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Money back guarantee? A cost–benefit framework of performance-based agreements (PBAs) for the reimbursement of pharmaceuticals

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  • A. Carletto

    (AIFA, Agenzia Italiana del Farmaco)

  • A. Cicchetti

    (Catholic University of the Sacred Heart)

  • S. Coretti

    (Catholic University of the Sacred Heart)

  • V. Moramarco

    (Catholic University of the Sacred Heart)

  • M. Ruggeri

    (Catholic University of the Sacred Heart)

Abstract

The aim of this paper is to provide an empirical framework based on a discrete-time Markov chain to assess the costs and benefits of Performance Based Agreements (PBAs) for the reimbursement of pharmaceuticals. We provide an empirical testing using a case study referring to a treatment recently approved for reimbursement in Italy. The implementation of this framework is challenging for the agencies dealing with pricing and reimbursement decisions given the uncertainty associated with the treatment effectiveness and safety. On the other hand, empirical evidence shows that the awareness of the expected costs associated with different reimbursement schemes is necessary to inform decision-makers.

Suggested Citation

  • A. Carletto & A. Cicchetti & S. Coretti & V. Moramarco & M. Ruggeri, 2019. "Money back guarantee? A cost–benefit framework of performance-based agreements (PBAs) for the reimbursement of pharmaceuticals," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(1), pages 89-101, March.
    • Handle: RePEc:spr:eurasi:v:9:y:2019:i:1:d:10.1007_s40821-018-0107-y
    DOI: 10.1007/s40821-018-0107-y
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    References listed on IDEAS

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