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T 20: US Outcomes-Based Drug Pricing: A Fad or the Future?

Poster Presenter

      Michelle Hoiseth

      • Corporate Vice President
      • PAREXEL International
        United States


Pay-for-performance deals have been recently agreed with major PBMs and insurers for Repatha and Entresto. This research analyses experiences in UK, Australia and Italy to inform a discussion on whether such agreements could form part of a new US drug pricing paradigm.


Health technologies that have been publically reimbursed with a performance or financial based risk sharing scheme were identified from the relevant payer body website up to 7th December 2015 (UK: SMC and NICE, IT: AIFA, AU: PBAC). The date, indication and type of agreement were extracted. Authors: Richard Macaulay and Patricia Cost, PAREXEL Access Consulting


In England and Wales, 61 indications are currently recommended by NICE with risk sharing agreements (RSAs - termed Patient Access Schemes [PAS] in UK), 42% for oncology indications. 74% of these are simple discount schemes, with 24% being more complex financial schemes (free stock, dose caps, rebates) and only 2% (n=1) being performance based. This one performance based scheme was also the oldest NICE PAS in place. Previous experience with performance-based Risk Sharing Agreements [RSAs] was identified in Multiple Sclerosis where a large cohort of patients using interferon beta were to be followed for 10 years from 2002 and price decreases triggered if outcomes were worse than predicted. However, despite negative findings from an initial readout in 2009 (outcomes were not only worse than predicted but were worse than untreated controls) price reductions were not realized due to concerns about the model, despite the significant time and resource invested in this. In Scotland, 79 SMC recommendations were identified with a PAS: 86% were simple discounts with only 1% as performance based agreements and 5% complex financial based schemes (8% other/unclear); 43% RSAs were for oncology indications. In Italy, AIFA have 79 drug indications under monitoring with RSAs in place: 64% are performance-based, 33% are financial-based, and 3% have both; 77% of RSAs were for oncology indications (57% of financial-based and 88% of performance-based RSA). In Australia, from Aug 2014 to December 2015, 28% (48/173) PBAC appraisals included a RSA, 71% (34/48) of which were recommended (compared with 61% [72/118] of those lacking a RSA). 57% of these RSAs were financial based, 6% were managed entry agreements (where a temporary price is agreed pending further evidence generation) and only 4% were performance based (33% not stated/unclear).


Recent performance based agreements agreed by PBMs and insurers as part of the coverage decisions of Repatha and Entrestro suggest that benchmarking prices to patient outcomes could provide a new paradigm for drug pricing in the US. Data presented here illustrate that even in single payer health systems, performance based pricing is a relative rarity outside of Italy. The typical mechanism utilized to reduce costs to payers and secure national reimbursement is a confidential discount on the list price. NICE in particular have previously agreed several outcome-based RSAs but have found these difficult and costly to administer alongside difficulties in clawing back rebates where outcomes are not realized. The US is also a much more fragmented healthcare landscape, where tracking patients and outcomes is even more challenging. Nevertheless, it is notable that Italy continues to utilize performance based RSAs for oncology therapies as part of the AIFA ONCO registry, indicating that where the infrastructure exists, these can be an effective way of ensuring value and controlling costs. Outcomes-based pricing is now also being re-introduced in new forms in other markets. In Australia, newly established managed entry schemes have enabled reimbursement for drugs based upon a temporary price to be revised based on future, potentially real world, evidence. In England, a national oncology registry (SACT) is being established which could be used as a basis for future performance-based RSAs. Indeed, the Cancer Drugs Fund has beeen recently reformed into a temporary reimbursement fund to produce real world data to help inform future NICE appraisals. In conclusion, implementing outcomes-based pricing has been widely viewed as very challenging ex-US and until the correct infrastructure has been built to adequately track patients and enforce rebates it may take many years to become widely established in the US