1. Performance Based Risk Sharing Arrangements:
How Well Does CER/RE Do?
Professor Adrian Towse
Director, Office of Health Economics
Mid-Year Symposium
International Society of Pharmacoepidemiology
11-13 April 2013 ● Munich, Germany
1

2. Agenda
• What are ‘risk-sharing arrangements’?
• Why are payers and manufacturers entering
into them?
• A categorisation
• Experience of study approaches
• Success or failure?
• Good practice

4. Performance Guarantees Are Not New …..

5. What Is a PBRSA?
• PBRSA = Performance-Based Risk Sharing Arrangement
• Also known as:
• Coverage with evidence development (CED)
• Managed entry schemes (MES)
• Outcomes-based schemes
• Risk-sharing agreements
• Access with evidence development
• Patient access schemes (PAS)
• Conditional licensing
• Pay-for-performance programs
• Innovative pricing
• And others?

6. PBRSA—Working Definition
• Includes a program of data collection
• Data collection is typically initiated during the
time period following initial regulatory approval
• Price, reimbursement, and/or revenue are linked
to the outcome of this program of data collection
(explicitly or implicitly )
• Data collection is intended to address uncertainty
• These arrangements provide for a different
distribution of risk

7. Performance-Based Schemes by Year
Performance-based Schemes by Year
140
120
100
Total Schemes: 121
Number of Schemes
80
60
40
20
0
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Schemes
Source: University of Washington database

9. Agenda
• What are ‘risk-sharing arrangements’?
• Why are payers and manufacturers entering
into them?
• A categorisation
• Experience of study approaches
• Success or failure?
• Good practice

11. Categorising Payer Options
PAYER OPTIONS
Payers adopts: no Payer refuses to Payer adopts with
new evidence adopt (NO) additional evidence
required (YES) (YES BUT)
Non-outcomes PBRSA
related scheme (Outcomes related
scheme)
Source: Adapted from Towse, A. and Garrison, L.P. (2010)

12. 12

13. Performance-based schemes between health care payers and manufacturers
Non-outcomes based Health outcomes-based schemes
schemes
Population level Patient level Conditional coverage Performance-linked
reimbursement (PLR)
Market Price Coverage with Conditional treatment Outcomes Pattern or
share volume evidence continuation (CTC) guarantee process of care
development (CED) [Ex: Alzheimer’s drugs in [Ex: OncotypeDx in
Italy] US (United
Healthcare)]
Utilization Manufacturer
caps funded
treatment Only in research Only with
initiation [Ex: Cochlear research
implants in US [Ex: Risperidone Clinical Intermediate
(CMS)] in France] Endpoint Endpoint
[Ex: [Ex: Simvastatin in
Bortezomib in US]
UK]
Source: Carlson et al. (2010)
13

14. Why the Uncertainty?
• Efficacy to effectiveness issues
• Comparator
• Population mix / base line risk
• Health care setting
• Longer term outcomes
• This is CER/RE territory

15. A Value of Information (VOI) Framework
When is a PBRSA worthwhile?
A payer has four major options:
1. Adopt
2. Refuse to adopt
3. Mandate a lower price
4. Enter into a PBRSA that is either
a. is a form of CED where evidence is collected across
patients for review.
b. Performance-linked reimbursement at the patient
level

16. PBRSAs in a VOI Framework
• Use while evidence is collected is attractive but
issues of
1. Ability to collect evidence and use at the same time –
solution is use only in research or to collect in another
jurisdiction
2. Risk of payer wasted money/lost health gain
3. Irreversibility – difficult to change practice/withdraw
product
• Pre-agreement increases the options
• Can agree rebates and/or price/use adjustment

17. Agenda
• What are ‘risk-sharing arrangements’?
• Why are payers and manufacturers entering
into them?
• A categorisation
• Experience of study approaches
• Success or failure?
• Good practice

18. Payer-producer/provider
arrangement
Cost sharing Performance based risk sharing
arrangement arrangements
To manage utilization in the To provide evidence regarding
real world decision uncertainty
Performance linked Coverage with evidence
reimbursement development
- Outcomes
- Budget capping guarantees
- Process of - Only with - Only in
- Utilization capping - Money back care research research
- Discounts guarantees
- Price/volume - Conditional
treatment
continuation
Intermediate endpoint Pre-specified agreement
Clinical endpoint No pre-specified agreement
Source: ISPOR Task Force

19. Dimensions and differences
• Non-health outcomes versus health outcomes
• CED versus performance linked reimbursement
• Pre-agreement versus ‘renegotiation’
• Only with research (OWR) versus Only in research
(OIR)

20. Examples of PBRSA Schemes
Performance based risk sharing
arrangements
To manage utilization in the To provide evidence regarding
real world decision uncertainty
Performance linked Coverage with evidence
reimbursement development
- Outcomes - Only with
- Budget capping guarantees
- Process of - Only in
- Utilization capping care research research
- Money back
UK: MS RSS
- Discounts guarantees Aus: Bosentan
- Price/volume Italy: oncology schemes
- Conditional UK: Votrient US Medicare:
UK: Velcade, Lucentis
treatment France: LVRS, PET, PTAS
continuation glitazones, risperido
ne
Intermediate endpoint Pre-specified agreement
Clinical endpoint No pre-specified agreement
Source: Adapted from ISPOR Task Force

