworks (ESMO-MCBS, ASCO Value Framework) already grade benefit by indication; the payment system simply ignores the grade.","test":"A Medicare Part B demonstration for three multi-indication checkpoint inhibitors with indication-linked rebates, measuring net price by indication, prescribing patterns and access.","maturity":"early-clinical","actor":"payer","cost":"medium","horizonYears":4},"route":"/ideas/idea-cost-indication-based-pricing/","neighbours":{"drug":[{"id":"atezolizumab","kind":"drug","name":"Atezolizumab","route":"/drugs/atezolizumab/"},{"id":"nivolumab","kind":"drug","name":"Nivolumab","route":"/drugs/nivolumab/"},{"id":"pembrolizumab","kind":"drug","name":"Pembrolizumab","route":"/drugs/pembrolizumab/"}],"institution":[{"id":"asco","kind":"institution","name":"American Society of Clinical Oncology (ASCO)","route":"/institutions/asco/"},{"id":"esmo","kind":"institution","name":"European Society for Medical Oncology (ESMO)","route":"/institutions/esmo/"}],"term":[{"id":"icer-value-assessment","kind":"term","name":"ICER and health technology assessment","route":"/terms/icer-value-assessment/"}],"bottleneck":[{"id":"b-incentive-misalignment","kind":"bottleneck","name":"Incentives reward me-too drugs and marginal gains","route":"/bottlenecks/b-incentive-misalignment/"},{"id":"b-drug-pricing","kind":"bottleneck","name":"Prices and value","route":"/bottlenecks/b-drug-pricing/"}],"paper":[{"id":"paper-schnipper-j-clin-oncol","kind":"paper","name":"Updating the American Society of Clinical Oncology Value Framework: Revisions and Reflections in Response to Comments Received","route":"/key-papers/paper-schnipper-j-clin-oncol/"}]}}