Pricing methods in outcome-based contracting: δ2: willingness-to-pay-based pricing

Figures & data

Table 1. Model inputs.

Parameter	Estimates	Reference
Osimertinib price*	$14,616	^7
Base case results of Alkhatib et al.
Cost
Osimertinib	$714,826	^1
SOC	$465,660	^1
QALY gained
Osimertinib	2.91	^1
SOC	1.68	^1
Cost/QALY (monopolistic market)= (cost of osimertinib / QALY gained by osimertinib)	$2,45,644/QALY gained	^1
ICUR (competitive market)= (cost of osimertinib – cost of SOC)/(QALY gained by osimertinib – QALY gained by SOC)	$2,02,574/QALY gained	^1
Inputs for WTP per QALY gained (2018 US dollars)**
<1 × GDP per capita	<$56,455	^8
1 × GDP per capita	$56,455	^8
3 × GDP per capita	$169,365	^8
>3 × GDP per capita	>$169,365	^8
Inputs for the hypothetical outcome-based contracts
Medical Inflation rate projected for 2019–2020	0.44% of 2018	^5
Medical Inflation rate projected for 2019–2021	0.72% of 2018	^5

Abbreviations. WTP, willingness-to-pay; GDP per capita, gross domestic product per capita; QALY, quality-adjusted life year gained; ICUR, incremental cost-utility ratio; SOC, standard of care (erlotinib and gefitinib).

*The price of osimertinib is based on the wholesale acquisition cost (WAC) of a 30-day prescription in 2018 US dollars. **An estimated growth rate of 2.9% was added to the WTP in 2018 to yield the 2019 GDP for the hypothetical 1-year contract and 2-year contract. For 1-year contract (2019–2020) and for 2-year contract: 1 × GDP per capita was $5,81,223 × GDP per capita was $1,74,366, 3 × GDP per capita was >$174,366. No inflation was added to the GDP from 2019 to 2020 for 1-year contract and from 2019 to 2021 for 2-year contract.

Figure 1. Flowchart for the δ2 price analysis. Abbreviations. ICUR, incremental-cost effectiveness ratio; GDP per capita, gross domestic product per capita; WTP, willingness-to-pay; QALY, quality-adjusted life year gained; DSP_WTP, dimension-specific price based on willingness-to-pay

Figure 2. One-way sensitivity analyses and predictive equations: (A) monopolistic market; (B) competitive market. Abbreviations. QALY, quality-adjusted life year gained; ICUR, incremental-cost effectiveness ratio.

Table 2. Estimated prices of osimertinib for two hypothetical contracts (2019–2020 and 2019–2021) at osimertinib 2018 WAC price of $14,616 for a 30-day prescription.

	1-year contract (2019–2020)^a	2-year contract (2019–2021)^b
Inflated WAC price of osimertinib	$14,680	$14,721
WTP-based pricing
<1 × GDP per capita
Monopolistic market	$0^c	$0^c
Competitive market	$0^c	$0^c
Monopolistic market	$0^c	$0^c
Competitive market	$0^c	$0^c
3 × GDP per capita
Monopolistic market	$2,592	$2,599
Competitive market	$5,281	$5,296
>3 × GDP per capita
Monopolistic market	$14,680	$14,721
Competitive market	$14,680	$14,721
Average osimertinib price (SD)	$4,654 ($6,462)	$4,667 ($6,480)
DSPWTP (% price adjustment)*	$4,547 (-68.89%)	$4,704 (-67.82%)

Abbreviations. WTP, willingness-to-pay; DSP_WTP, dimension-specific price based on willingness-to-pay; GDP per capita, gross domestic product per capita; SD, standard deviation; WAC, wholesale acquisition cost. *Price adjustment to 2018 WAC price of osimertinib for 30-day prescription.

^a Inflation rate in 2019–2020 was projected at 0.4395833% but rounded to 0.44% for reporting.

^b Inflation rate in 2019–2021 was projected at 0.71875% but rounded to 0.72% for reporting.

^c By using <1GDP, or 1 × GDP as WTP threshold scenarios, cost of NSCLC management for 15-year time horizon is still not affordable at these thresholds even after zeroing the price for osimertinib. This is because the cost of NSCLC management over 15 years is a multi-cost inputs dependent (cost of managing progression, follow up, supportive care, clinic visits, and labs). That is, we suggested that the price of osimertinib is zero at these thresholds as the worst-case price scenario.

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