21. Examples of Agreements by Category
Performance linked reimbursement including tackling
subgroup uncertainty (i.e., will the right people get the drug?)
• Response uncertainty. The UK Velcade example tackles
subgroup uncertainty, ensuring identification of
responders. The Italian oncology schemes use this
approach
• UK Lucentis (dose-capping) arrangement for macular
degeneration could be seen as the NHS addresses
outcome uncertainty by capping the price it paid for an
outcome

22. Examples of Agreements by Category (cont.)
Coverage with Evidence Development
• UK multiple sclerosis (MS) drugs scheme
• Australian Bosentan agreement linking price to patient
survival
• French risperidone linking compliance to fewer hospital
admissions
• French studies on (‘gliptins’) for patients with T2
diabetes (ongoing) and glitazones to delay escalation to
insulin therapy

23. Performance-Based Scheme Components by Country
50
45
40
35
Number of Schemes
30
25
20
15
Total Schemes: 121
10
5
0
CED PLR CTC FU
CED: Coverage with evidence development; CTC: Conditional treatment continuation; PLR: Performance linked
reimbursement; FU: Financial or utilization based agreements
*Note: Multiple schemes had multiple performance-based components
Source: University of Washington database
23

24. Agenda
• What are ‘risk-sharing arrangements’?
• Why are payers and manufacturers entering
into them?
• A categorisation
• Experience of study approaches
• Success or failure?
• Good practice

25. UK Multiple Sclerosis Risk Sharing Scheme:
Test Case or Interesting Anomaly?

26. Multiple Sclerosis Drugs in the UK
• NICE reviewed MS drugs for relapsing-remitting multiple
sclerosis in 2001
• 5 year model: £380,000 to £780,000/QALY
• 10 year model: £190,000 to £425,000
• 20 year model: £40,000 to £90,000
• ‘On the balance of costs and benefits, the beta interferons and
glatiramer acetate are not cost-effective’
• Dependent on long-term outcomes: only two years of follow
up data
• Used assumptions and historical control to estimate long-term
outcomes
• Estimates sensitive to the impact of a relapse on quality of life and the
time horizon over which benefits may be accrued.

27. Multiple Sclerosis Drugs in the UK (cont.)
• Performance-based scheme development
• Detailed monitoring over 10 years of a cohort of patients to confirm the CE
of the MS treatments: Avonex, Betaferon, Copaxone and Rebif
• Treatments initiated by specialist MS centres based on ABN guidelines
• No bar to clinicians prescribing for patients outside the guidelines
• Outcome measure is Expanded Disability Status Score
• Actual outcomes reviewed every 2 years against standard MS disease
(non-treated) progression model through the EDSS scale
• Price adjustment to maintain CE threshold at £36,000/QALY
• PLR, outcomes guarantee
• Handling uncertainty:
• Resolve residual uncertainty related to long-term outcomes
• Mitigate negative consequences of uncertainty about value

28. Multiple Sclerosis Drugs in the UK (cont.)
• Prospective cohort study with historical comparator with 2 year
follow up using EDSS **
• ‘The outcomes so far obtained in the pre-specified primary analysis
suggest a lack of delay in disease progression' **
• Prices were not adjusted downward as evidence was not
conclusive. Issues:
• design of the study and time delays generating evidence
• the enforceability of the contract link between prices and outcomes
• problems of governance vigorously defended by chair
• usefulness of the EDSS as the outcome measure
• impact on the choice of comparator when evaluating subsequent new
drugs for the same indications.

29. Bosentan for PAH in Australia
• Effectiveness
• Two small phase III trials: benefit in trials confined to HR-QoL
measures and intermediate markers
• Six-minute-walk test
• Budget impact/patient population considerations
• High cost, small patient population.
• Potential to continue treatment despite lack of benefit  no
alternatives
• Value/CE
• Assumed mortality risk was key driver in cost-effectiveness model
• Assumed link between six minute walk test and mortality
• ICER was accepted with a risk sharing agreement
29

30. Bosentan for PAH in Australia (cont.)
• Model assumed 5.2% for iPAH: $61,594 ICER cost/YOL
• Registry showed
• observed mortality rate in iPAH and APAH SSc were 11.8% and 16.6%
respectively
• for iPAH only this was an ICER of $80,735 (need a price cut of 23.7%)
• adjusted to match RCT popn 8.8% and 14.12% respectively
• weighted observed iPAH (58%) and APAH SSc (42%) was 13.6%
• weighted adjusted iPAH (58%) and APAH SSc (42%) was 11.3%: $64,427
ICER cost/YOL (need a price cut of 4.4%)
• Another oral ERA was listed in 2008 at a 15% price discount
• PBAC requested same discount. Actelion agreed. No further
price reductions sought as a result of the risk share.

