Pricing methods in outcome-based contracting: δ6: adherence-based pricing

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

Research output: Contribution to journalArticlepeer-review

4 Scopus citations


Aims: Six Delta is a six-dimensional independent platform for outcome-based pricing/contracting. The sixth dimension (δ6) estimates prices on the basis of adherence to the prescribed regimen, whereby manufacturers provide payers with adherence-enhancing programs and whereby payers implement these programs and provide adherence data to the manufacturer. 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: We propose two paybacks based on adherence: in-advance (based on clinical trial data) and in-arrear (based on real-world data). The risk of efficacy failure pricing dimension utilizes a 7-step method: 1) defining efficacy endpoints; 2) extracting data; 3) predicting models; 4) estimating in-advance and in-arrear paybacks; 5) suggesting ranges for in-advance and in-arrear paybacks; 6) adjusting for medical inflation; and 7) performing Monte Carlo Simulation (MCS) to estimate the DSPAdherence. 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). The 2018 wholesale acquisition cost (WAC) for a 30-day prescription was used and inflated as needed. Herein, the DSPAdherence is estimated exclusively in terms of in-advance payback because real-world data about osimertinib are not yet available and thus the in-arrear payback cannot yet be estimated. Results: For the 1-year contract, the average price for osimertinib was $13,798 (SD=$1,265) and the DSPAdherence was $13,785 (or −5.69% of the 2018 WAC) for a 30-day prescription. For the 2-year contract, the average price was $12,555 (SD=$2,847) and the DSPAdherence was $12,582 (or −13.92% of the 2018 WAC). Conclusions: We demonstrated that adherence-based pricing methods can be integrated into our proposed Six Delta platform for outcome-based pricing/contracting. The proof-of-concept exercise needs to be expanded with the in-arrear pricing method based on real world data to be secured.

Original languageEnglish (US)
Pages (from-to)1256-1265
Number of pages10
JournalJournal of medical economics
Issue number11
StatePublished - Nov 1 2020


  • Adherence
  • lung cancer
  • osimertinib
  • outcome-based-contracting
  • pricing methods

ASJC Scopus subject areas

  • Health Policy


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