Please login to the form below

Not currently logged in

Risk sharing: mitigate uncertainty

The pros and cons of such an agreement must be weighed carefully to ensure it is the right strategy
rock climbing

The use of risk-sharing agreements as innovative market access strategies is a current hot topic. However, implementing such deals is easier said than done and can be associated with a high administrative burden, additional costs and a lot of uncertainty. Thus, the question arises whether and when a risk-sharing agreement is the right strategy for a product.

The first risk-sharing agreements were born of necessity. Insufficient data for a reimbursement decision from the payers' perspective, especially in terms of long-term, real-life data, induced the industry to break new ground with regard to its market access strategies.

What is the solution if the data available at the time of the planned product launch is insufficient for a payer to reimburse the therapy? A deal can be agreed that links reimbursement to the product's performance (eg. clinical outcome or utilisation) in the post-marketing setting. The real-world uncertainty is shared with respect to:

•    The product's effectiveness
•    The product's cost-effectiveness
•    The outcomes of models, including links between surrogate markers and long-term outcomes
•    And/or the budgetary impact (number of patients treated, dosage/therapy duration).

Four principles
The expression 'risk sharing' is interchangeably used for different forms of market access agreements and vice versa. This includes terms such as market access schemes, cost-sharing, dose-capping, response schemes, pay-for-outcome and performance-based pricing, to name but a few.

Despite the several ways they may be named, risk-sharing agreements can broadly be divided into two categories: finance-based and performance-based. A further distinction is whether the agreement is based on a disease population or the individual patient.

Finance-based/patient population level
The price of a drug is agreed between a payer and a manufacturer on the basis of a sales volume forecast. If the actual sales volume exceeds a predefined volume cap, the manufacturer has to pay penalties, in terms of money, rebates or price reductions. This is the case in France and Australia, for example.

Finance-based/individual patient level
These agreements ensure for payers that the individual patient treatment cost will not exceed a certain threshold. For example, Novartis agreed with the NHS in the UK to pay for the macular degeneration drug Lucentis in case the patient required more than 14 injections (dose-capping). An example of a so-called cost-capping agreement is Avastin in Italy, whereby Avastin for the management of approved cancer cannot exceed €25,941 per year.

Performance-based/patient population level
The multiple sclerosis (MS) deal in the UK is the most popular example of this type of risk-sharing agreement. After the National Institute for Health and Clinical Excellence (NICE) considered neither beta-interferons nor Glatiramer to be cost-effective for the treatment of MS, an acceptable level of £36,000/Quality Adjusted Life Year (QALY) was defined and a prospective study launched in 2002. Over a period of 10 years the cost-effectiveness of four products would be monitored and the prices adjusted accordingly to meet the agreed cost/QALY threshold.

Performance-based/individual patient level

The most prominent example of this type of risk-sharing deal is Johnson & Johnson's Velcade for the treatment of relapsed multiple myeloma in the UK. Following NICE's conclusion that Velcade was not cost-effective (at a cost of £3,000 per cycle), it was agreed that patients showing full or partial response to the drug (measured by the serum M-protein level as a surrogate) would be kept on therapy, funded by the NHS. Patients showing insufficient, or no, response would be taken off therapy and refunded by the manufacturer. Another example of such a deal is the agreement between Novartis and some German sick funds, where Novartis would refund the bisphosphonate Aclasta for patients who suffered from a fracture within one year despite taking the drug.

Figure 1. Pros & cons of risk-sharing agreements

•  Speed access to new innovative therapies
•  Truly value-based
•  Payers pay for the actual real-life benefit
•  Fewer drugs wasted on non-responders and noncompliance
•  Competitive advantage for therapies with a good performance
•  Fosters partnership between industry and payers
•  Positive impact on industry image

•  High administrative and logistic burden
•  Labour- and cost-intensive to implement
•  Legal issues regarding individual patient data collection and transfer
•  Methodological problems (definition of effectiveness, clinical outcome indicators)
•  Objective clinical measures not available in all disease areas
•  Costs can outweigh benefits

Complex to implement
The implementation of a risk-sharing agreement can be quite difficult. While finance-based schemes are comparably easy to execute, having a low administrative burden and data on usage that is relatively easy to obtain, performance-guarantee agreements are much more complex and costly. It is evident that under a performance-based scheme the success of the intervention needs to be measured, documented and evaluated. It is in the interests of both payer and manufacturer that this is handled by an independent, neutral third party. The related investment and administrative burden should not be underestimated. In addition to the necessary human resources, the patients being treated under the risk-sharing programme need to be registered, monitored and the results recorded, stored and analysed. Legal issues with regard to patient rights and data privacy/protection related to data collection by a third party can be a further implementation hurdle.