31. Examples of Schemes in France
• Risperidone used a sophisticated case-control design with the
preliminary construction of a historic control cohort matching
patients treated by risperidol, and then a parallel follow-up
after the introduction of the long lasting form.
• Glitazones methodology required selecting a panel of GPs and
asking them to include prospectively patients who failed on
metformin mono-therapy and switched to bi-therapy. GPs
were free to use either gliptines or sulfamides and were to
follow up patients for three years.
Source: Gérard De Pouvourville

32. Votrient (Pazopanib) in UK
• 12.5% discount on Votrient 's list price
• Price parity with Sutent (a monthly cost of just under
GBP2,000 (US$3,085) per patient)
• Future financial rebate if Votrient proves inferior to Sutent
with regards to its efficacy, in ongoing head-to-head trials
• Exact scale of the potential rebate not disclosed
• The results of the COMPARZ study reported in October 2012
and showed non-inferiority in PFS

33. Source: Paolo Siviero, AIFA

34. Agenda
• What are ‘risk-sharing arrangements’?
• Why are payers and manufacturers entering
into them?
• A categorisation
• Experience of study approaches
• Success or failure?
• Good practice

36. Evidence from the Literature
• Puig-Peiro et al. (2011) conducted a systematic literature review
to identify existing knowledge about the costs and benefits of
PBRSAs, assessed either quantitatively or qualitatively. Found
little quantitative evidence
• Neumann et al. (2011) reviewed five PBRSAs in the US and UK
and concluded that they are difficult to implement in practice
• The results from Italy and other EU countries also are unclear and
the schemes are evolving
• Overall, the literature suggests an important gap in structured ex
post evaluation of PBRSAs. Utilisation schemes appear to have
been more successful to date than CED schemes. However, the
evidence is limited, mixed, qualitative, and partial

37. Agenda
• What are ‘risk-sharing arrangements’?
• Why are payers and manufacturers entering
into them?
• A categorisation
• Experience of study approaches
• Success or failure?
• Good practice

38. Task Force Focus:
Four Good Practice Questions
Q1. Desirability: Is a PBRSA the appropriate way forward given
the uncertainty and the alternative methods for reducing this
uncertainty?
Q2. Evidence collection: Which PBRSA research design is most
appropriate to collecting evidence that addresses the relevant
uncertainties?
Q3. Implementation: How should a PBRSA be
implemented, governed, and reported?
Q4. Evaluation: Has the PBRSA achieved its objectives? Was it
good value from a health system perspective?

39. Research Design Options
• Research Design Options will include
• Traditional targeted randomized clinical trial
(RCT), focusing on efficacy
• Large pragmatic clinical trial (PCT), randomized but with
less rigorous entry inclusion or exclusion criteria
• Prospective observational study of patients without
randomization
• Hybrid design that includes observational cohorts and
retrospective data
• In any case: need to balance scientific validity, real
world relevance, cost and time

40. Type of Evidence Collection
• The design choice will depend on the uncertainty
that the PBRSA evidence collection is trying to
address:
• Uncertainty around whether the medical product or service will
be used in the right patients (not all patients may
respond, effectiveness and cost-effectiveness differs across
indications or groups of patients)
• Uncertainty at launch around clinical or economic outcomes
(effectiveness vs. efficacy, final outcomes vs. surrogates, or
about size of cost offsets)

41. Alternatives to PRSAs
1. Options for payers at launch
• Adopt now--no further evidence collection
• Get it right the 'first time.' Dialogue with regulators and HTA
bodies will help. Hard to resolve all uncertainties at launch
• Delay adoption and collect further information
• Lose benefits of access
2. Greater use of Adaptive Licensing increases PBRSA importance as a
framework for CED
3. Coverage with evidence development with no agreement will become
less attractive
• Renegotiation with additional information but
• no commitment to information collection
• no commitment how new evidence will be used

42. 42

43. References
Carlson et al. (2010) Linking payment to health outcomes. Health Policy. 96(3), 179-190.
Neumann, P.J. et al. (2011) Risk-sharing arrangements that link payment for drugs to health
outcomes are proving hard to implement. Health Affairs. 30(12), 2329-2337.
Puig-Peiró, R., Mestre-Ferrandiz, J., Sussex, J. and Towse, A.(2011) Literature review on Patient
Access Schemes, Flexible Pricing Schemes and Risk Sharing Agreements for medicines. Paper
presented at ISPOR 14th Annual European Congress. Madrid, Spain. 5-8 November.
Towse, A., Garrison, L. and Puig-Peiró, R. (2012) The use of pay-for-performance for drugs: Can it
improve incentives for innovation? Occasional Paper. 12/01. London: Office of Health Economics.
Towse, A. and Garrison, L.P. (2010) Can’t get no satisfaction? Will pay for performance help?
Toward an economic framework for understanding performance-based risk-sharing agreements
for innovative medical products. Pharmacoeconomics. 28(2), 93-102.

44. To enquire about additional information and analyses, please contact
Prof Adrian Towse: atowse@ohe.org
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