Pricing methods in outcome-based contracting: δ4: safety-based pricing

Figures & data

Figure 1. The 4-step method of δ4. Abbreviations. AEs, adverse events; 95%CIs, 95% confidence intervals; MCS, Monte Carlo Simulation DSP_Safety, dimension-specific price-based on safety assessment.

Figure 2. Risk difference and location of desirable and undesirable regions for absolute risk difference. Abbreviations. RD, risk difference; ARR, absolute risk reduction; ARI, absolute risk increase.

Table 1. Probabilities (%) of adverse events of grades 3 and 4 (AEs3/4)^a and estimated 95% confidence intervals (95%CIs).

AEs3/4	Osimertinib, n (%)	SOC, n (%)
Fatigue	2 (0.72)	2 (0.72)
Diarrhea	6 (2.15)	6 (2.17)
Rash or acne	3 (1.08)	19 (6.86)
Stomatitis	2 (0.72)	2 (0.72)
Anemia	3 (1.08)	3 (1.08)
Dyspnea	1 (0.36)	3 (1.08)
Dry skin	1 (0.36)	3 (1.08)
Paronychia	1 (0.36)	2 (0.72)
Decreased appetite	7 (2.51)	5 (1.81)
Prolonged QT	6 (2.15)	2 (0.72)
AST elevation	2 (0.72)	12 (4.33)
ALT elevation	1 (0.36)	25 (9.03)
Treatment discontinuation	36 (12.90)	Not applicable
AEs3/4	95%CI
	Osimertinib	SOC
Fatigue	0.09%–2.57%	0.09%–2.57%
Diarrhea	0.79%–4.62%	0.79%–4.62%
Rash or acne	0.22%–3.11%	4.15%–10.43%
Stomatitis	0.09%–2.57%	0.09%–2.57%
Anemia	0.22%–3.11%	0.22%–3.11%
Dyspnea	0.01%–1.98%	0.22%–3.11%
Dry skin	0.01%–1.98%	0.22%–3.11%
Paronychia	0.01%–1.98%	0.09%–2.57%
Decreased appetite	1.01%–5.10%	0.59%–4.16%
Prolonged QT	0.79%–4.62%	0.09%–2.57%
AST elevation	0.09%–2.57%	2.26%–7.45%
ALT elevation	0.01%–1.98%	5.93%–13.03%
Treatment discontinuation	9.20%–17.41%	Not applicable

^aThe adverse events were from FLAUA clinical trial over 1.5 year in which the sample size of osimertinib and SOC populations was 279 and 277, respectively.

Abbreviations. SOC, standard of care; AST, aspartate aminotransferase; ALT, alanine aminotransferase.

Table 2. Probabilities (%) and 95% confidence intervals (95%CIs) for adverse events of grades 3 and 4 (AEs3/4) standardized^a and adjusted for 1-year and 2-year contracts.

AEs3/4	1-year contract (2019–2020)		2-year contract (2019–2021)
	Osimertinib	SOC	Osimertinib	SOC
Fatigue	0.48 (0.06–1.72)	0.48 (0.06–1.72)	0.95 (0.12–3.41)	0.96 (0.12–3.41)
Diarrhea	1.44 (0.53–3.11)	1.45 (0.53–3.11	2.86 (1.06–6.11)	2.88 (1.06–6.11)
Rash or acne	0.72 (0.15–2.08)	4.63 (2.79–7.08)	1.43 (0.30–4.13)	9.04 (5.49–13.66)
Stomatitis	0.48 (0.06–1.72)	0.48 (0.06–1.72)	0.95 (0.12–3.41)	0.96 (0.12–3.41)
Anemia	0.72 (0.15–2.08)	0.72 (0.15–2.08)	1.43 (0.30–4.13)	1.44 (0.30–4.13)
Dyspnea	0.24 (0.01–1.32)	0.72 (0.15–2.08)	0.48 (0.01–2.63)	1.44 (0.30–4.13)
Dry skin	0.24 (0.01–1.32)	0.72 (0.15–2.08)	0.48 (0.01–2.63)	1.44 (0.30–4.13)
Paronychia	0.24 (0.01–1.32)	0.48 (0.06–1.72)	0.48 (0.01–2.63)	0.96 (0.12–3.41)
Decreased appetite	1.68 (0.68–3.43)	1.21 (0.39–2.79)	3.33 (1.35–6.74)	2.40 (0.78–5.51)
Prolonged QT	1.44 (0.53–3.11)	0.48 (0.06–1.72)	2.86 (1.06–6.11)	0.96 (0.12–3.41)
AST elevation	0.48 (0.06–1.72)	2.91 (1.51–5.03)	0.95 (0.12–3.41)	5.73 (3.00–9.80)
ALT elevation	0.24 (0.01–1.32)	6.11 (3.99–8.89)	0.48 (0.01–2.63)	11.85 (7.82–16.99)
Treatment discontinuation	8.87 (6.23–11.98)	Not applicable	16.95 (12.08–22.52)	Not applicable

^aThe standardization was based on odd ratio calculations (Supplemental Material S1) that used the sample size of the osimertinib (n = 279) and SOC (n = 277) arms in the FLAURA trial.

