In recent months, there has been a pressing need in the United States for access to affordable medical services and pharmaceuticals. When J. Lyle Bootman first became Executive Director of the HOPE Center at the University of Arizona in 1986, it was with the mission to apply practical economic measures to the health care industry and management of health systems. Although J. Lyle Bootman retired as Executive Director in 2018, he has seen the HOPE Center’s mission realized in his former students’ published works.
One such former student, Dr. Nimer Alkhatib, has recently designed the groundbreaking platform, The Six Delta Platform for Outcome-Based Contracting for Pharmaceuticals. The Six Delta Platform is the first technical platform for outcome-based contracting and utilizes a “multidimensional price assessment in which the six dimensions are used to provide price variations.” Dr. Alkhatib and fellow researchers used the six dimensions to determine price assessment, varying from “Cost-effectiveness analysis and cost-utility analysis-based pricing” to “risk of efficacy failure-based pricing.” This work is vital to the future of outcome-based contracts as few metrics have been created to identify an accurate base price for contracts.
Outcome-based contracts are largely considered the pharmaceutical industry’s response to the public’s concerns over rising drug prices and their calls for regulations. These contracts are based on the agreement that a drug’s price will match the value of its effectiveness. If a drug does not perform to specific standards, a refund is offered once the treatment is completed. One of the most well-known examples of outcome-based contracts was Harvard Pilgrim’s 2017 agreement with Spark Therapeutics. The outcome-based contract covered Spark Therapeutics’ retinal dystrophy gene therapy treatment, Luxturna, which costs over $850,000 for a single treatment. The agreement stated that if Luxturna should fail to treat the anonymous patient’s retinal dystrophy, that Harvard Pilgrim would receive a rebate from Spark Therapeutics.
Today, outcome-based contracts are still being tested as a viable tactic to reduce pharmaceutical spending and lower generic drug prices. While outcome-based contracts are becoming more common within the US, they are still regarded with uncertainty from a lack of research and data. Jesse Bootman stresses that contracts are still relatively new and possess the potential to redefine the pharmaceutical industry, which is why Dr. Alkhatib and his fellow researchers’ platform The Six Delta Platform is essential to the future of this new pricing model.