Outcome-Based Pricing for New Pharmaceuticals via Rebates
Published Online:6 Aug 2020https://doi.org/10.1287/mnsc.2019.3574
References
- AAM (2018) 2018 Generic drug access & savings in the U.S.: Access in jeopardy. Technical report, Association for Accessible Medicines, Washington, DC. Accessed February 13, 2019, https://accessiblemeds.org/sites/default/files/2018_aam_generic_drug_access_and_savings_report.pdf.Google Scholar
- (2019) Contracts for healthcare referral services: Coordination via outcome-based penalty contracts. Management Sci. 65(3):1322–1341.Google Scholar
- (2017) Bundled payment vs. fee-for-service: Impact of payment scheme on performance. Management Sci. 63(5):1606–1624.Link, Google Scholar
- AHA (2017) Cardiovascular disease: A costly burden for America—Projections through 2035. American Heart Association CVD Burden Report, American Heart Association, Washington, DC. Accessed February 14, 2019, http://www.heart.org/idc/groups/heart-public/@wcm/@adv/documents/downloadable/ucm_491543.pdf.Google Scholar
- (2017) Amgen and Harvard Pilgrim agree to first cardiovascular outcomes-based refund contract for Repatha® (evolocumab). Accessed February 15, 2019, https://www.amgen.com/media/news-releases/2017/05/amgen-and-harvard-pilgrim-agree-to-first-cardiovascular-outcomesbased-refund-contract-for-repatha-evolocumab/.Google Scholar
- . (2014) ACC/AHA statement on cost/value methodology in clinical practice guidelines and performance measures: A report of the American College of Cardiology/American Heart Association task force on performance measures and task force on practice guidelines. J. Amer. College Cardiology 63(21):2304–2322.Crossref, Google Scholar
- (2018) Incentive programs for reducing readmissions when patient care is co-produced. Production Oper. Management 27(6):999–1020.Crossref, Google Scholar
- (2011) Should health authorities offer risk-sharing contracts to pharmaceutical firms? A theoretical approach. Health Econom. Policy Law 6(3):391–403.Crossref, Google Scholar
- (2011) The simple economics of risk-sharing agreements between the NHS and the pharmaceutical industry. Health Econom. 20(4):461–470.Crossref, Google Scholar
- (2017) The cost of not taking your medicine. New York Times (April 17), https://www.nytimes.com/2017/04/17/well/the-cost-of-not-taking-your-medicine.html.Google Scholar
- (2005) Supply chain coordination with revenue-sharing contracts: Strengths and limitations. Management Sci. 51(1):30–44.Link, Google Scholar
- Cancer Treatment Centers of America (2018) What’s the difference? Biosimilar and generic drugs. Accessed February 13, 2019, https://www.cancercenter.com/community/blog/2018/12/whats-the-difference-biosimilar-and-generic-drugs.Google Scholar
- (2009) Paying for outcomes: Innovative coverage and reimbursement schemes for pharmaceuticals. J. Managed Care Pharmacy 15(8):683–687.Crossref, Google Scholar
- (2010) Linking payment to health outcomes: A taxonomy and examination of performance-based reimbursement schemes between healthcare payers and manufacturers. Health Policy 96(3):179–190.Crossref, Google Scholar
- CMS (2017) CMS: Innovative treatments call for innovative payment models and arrangements. Press release, Centers for Medicare & Medicaid Services, Baltimore. Accessed February 15, 2019, https://www.cms.gov/Newsroom/MediaReleaseDatabase/Press-releases/2017-Press-releases-items/2017-08-30-2.html.Google Scholar
- CMS (2018) CMS national health expenditure data. Accessed February 15, 2019, https://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/NationalHealthExpendData/NationalHealthAccountsHistorical.html.Google Scholar
- (1995) Money back guarantees in retailing: Matching products to consumer tastes. J. Retailing 71(1):7–22.Crossref, Google Scholar
- (2017) Cost-effectiveness of evolocumab therapy for reducing cardiovascular events in patients with atherosclerotic cardiovascular disease. JAMA Cardiology 2(10):1069–1078.Crossref, Google Scholar
- (2017) How pharma companies game the system to keep drugs expensive. Harvard Bus. Rev. (April 6), https://hbr.org/2017/04/how-pharma-companies-game-the-system-to-keep-drugs-expensive.Google Scholar
- (2007) Satisfaction guaranteed—“payment by results” for biologic agents. New England J. Medicine 357(16):1575–1577.Crossref, Google Scholar
- (2013) 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. Value Health 16(5):703–719.Crossref, Google Scholar
- (2018) Regeneron is undercutting Amgen in cholesterol drugs—Will it help share? Investor’s Bus. Daily (May 1), https://www.investors.com/news/technology/regeneron-praluent-price-cut/.Google Scholar
- (2017) Accelerated approval and expensive drugs—A challenging combination. New England J. Medicine 376(21):2001–2004.Crossref, Google Scholar
- GoodRx (2019) Repatha Medicare formulary information & restrictions. Accessed February 15, 2019, https://www.goodrx.com/repatha/medicare-coverage.Google Scholar
- (2019) The impact of reimbursement policy on social welfare, revisit rate, and waiting time in a public healthcare system: Fee-for-service vs. bundled payment. Manufacturing Service Oper. Management 21(1):154–170.Link, Google Scholar
- (1993) Modeling loss aversion and reference dependence effects on brand choice. Marketing Sci. 12(4):378–394.Link, Google Scholar
- HHS (2018) American patients first: The Trump administration blueprint to lower drug prices and reduce out-of-pocket costs. Department of Health and Human Services, Washington, DC. Accessed February 15, 2019, https://www.hhs.gov/sites/default/files/AmericanPatientsFirst.pdf.Google Scholar
