TY - JOUR
T1 - Pricing methods in outcome-based contracting
T2 - δ4: safety-based pricing
AU - Alkhatib, Nimer S.
AU - Bhattacharjee, Sandipan
AU - McBride, Ali
AU - Ramos, Kenneth
AU - Slack, Marion
AU - Erstad, Brian
AU - Abraham, Ivo
N1 - Funding Information:
The authors thank Amber Koslucher and Rayan Maldonado from the College of Public Health, University of Arizona, for validating the mathematical equations and for performing independent revisions of the assumptions, equations, and calculations.
Publisher Copyright:
© 2020 Informa UK Limited, trading as Taylor & Francis Group.
PY - 2020/11/1
Y1 - 2020/11/1
N2 - Aims: Six Delta is a six-dimensional independent platform for outcome-based pricing/contracting. The fourth dimension (δ4) estimates prices on the basis of assessments of the safety of the drug using an ex ante analysis based on clinical trial data. We describe this dimension’s methodology and present a proof-of-concept application to the treatment of non-small cell lung cancer (NSCLC) with EGFR mutation with osimertinib. Materials and methods: The safety-based pricing dimension utilizes a four-step method: 1) pooling adverse events (AE), standardizing, estimating 95%Cis, and adjusting for time; 2) estimating correction factors and corrected probabilities of AEs; 3) estimating the probability of at least one adverse event (AE) occurring and leading to treatment discontinuation; and 4) estimating ranges for payback percentages and performing Monte Carlo Simulation to estimate a DSPSafety. A proof-of-concept exercise with osimertinib in NSCLC was performed for two hypothetical outcome-based contracts: 1-year (2019–2020) and 2-year (2019–2021). We estimated the DSPSafety based on the grade 3/4 AEs observed for osimertinib and standard of care. The 2018 wholesale acquisition cost (WAC) of osimertinib at $14,616 for a 30-day prescription was used. Results: AEs3/4 were retrieved from the FLAURA trial. In the 1-year contract, the DSPSafety of osimertinib was estimated at $14,627 (or +0.08% the 2018 WAC) for a 30-day prescription. In the 2-year contract, the DSPSafety of osimertinib was estimated at $14,516 (or −0.68% the 2018 WAC) for a 30-day prescription. Conclusions: We demonstrated that ex ante pricing methods-based paybacks for safety issues leading to treatment discontinuation can be integrated into our proposed Six Delta platform for outcome-based pricing/contracting.
AB - Aims: Six Delta is a six-dimensional independent platform for outcome-based pricing/contracting. The fourth dimension (δ4) estimates prices on the basis of assessments of the safety of the drug using an ex ante analysis based on clinical trial data. We describe this dimension’s methodology and present a proof-of-concept application to the treatment of non-small cell lung cancer (NSCLC) with EGFR mutation with osimertinib. Materials and methods: The safety-based pricing dimension utilizes a four-step method: 1) pooling adverse events (AE), standardizing, estimating 95%Cis, and adjusting for time; 2) estimating correction factors and corrected probabilities of AEs; 3) estimating the probability of at least one adverse event (AE) occurring and leading to treatment discontinuation; and 4) estimating ranges for payback percentages and performing Monte Carlo Simulation to estimate a DSPSafety. A proof-of-concept exercise with osimertinib in NSCLC was performed for two hypothetical outcome-based contracts: 1-year (2019–2020) and 2-year (2019–2021). We estimated the DSPSafety based on the grade 3/4 AEs observed for osimertinib and standard of care. The 2018 wholesale acquisition cost (WAC) of osimertinib at $14,616 for a 30-day prescription was used. Results: AEs3/4 were retrieved from the FLAURA trial. In the 1-year contract, the DSPSafety of osimertinib was estimated at $14,627 (or +0.08% the 2018 WAC) for a 30-day prescription. In the 2-year contract, the DSPSafety of osimertinib was estimated at $14,516 (or −0.68% the 2018 WAC) for a 30-day prescription. Conclusions: We demonstrated that ex ante pricing methods-based paybacks for safety issues leading to treatment discontinuation can be integrated into our proposed Six Delta platform for outcome-based pricing/contracting.
KW - Safety
KW - lung cancer
KW - osimertinib
KW - outcome-based-contracting
KW - pricing methods
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U2 - 10.1080/13696998.2020.1815028
DO - 10.1080/13696998.2020.1815028
M3 - Article
C2 - 32845205
AN - SCOPUS:85090442471
SN - 1369-6998
VL - 23
SP - 1237
EP - 1245
JO - Journal of Medical Economics
JF - Journal of Medical Economics
IS - 11
ER -