Modeling Risk Sharing Agreements and Patient Access Schemes

Risk sharing agreements are becoming an increasingly common type of contract between drug manufacturers and third party payers such as private insurance companies and public sector health plans. In a risk sharing agreement a payer will agree to include a drug on its formulary in the presence of a contract that reduces some of the payer’s risk. Payer risk may be caused by high uncertainty in sales volume, cost, effectiveness, or cost-effectiveness of a new drug. In this chapter we review the literature on risk sharing agreements, identify some opportunities for future research in the area, and highlight some policy implications associated with their use.