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Pricing methods in outcome-based contracting: δ1: cost effectiveness analysis and cost-utility analysis-based pricing
Nimer S Alkhatib1,2, Kenneth Ramos3, Brian Erstad1,4
1Center for Health Outcomes and PharmacoEconomic Research, College of Pharmacy, University of Arizona, Tucson, AZ, USA.
Journal of Medical Economics
|August 27, 2020
Summary
This study introduces the Six Delta platform for outcome-based pricing, using cost-effectiveness (CEA) and cost-utility analysis (CUA) to estimate drug prices. A proof-of-concept with osimertinib in lung cancer demonstrated its utility for value-based contracts.
Area of Science:
- Health Economics
- Pharmaceutical Pricing
- Oncology Therapeutics
Background:
- Outcome-based pricing models are crucial for sustainable healthcare.
- Cost-effectiveness analysis (CEA) and cost-utility analysis (CUA) are key tools for value assessment.
Purpose of the Study:
- To introduce and validate the first dimension (δ1) of the Six Delta platform for outcome-based pricing.
- To apply CEA/CUA methodology to estimate prices for osimertinib in non-small cell lung cancer (NSCLC).
Main Methods:
- Utilized CEA and CUA with probabilistic sensitivity analyses (PSA) to generate cost-effectiveness acceptability curves (CEACs).
- Estimated drug prices at 0%, turning point, and 100% certainty levels.
- Employed Monte Carlo Simulation (MCS) to determine the dimension-specific price (DSPCEA/CUA).
Main Results:
- Turning points for osimertinib pricing were identified at the 50% certainty level.
- The wholesale acquisition cost at the turning point was $14,616 per 30-day prescription.
- The MCS yielded DSPCEA/CUA estimates of $16,391 for a 1-year and $16,677 for a 2-year contract.
Conclusions:
- Conventional CEA and CUA methods can generate price estimates at various certainty levels.
- These estimates are integrable into the Six Delta platform for outcome-based pricing and contracting.
Keywords:
C00Cost-effectiveness analysisD40cost-utility analysislung cancerosimertiniboutcome-based contractingpricingpricing methodsMore Related Videos
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