Grants and Contributions:

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Title:

Novel Contractual Arrangements in the Pharmaceutical Industry

Agreement Number:

RGPIN

Agreement Value:

$205,000.00

Agreement Date:

May 10, 2017 -

Organization:

Natural Sciences and Engineering Research Council of Canada

Location:

Ontario, CA

Reference Number:

GC-2017-Q1-01734

Agreement Type:

Grant

Report Type:

Grants and Contributions

Additional Information:

Grant or Award spanning more than one fiscal year. (2017-2018 to 2022-2023)

Recipient's Legal Name:

Zaric, Gregory (The University of Western Ontario)

Program:

Discovery Grants Program - Individual

Program Purpose:

The primary objective of this program of research is to develop a number of mathematical models to study novel and important contractual arrangements in the pharmaceutical industry. I will focus on three main areas:

Risk sharing contracts between drug companies and third-party payers;
Contracts that could be used to increase the supply of essential medicines in low-income countries;
Contracts that could be used to ensure smooth supply of medicines in high-income countries.

The three areas identified above are similar in that: 1. They all may involve contracts between a payer (such as an insurance company, a government healthcare payer or a non-governmental organization(NGO); 2. Various forms of “outcomes based” contracts have been proposed as solutions for each type of problem; and 3. There may be serious unintended consequences from policy proposals that sound rational.

For each subtopic I will investigate a number of proposed and potential contracts between payers and pharmaceutical companies (manufacturers). Key questions of this analysis include some of the following: What are the likely intentional and unintended effects of various contract structures? For a given contract structure, what is the optimal way to structure payments? How do different contract structures compare in terms of cost, performance, and other useful metrics?
Note that the primary focus is not on health or health delivery. Rather, the focus is on understanding the structure and behavior of the contracts themselves, and how they influence the incentives of parties participating in the contracts.