Abbreviations. SOC, standard of care; AST, aspartate aminotransferase; ALT, alanine aminotransferase.

Table 3. Risk differences (RD) for 1-year and 2-year contracts between osimertinib and SOC.

AEs3/4	1-year contract (2019–2020)		2-year contract (2019–2021)
	RD = POsimertinib − PSOC	Undesirable PDF	RD = POsimertinib − PSOC	Undesirable PDF
Fatigue	0.00%	If ARI >0.00%	0.00%	If ARI >0.00%
Diarrhea	−0.01%	If ARR <0.01%	−0.02%	If ARR <0.02%
Rash or acne	−3.91%	If ARR <3.91%	−7.61%	If ARR <7.61%
Stomatitis	0.00%	If ARI >0.00%	−0.01%	If ARR <0.01%
Anemia	−0.01%^a	If ARR <0.01%	−0.01%^a	If ARR <0.01%
Dyspnea	−0.48%	If ARR <0.48%	−0.96%	If ARR <0.96%
Dry skin	−0.48%	If ARR <0.48%	−0.96%	If ARR <0.96%
Paronychia	−0.24%	If ARR <0.24%	−0.48%	If ARR <0.48%
Decreased appetite	0.47%	If ARI >0.47%	0.93%	If ARI >0.93%
Prolonged QT	0.96%	If ARI >0.96%	1.90%	If ARI >1.90%
AST elevation	−2.43%	If ARR <2.43%	−4.78%	If ARR <4.78%
ALT elevation	−5.87%	If ARR <5.87%	−11.37%	If ARR <11.37%
Treatment discontinuation	−3.56%	If ARR <3.56%	−6.37%	If ARR <6.37%

Negative RD indicates ARR; positive RD indicates ARI.

^aNot same (The RD measured over the 1-year contract was 0.005195% and measured over the 2-year contract at 0.010314%).

Abbreviations. AEs3/4, adverse events grade 3 or 4; RD, risk difference; P_osimertinib, probability of AE3/4 from osimertinib; P_SOC, probability of AE3/4 from SOC; PDF, probability density function; ARR, absolute risk reduction; ARI, absolute risk increase; SOC, standard of care; AST, aspartate aminotransferase; ALT, alanine aminotransferase.

Table 4. Correction factor (%) from MCS, corrected probability (%), and ranges for price adjustments.

AEs3/4	Estimates at 1-year contract (2019–2020)		Estimates at 2-year contract (2019–2021)
	Correction factor	Corrected probability^a	Correction factor	Corrected probability^a
Fatigue	49.45	0.24	49.60	0.95
Diarrhea	50.45	0.73	49.20	2.86
Rash or acne	53.60	0.38	52.95	1.43
Stomatitis	49.50	0.24	50.25	0.95
Anemia	49.60	0.36	50.85	1.43
Dyspnea	55.05	0.13	52.65	0.48
Dry skin	54.10	0.13	54.90	0.48
Paronychia	54.80	0.13	55.40	0.48
Decreased appetite	49.90	0.84	50.35	3.33
Prolonged QT	47.40	0.68	48.80	2.86
AST elevation	53.10	0.25	52.45	0.95
ALT elevation	50.70	0.12	52.60	0.48
Probability of at least one undesirable AE3/4 occurring		0.0415^b		0.0814^b
Probability of treatment discontinuation		8.87% (95%CI = 6.23–11.98%)		0.17% (95%CI = 0.12–0.23%)
Probability of at least one undesirable AE3/4 occurring and leading to discontinuation		0.37% (range = 0.26–0.50%)^c		1.38% (range = 0.98–1.83%)^c

^aCorrected probability = correction factor over a given time × probability of AE3/4 expected over that given time. For example: Corrected probability of fatigue for 1-year contract= 49.49% × 0.48% = 0.23736%, rounded to 0.24%.

^bComplement of product for multiplying each corrected probability complement.

^cThe resulting ranges were used for price adjustment.

Abbreviations. MCS, Monte Carlo Simulation; AEs3/4, adverse events grade 3 or 4; SOC, standard of care; AST, aspartate aminotransferase; ALT, alanine aminotransferase.

Table 5. 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.

Safety-based pricing	1-year contract (2019–2020)	2-year contract (2019–2021)
Safety-based price adjustment (range)	−0.37% (0.26% to −0.50%)	−1.38% (−1.98% to −1.83%)
Inflation rate based on medical consumer price index (mCPI) (%)	0.44%^a	0.72%^a
Adjustment % (safety-based price adjustment + inflation rate) (range)	+0.07% (−0.06% to 0.18%)	−0.66% (−1.11% to −0.26%)
Price of osimertinib (range)	$14,627 ($14,608–$14,642)	$14,520 ($14,453–$14,578)
Average osimertinib price (SD)	$14,626 ($17)	$14,517 ($62)
DSPSafety (% price adjustment)	$14,627 (+0.08%)	$14,516 (−0.68)

^aAs projected from the US Bureau of Labor Statistics by averaging the mCPI estimates of 2014–2018.

Abbreviations. WAC, wholesale acquisition cost; DSP_Safety, dimension-specific price based on safety assessment; SD, standard deviation.