- HRI (2018) Health Research Institute regulatory insight. Accessed February 13, 2019, https://www.pwc.com/us/en/health-industries/health-research-institute/pdf/pwc-health-research-institute-generic-drug-pricing-june-2018.pdf.Google Scholar
- (2018) The ODYSSEY trial ends well—but will it be enough? CardioBrief (March 10), http://www.cardiobrief.org/2018/03/10/the-odyssey-trial-ends-well-but-is-it-enough/.Google Scholar
- IQVIA (2018) Medicine use and spending in the U.S.: A review of 2017 and outlook to 2022. Institute report, IQVIA Institute for Human Data Science, Danbury, CT.Google Scholar
- (2012) Performance-based contracts for outpatient medical services. Manufacturing Service Oper. Management 14(4):654–669.Link, Google Scholar
- (1979) Prospect theory: An analysis of decision under risk. Econometrica 47(2):263–291.Crossref, Google Scholar
- (2017) Draft order on drug prices proposes easing regulations. New York Times (June 20), https://www.nytimes.com/2017/06/20/health/draft-order-on-drug-prices-proposes-easing-regulations.html.Google Scholar
- KFF (2015) Kaiser health tracking poll: August 2015. Henry J. Kaiser Family Foundation, Washington, DC. Accessed February 15, 2019, https://www.kff.org/health-costs/poll-finding/kaiser-health-tracking-poll-august-2015/.Google Scholar
- KFF (2016) 2016 Employer health benefits survey. Henry J. Kaiser Family Foundation, Washington, DC. Accessed February 15, 2019, https://www.kff.org/report-section/ehbs-2016-section-nine-prescription-drug-benefits/.Google Scholar
- (2012) An evidence-based incentive system for Medicare’s end-stage renal disease program. Management Sci. 58(6):1092–1105.Link, Google Scholar
- (1999) Associations between health status and utilities implications for policy. Medical Care 37(5):479–489.Crossref, Google Scholar
- (2003) Risk sharing pricing models in the distribution of pharmaceuticals. Working paper, Europe Economics, London.Google Scholar
- (2017) Drug companies tie costs to outcomes. Wall Street Journal (September 12), https://www.wsj.com/articles/drug-companies-tie-costs-to-outcomes-1505268421.Google Scholar
- (2018) Evaluation of a pharmaceutical risk-sharing agreement when patients are screened for the probability of success. Health Econom. 27(1):e15–e25.Crossref, Google Scholar
- (2005) No cure, no pay. BMJ 330:1262–1264.Crossref, Google Scholar
- (1995) Signaling quality with a money-back guarantee: The role of transaction costs. Marketing Sci. 14(4):442–466.Link, Google Scholar
- (2017) Association of prior authorization and out-of-pocket costs with patient access to PCSK9 inhibitor therapy. JAMA Cardiology 2(11):1217–1225.Crossref, Google Scholar
- (2015) Do the current performance-based schemes in Italy really work? “Success fee”: A novel measure for cost-containment of drug expenditure. Value Health 18(1):131–136.Crossref, Google Scholar
- NCI (2019) National Cancer Institute Dictionary of cancer terms: Kymriah. Accessed February 20, 2019, https://www.cancer.gov/publications/dictionaries/cancer-terms/def/kymriah.Google Scholar
- (2011) Risk-sharing arrangements that link payment for drugs to health outcomes are proving hard to implement. Health Affairs 30(12):2329–2337.Crossref, Google Scholar
- (2002) Is there a kink in consumers’ threshold value for cost-effectiveness in healthcare? Health Econom. 11(2):175–180.Crossref, Google Scholar
- (2019) Improving access to rare disease treatments: Optimal subsidies, pricing, and payment. Working paper, Eindhoven University of Technology, Eindhoven, Netherlands.Google Scholar
- (2019) Praluent scores heart label, matching Amgen’s rival Repatha. Accessed July 15, 2019, https://www.biopharmadive.com/news/praluent-cardiovascular-approval-label-amgen-pcsk9/553611/.Google Scholar
- (2018) Healthcare spending in the United States and other high-income countries. JAMA 319(10):1024–1039.Crossref, Google Scholar
- (2005) Can prospect theory explain risk-seeking behavior by terminally ill patients? Medical Decision Making 25(6):609–613.Crossref, Google Scholar
- (2017) Evolocumab and clinical outcomes in patients with cardiovascular disease. New England J. Medicine 376(18):1713–1722.Crossref, Google Scholar
- (2017) Outcomes-based pharmaceutical contracts: An answer to high U.S. drug spending? Technical report, The Commonwealth Fund, New York.Google Scholar
- (2017) Considering the side effects of drugmakers’ money-back guarantees. New York Times (July 10), https://www.nytimes.com/2017/07/10/health/prescription-drugs-cost.html.Google Scholar
- (2018) What is a health insurer’s drug formulary and tier pricing? Accessed February 13, 2019, https://www.verywellhealth.com/drug-formulary-tiers-pricing-health-insurance-plans-2615042.Google Scholar
- (1999) Health values and prospect theory. Medical Decision Making 19(3):344–352.Crossref, Google Scholar
- (1986) Rational choice and the framing of decisions. J. Bus. 59(4):S251–S278.Crossref, Google Scholar
- (1992) Advances in prospect theory: Cumulative representation of uncertainty. J. Risk Uncertainty 5(4):297–323.Crossref, Google Scholar
- (2019) Outcome-based reimbursement: The solution to high drug spending? Working paper, The Pennsylvania State University, State College.Google Scholar
- (2019) Risk-sharing agreements for new medical treatments. Working paper, University of Pennsylvania, Philadelphia.Google Scholar

