Paying for Outcomes: Innovative Coverage and Reimbursement Schemes for Pharmaceuticals

health care trends. The relevant uncertainty arises in the transition from efficacy-oriented clinical trial estimates derived during product development to realized performance (effectiveness) in a given patient population. These uncertainties include those related to who will get treated (i.e., patient and subgroup heterogeneity), how much product will be used (both individually and at the population level), and what the impact of the intervention will be on long-term individual and population outcomes. These uncertainties are directly linked to a product’s ultimate budget impact and realized value. In addition, they are particularly salient at product launch when coverage and reimbursement decisions are typically made. Cost pressures on pharmaceutical manufacturers and payers continue to grow with the rising cost of drug development; the emergence of new medical technologies, including diagnostics; and the general expansion of treatable conditions, 6,7 which is exemplified by the potentially expanded indication for statin therapy to include healthy individuals with high levels of C-reactive protein. 8 In this environment, health care payers are under great pressure to contain costs in order to remain competitive. As such, performance-based schemes that link payment to outcomes may be a means to create incentives for manufacturers to participate in targeting their products toward those most likely to benefit, since they would expect to receive a lower price per unit in less targeted patient populations. In addition, utilizationrelated schemes (e.g., price-volume and per patient utilization caps) limit total expenditures and budget impact. Another motivation for performance-based schemes outside the United States can be to provide a means to give a discount to payers without changing the global price—the lowering of which can have negative impacts on revenue due to external reference pricing (i.e., benchmarking drug prices across countries). For