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Updated: Dec 10, 2025

Measuring the Subjective Value of Risky and Ambiguous Options using Experimental Economics and Functional MRI Methods
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Pricing methods in outcome-based contracting: δ4: safety-based pricing.

Nimer S Alkhatib1,2, Sandipan Bhattacharjee1,3, Ali McBride3,4,5

  • 1Center for Health Outcomes and PharmacoEconomic Research, College of Pharmacy, University of Arizona, Tucson, AZ, USA.

Journal of Medical Economics
|August 27, 2020
PubMed
Summary

The Six Delta platform integrates ex ante safety assessments for drug pricing. This method can inform outcome-based contracts for treatments like osimertinib in non-small cell lung cancer.

Keywords:
C00D40Safetylung cancerosimertiniboutcome-based-contractingpricing methods

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Area of Science:

  • Pharmacoeconomics
  • Health Economics
  • Oncology

Background:

  • Outcome-based pricing models are emerging in the pharmaceutical industry.
  • Assessing drug safety is crucial for determining fair pricing and patient access.
  • Current pricing models may not adequately account for safety-related treatment discontinuations.

Purpose of the Study:

  • To describe the methodology of the fourth dimension (δ4) of the Six Delta platform, which uses ex ante safety analysis for drug pricing.
  • To present a proof-of-concept application of this safety-based pricing dimension using osimertinib for non-small cell lung cancer (NSCLC).

Main Methods:

  • A four-step method was used to estimate safety-based drug pricing, including pooling and analyzing adverse events (AEs).
  • Monte Carlo Simulation was employed to estimate the Drug Safety Payback (DSPSafety).
  • The methodology was applied to hypothetical 1-year and 2-year outcome-based contracts for osimertinib in NSCLC, using data from the FLAURA trial.

Main Results:

  • For a 1-year contract, the estimated DSPSafety for osimertinib was $14,627 (0.08% above the 2018 wholesale acquisition cost).
  • For a 2-year contract, the estimated DSPSafety for osimertinib was $14,516 (-0.68% below the 2018 wholesale acquisition cost).
  • These results demonstrate the feasibility of integrating safety-based paybacks into outcome-based contracts.

Conclusions:

  • The Six Delta platform's safety-based pricing dimension (δ4) can be integrated into outcome-based contracting strategies.
  • This approach allows for ex ante pricing adjustments based on predicted safety profiles and treatment discontinuation.
  • The methodology provides a framework for developing innovative pharmaceutical pricing models that account for drug safety.