It takes two to tango. Setting out the conditions in which performance-based risk-sharing arrangements work for both parties.

Abstract

ObjectivesFaster regulatory approval processes often fail to achieve faster patient access. We seek an approach, using performance-based risk-sharing arrangements (PBRSA), to address uncertainty for payers regarding the relative effectiveness and value for money of products launched through accelerated approval schemes.One important reason for risk-sharing is to resolve differences of opinion between innovators and payers about a technology’s underlying value. To date, there has been no formal attempt to set out the circumstances in which risk-sharing can address these differences. MethodsWe use a value of information (VOI) framework to understand what a PBRSA can, in principle, add to a reimbursement scheme, separating payer perspectives on cost-effectiveness and the value of research from those of the innovator. We find 16 scenarios, developing 5 rules to analyse these 16 scenarios, identifying where risk-sharing adds value for both parties. ResultsWe find that risk-sharing provides an improved solution in 9 out of 16 combinations of payer and innovator expectations about treatment outcome and the value of further research. Among our assumptions, who pays for research and scheme administration costs are key. ConclusionsSteps should be undertaken to make risk-sharing more practical, ensuring that payers consider it an option. This requires additional costs to the health system falling on the innovator in an efficient way that aligns incentives for product development for global markets. Health systems benefits are earlier patient access to cost-effective treatments and payers with higher confidence of not wasting money. Innovators get greater returns whilst conducting research.