Pricing methods in outcome-based contracting: integration analysis of the six dimensions (6 δs)

Nimer S. Alkhatib, Ali McBride, Marion Slack, Sandipan Bhattacharjee, Brian Erstad, Kenneth Ramos, Ivo Abraham

Research output: Contribution to journalArticle

1 Scopus citations

Abstract

Aims: Six Delta is a six-dimensional independent platform for outcome-based pricing/contracting. The six dimensions have been described separately: (δ1) cost-effectiveness analysis and cost-utility analysis-based pricing; (δ2) willingness-to-pay-based pricing; (δ3) reference-based pricing; (δ4) safety-based pricing; (δ5) risk of efficacy failure-based pricing; and (δ6) adherence-based pricing. The final step is to integrate the various dimension-specific pricing estimates into a composite estimate termed the All-Dimensional Price (ADP). We describe the methodology for this integration 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: For better accuracy in estimating the ADP, we used the prices generated from the six dimensions at scenario levels, not at the dimension-specific price (DSP) level. We pooled the price estimates and performed Monte Carlo Simulations (MCS) for the price scenarios generated by the six dimensions. We used the results of the proof-of-concept exercise involving osimertinib in NSCLC with EGFR mutation to estimate the ADP in two hypothetical contracts: 1-year (2019–2020) and 2-year contract (2019–2021). Results: The average of the 30-day prescription estimates from the six dimensions averaged $10,819 (SD=$8,486) for the 1-year contract and $10,730 (SD=$8,500) for the 2-year contract. MCS yielded for the 1-year contract an ADP of $10,959 (or −25.02% the 2018 WAC price) and an ADP for the 2-year contract was $10,788 (or −26.19% the 2018 WAC price). Conclusions: We demonstrated that the integration of the prices from the six dimensions of the Six Delta platform and market conditions is feasible and yields multidimensional prices estimates to support outcome-based pricing/contracting.

Original languageEnglish (US)
Pages (from-to)1266-1272
Number of pages7
JournalJournal of Medical Economics
Volume23
Issue number11
DOIs
StatePublished - Nov 1 2020

Keywords

  • Six delta platform
  • lung cancer
  • osimertinib
  • outcome-based-contracting
  • pricing methods

ASJC Scopus subject areas

  • Health Policy

Fingerprint Dive into the research topics of 'Pricing methods in outcome-based contracting: integration analysis of the six dimensions (6 δs)'. Together they form a unique fingerprint.

Cite this