Searching for approval: risk sharing as price discount?

We examine the eects of risk sharing pricing agreements for new drugs both on consumers ’ surplus and expected profit. We show that the pres-ence of an uncertain listing process means that risk sharing produces two separate eects a price reduction as most of the literature has considered, but it will also influence the probability of listing. Expected prices are usually reduced by risk sharing agreements hence profit are decreasing. However, risk sharing may have an eect on the listing decision itself and for this reason the both ex ante expected profit and consumers surplus may increase after the introduction of these schemes