Further analysis
In addition, some outcome-based risk-sharing agreements require additional cost-effectiveness analysis, which is also labour intensive and associated with additional costs. Furthermore, agreement has to be achieved regarding the right clinical outcome indicators (primary and/or surrogate endpoints) as well as on methodological aspects. This is sometimes difficult, since definition and/or measurement of objective clinical indicators is not possible in many disease areas. Plus, the impact of a country-specific risk-sharing agreement on the payer's price acceptance outside the country of interest has to be evaluated to avoid any negative impact on the pricing opportunities in other countries (external price referencing).

Informed decision
There is no question that the decision over whether to enter a risk-sharing agreement must be made with a sound information base. Several key questions need to be answered (Figure 2).

Figure 2. Risk-sharing – Yes Or No?

Key questions


•  What is the risk? Who bears the risk? Who is sharing?
•  Does the agreement provide a competitive advantage?
•  What is the long-term strategic impact on your business?


Arrow down



•  How can the success be measured? How to quantify?
•  Who will do the analysis and assessment?
•  Can the access programme be implemented?

Arrow down



•  Who will manage the programme?
•  What costs are associated with the scheme?
•  Who pays for the management of the programme?

Market research and consultancy can provide valuable information in defining the best form of market access agreement and assessing any related risks.

Payer/KOL advisers research
•    Acceptance of different potential risk-sharing agreements
•    Definition of related parameters (financial/clinical)
•    Definition of 'success' indicators/scales and models for measuring outcomes
•    Implementation (logistics, management, auditing, sponsoring).

Physician research
•    Price/volume information
•    Likelihood to prescribe under a risk-sharing agreement
•    Implementation/practice setting/logistics.

Patient research
•    Epidemiological data/patient population/patient subgroups
•    Impact of patient advocacy groups on market access programmes
•    Validation of scales to measure performance/outcome (pre-analysis).

•    Implementation considerations
•    Trade-off: costs for management of the programme vs. revenue/profit
•    Assessment of the impact of price on other countries.

Figure 3. 'Golden rules' for a successful agreement

1.    Create a win-win situation
2.    Keep it simple
3.    Define clear goals and rules for measuring clinical/outcome criteria
4.    Consider all associated costs (administration, data collection and so on)
5.    Consider long-term impact
6.    Be as transparent as possible (but consider impact on other countries)

Risk-sharing agreements are becoming more and more popular to gain faster market access for new, innovative (and expensive) therapies. Nevertheless, risk sharing is not an easy answer. Risk-sharing programmes can be extremely complex and sometimes nearly impossible to implement. Thus, the feasibility and all potential risks associated with such a deal need to be carefully evaluated and compared with other market access options before entering what can sometimes be a risky deal.

Dr Marco Rauland

The Author
Dr Marco Rauland is head of pricing & market access, GfK HealthCare

To comment on this article, email

27th July 2011


Featured jobs

Subscribe to our email news alerts


Add my company
Bedrock Group

Bedrock Healthcare Communications is a privately owned, award winning communications agency that creates and delivers highly effective, insight driven medical...

Latest intelligence

Ludovic Helfgott
Novo Nordisk awakens its ‘Sleeping Beauty’
Biopharm emerges from troubled times to hit ‘solid growth’, says executive vice president Ludovic Helfgott...
How will the Tories’ historic win shape the NHS?
Paul Midgley and Oli Hudson, of Wilmington Healthcare, explore the impact of December’s General Election result on 2020 and beyond...
CSR 'Christmas Spirit' 2019
OPEN Health champions CSR over Christmas by giving back to the community and increasing our activities and efforts...