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Risk-Sharing

As you can read in his 2010 article on the subject, Ed advocates to pharmaceutical manufacturers for judicious use of these contracts given their potential complexity and potential risk for being nothing more than a thinly veiled price reduction.(Source: Blog Posting, RX Outcomes Adviser)
Manufacturers, in more countries, are proposing risk-sharing and value-based schemes more often.
Leela Barham explores whether pharma firms can use value-based pricing (VBP) to improve market access.
Performance-Based Risk-Sharing Arrangements—Good Practices for Design, Implementation, and Evaluation: Report of the ISPOR Good Practices for Performance-Based Risk-Sharing Arrangements Task Force
A pioneering scheme designed by government to impose a money-back guarantee on pharmaceutical companies if their drugs did not adequately treat patients has failed to provide any clear conclusions more than seven years after it was launched.
March 2011
The National Business Coalition on Health (NBCH) recently launched its Value-Based Purchasing (VBP) Guide, a tool developed to support the critical role purchasers and purchaser-led coalitions play as change agents in improved health and health care. The guide serves to educate such stakeholders on how they can implement value-based purchasing programs in their own organizations and local communities.
Managing drug safety and developing drug safety systems is an ongoing, critically important challenge for all involved in manufacturing drugs, regulating drug use, pre- scribing drugs, dispensing drugs, and consuming drugs. Risk Evaluation and Mitigation Strategies (REMS) are the newest tool of the FDA to help manage and ensure safe drug use.(Source:Philip E. Johnson, MS, RPh; George Dahlman; Kirby Eng, RPh;et.al)
Money Since the advent of the PBMs, the concept of reference pricing for pharmaceuticals has seen multiple waves of interest and policy discussion but only minimal uptake. Reference pricing, sometimes referred to as a therapeutic MAC, requires patients to pay the full difference between the price charged at the pharmacy and a reference price reimbursed by the insurer. The reference price is the price of a low-cost drug in a therapeutic cluster of drugs considered clinically equivalent in the treatment of a condition.(Source: RX Outcomes Adviser)
Potential reduction of oncology drug prices in Italy starting in 2011 after an initial analysis of registry data from the outcomes based schemes implemented in Italy since 2006/2007. Italy is one of the most active markets for risk sharing agreements, and has been launching performance based risk sharing schemes in the recent years. Guido Rasi, dircetor of AIFA, the Italian drug agency stated that according to this preliminary analysis of two year data selected drugs could be reduced by 30 to 40 percent.
Recent reforms to the National Health Service (NHS) in England include important changes in the regulation of prices for new medicines. From January 2014, the existing Pharmaceutical Pricing Regulation Scheme (PPRS) will be replaced by “value based pricing” (VBP) for branded medicines sold to the NHS. This will apply only to new medicines; those marketed before 2014 will continue to be governed by the PPRS.
Good Practices for Design, Implementation and Evaluation (Presentation 1 of 6). Lou Garrison, PhD, Co-Chair, ISPOR Performance-Based Risk-Sharing Arrangements Good Practices Task Force and Professor, Pharmaceutical Outcomes Research and Policy Program, University of Washington School of Pharmacy, Seattle, WA, USA, ISPOR Washington DC, 2012.
Good Practices for Design, Implementation and Evaluation. Adrian Towse, MA, MPhil, Co-Chair, ISPOR Performance-Based Risk-Sharing Arrangements Good Practices Task Force and Director, Office of Health Economics, London, UK, ISPOR Washington DC, 2012.
Good Practices for Design, Implementation and Evaluation. Jens Grueger PhD, Vice President & Head, Global Health Economics & Pricing, F. Hoffmann-LaRoche Ltd, Basel, Switzerland ISPOR Washington DC, 2012.
Good Practices for Design, Implementation and Evaluation. Penny Mohr, MA, Vice President of Program Development, Center for Medical Technology Policy, Baltimore, MD, USA, ISPOR Washington DC, 2012.
Good Practices for Design, Implementation and Evaluation. Andrew H. Briggs, DPhil, MSc, William R. Lindsay Chair of Health Economics, Health Economics & Health Technology Assessment, Institute of Health & Wellbeing, University of Glasgow, Glasgow, UK, ISPOR Washington DC, 2012.
During recent discussions, it has been argued that stratified cost-effectiveness analysis has a key role in reimbursement decision-making and value-based pricing (VBP). It has previously been shown that when manufacturers are price-takers, reimbursement decisions made in reference to stratified cost-effectiveness analysis lead to a more efficient allocation of resources than decisions based on whole-population cost-effectiveness analysis. However, we demonstrate that when manufacturers are price setters, reimbursement or VBP based on stratified cost-effectiveness analysis may not be optimal. (Source:Neil Hawkins and David A. Scott, Health Economics. 2011(June):20;6)
Under continuing economic pressure, the assessment of new therapy now goes well beyond the three ex-ante regulatory hurdles (quality, safety and efficacy). The last several years have witnessed the emergence of payers and health technology assessment (HTA) agencies as key stakeholders in market access negotiations. In this context, cost-effectiveness analysis has been given a central role and is now likely the most searched and applied type of analysis. (Source: ISPOR Connection, Olivier Ethgen, MSc, PhD,et.al.)
Risk-sharing agreements, although attractive due to the principle of paying by results, also entail risks. Too many patients may be put under treatment. Prices are likely to be adjusted upward, in anticipation of future risk-sharing agreements between the pharmaceutical company and the third-party payer. (Source: Health Economics, April 2011)
The first in the series covers Value Based Pricing and covers some insightful topics including how value based pricing will affect pharma on a global scale and how this will affect your products chance of reimbursement; how therapies will be assessed in order to increase the chances of approval; what impact VBP will have on innovation initiatives and how you can overcome the challenges created by the new system
In December 2010, the Government launched its consultation on its plans to change the way medicines are priced in the UK. By 2014, a system of ‘value-based pricing’ (VBP) will replace the current Pharmaceutical Price Regulation Scheme (PPRS), which is a voluntary agreement between the Department of Health (DH) and the pharmaceutical industry whereby companies negotiate profit rates from drug sales to the National Health Service (NHS) every 5 years utilising price and profit controls.
Presentation at ISPOR Europe, Nov. 2011, by J.-Matthias Graf von der Schulenburg, PhD, Professor of Economics & Director, Institute of Risk and Insurance, Gottfried Wilhelm Leibniz Universität Hannover, Hannover, Germany
In December 2010, the UK Department of Health released a consultation document to elicit comments on 'proposals for a new value-based system of pricing medicines which aims to recognise and reward innovation. The document sets out the principles that would underpin the move to value-based pricing, outlines how the new system could work across the UK and seeks views on a number of key issues'. Responses were requested by 17 March 2011.
Presentation at ISPOR Europe, Nov. 2011, by John Brazier, PhD, Professor, School of Health and Related Research (ScHARR), University of Sheffield, Sheffield, UK
Value-Based Purchasing and Comparative Effectiveness Research: Why the Pharmaceutical, Biotechnology, and Medical-Surgical Device Industries Should Embrace the Coming Market Evolution. (Source: MarCom Group International, Inc.)
WellPoint will begin tying hospital reimbursement increases to quality measurements through its Blue Cross Blue Shield plans in 14 states, according to a report by the Wall Street Journal Health Blog.While CMS will launch a similar quality effort next year, called value-based purchasing, WellPoint is thought to be the first major private payor to launch such a system. The WellPoint formula for measuring quality of care is based 55 percent on health outcomes, 35 percent on patient-safety measures and 10 percent on patient satisfaction.(Source:Becker's Hospital Review)