Abstract
Aims: Six Delta is a six-dimensional independent platform for outcome-based pricing/contracting. The fifth dimension (δ5) estimates prices on the basis of the risk of efficacy failure of a drug. 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 risk of efficacy failure pricing dimension utilizes a seven-step method: (1) defining risk; (2) extracting data; (3) predicting models; (4) performing Monte Carlo Simulation (MCS) to estimate risk of efficacy failure; 5) estimating ranges for a payback; (6) adjusting for medical inflation; and (7) performing Monte Carlo Simulation (MCS) to estimate the DSPRisk of efficacy failure. 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 risk of efficacy failure for osimertinib in terms of overall and progression-free survival versus standard of care. We used the estimated risk to estimate the price reduction on the wholesale acquisition cost (WAC) for the two hypothetical contracts: a 1-year (2019–2020) and 2-year contract (2019–2021). From this we estimated the DSPRisk of efficacy failure. Results: Based on the risk of OS and PFS efficacy failure for osimertinib in OS and PFS, in the 1-year contract, the DSPRisk of efficacy failure was estimated at $12,652 (or −13.44% the 2018 WAC) for a 30-day prescription. For the 2-year contract (2019–2021), the DSPRisk of efficacy failure was estimated at $13,019 (or −10.93% the 2018 WAC). Conclusions: We demonstrated that pricing methods based on risk of efficacy failure methods can be integrated into our proposed Six Delta platform for outcome-based pricing/contracting.
Original language | English (US) |
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Pages (from-to) | 1246-1255 |
Number of pages | 10 |
Journal | Journal of medical economics |
Volume | 23 |
Issue number | 11 |
DOIs | |
State | Published - Nov 1 2020 |
Keywords
- Risk of failure
- lung cancer
- osimertinib
- outcome-based-contracting
- pricing methods
ASJC Scopus subject areas
- Health Policy