12/7/23 | 4:15pm | E51-335

Noah Gans

Anheuser-Busch Professor of Management Science
University of Pennsylvania

Abstract: Conditional-approval schemes, which postpone pricing and reimbursement decisions for new health technologies until after the collection of post-market-approval data, can mitigate uncertainty regarding a technology’s health-economic value. Analytical work that evaluates these schemes rarely considers the strategic behavior of public payers, such as the UK’s National Health Service, or of health technology providers, and it does not explicitly evaluate mechanisms for reimbursement during the post-marketing data collection period. To fill this gap, we develop a stylized model of cooperative bargaining and characterize the interim prices that arise during data-collection processes, as well as expected prices obtained when the treatment is approved for reimbursement after data collection is complete. We illustrate the potentially negative impact of payer policies that constrain interim prices and identify a new risk-sharing mechanism that can mitigate the potentially adverse consequences of those constraints. We complement our analytical results and comparative statics and with a case study motivated by a UK-based conditional approval agreement for an oncology drug.

Bio: Noah Gans is a professor in the OID Department at the University of Pennsylvania’s Wharton School and the Anheuser-Busch Professor of Management Science at Wharton. Noah’s research focuses on service operations, and his current projects focus on overbooking as well as on the health-economic assessments that support adoption decisions for new medical technologies. He has been Department Editor of Stochastic Models and Simulation at Management Science (2014-17) and President of the Manufacturing and Service Operations Management Society (2010-11). At Wharton, Noah has been the Chair of the OID Department (2016-19), and he teaches MBA courses on Business Analytics, Analytics for Services, and Analytics for Revenue Management.