How can stakeholders collaborate and align incentives to facilitate innovative payment models for drugs?

1 Define the value proposition

The first step is to define the value proposition of the drug, based on the evidence of its clinical and economic benefits, as well as the unmet needs and preferences of the target population. This requires a robust and transparent assessment of the drug's value, using methods such as cost-effectiveness analysis, budget impact analysis, and patient-reported outcomes. The value proposition should also reflect the uncertainty and variability of the drug's performance, and how it can be managed through risk-sharing or outcomes-based arrangements.

2 Engage in dialogue and negotiation

The second step is to engage in dialogue and negotiation with the relevant stakeholders, to understand their perspectives, interests, and constraints, and to identify potential areas of agreement and disagreement. This requires a proactive and constructive approach, based on trust, mutual respect, and shared goals. The dialogue and negotiation should also involve the patients and their representatives, as they are the ultimate beneficiaries and users of the drug, and their voice and preferences should be heard and considered.

3 Design the payment model

The third step is to design the payment model that best suits the characteristics of the drug, the objectives of the stakeholders, and the context of the health system. The payment model should align the incentives of the stakeholders, to ensure that the drug is used appropriately, efficiently, and effectively, and that the value is delivered and measured. The payment model should also be flexible and adaptable, to account for the changing evidence, needs, and circumstances over time. Some examples of innovative payment models for drugs are performance-based contracts, indication-based pricing, subscription models, and annuity payments.

4 Implement and monitor the payment model

The fourth step is to implement and monitor the payment model, to ensure that it works as intended, and that it achieves the desired outcomes and impacts. This requires a clear and feasible operational plan, with roles and responsibilities, data collection and analysis, payment mechanisms, and dispute resolution processes. It also requires a regular and rigorous evaluation of the payment model, using relevant indicators and methods, to assess its effectiveness, efficiency, equity, and sustainability, and to identify any issues or gaps that need to be addressed or improved.

5 Learn and improve the payment model

The fifth step is to learn and improve the payment model, based on the feedback and evidence from the implementation and monitoring phase. This requires a continuous and collaborative learning process, involving all the stakeholders, to share the results, insights, and lessons learned from the payment model, and to identify the best practices and opportunities for improvement. The learning and improvement process should also foster innovation and experimentation, to test new ideas and approaches that can enhance the value and impact of the drug.

6 Scale and spread the payment model

The sixth step is to scale and spread the payment model, to increase its reach and relevance, and to maximize its benefits for the health system and the society. This requires a strategic and systematic approach, to identify and engage the potential adopters and influencers of the payment model, and to facilitate their awareness, understanding, and acceptance of the payment model. It also requires a supportive and enabling environment, with policies, regulations, and incentives that promote and reward the adoption and diffusion of innovative payment models for drugs.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?