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Indication-specific Pricing of Pharmaceuticals in the United States 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.

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