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The Journal of Medical Economics - Special Issue

About this Special Issue

The Six Delta platform for outcome-based contracting for pharmaceuticals

This series of articles outlines the benefits of outcome-based contracting for pharmaceuticals. Owing to the high increase in drug prices and the need to reduce overall medical costs in the United States and Europe, payers and drug manufacturers are adopting value-based approaches for drug pricing. This considers the clinical value of a treatment in determining the payback guarantee if the drug fails to achieve the outcomes demonstrated by a manufacturer, but also reward the manufacturer if the drug achieves exceptional outcomes. 

Learn more about the Six Delta platform for outcome-based contracting for pharmaceuticals in the authors' editorial here or access the individual articles below.

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Pricing methods in outcome-based contracting: δ1: cost effectiveness analysis and cost-utility analysis-based pricing

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Six Delta is a six-dimensional independent platform for outcome-based pricing/contracting. The first dimension (δ1) estimates prices on the basis of cost-effectiveness (CEA) and cost-utility analysis (CUA). The authors 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.

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Pricing methods in outcome-based contracting: δ2: willingness-to-pay-based pricing

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The second dimension (δ2) estimates prices on the basis of four willingness-to-pay (WTP) thresholds. 

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Pricing methods in outcome-based contracting: δ3: reference-based pricing

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The third dimension (δ3) estimates prices on the basis of international drug price referencing methods.

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Pricing methods in outcome-based contracting: δ4: safety-based pricing

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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.

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Pricing methods in outcome-based contracting: δ5: risk of efficacy failure-based pricing

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The fifth dimension (δ5) estimates prices on the basis of the risk of efficacy failure of a drug.

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

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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.

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

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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).

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