OBJECTIVES: The objective of the study was to compare the risk borne by payers and technology or healthcare providers under maximum payment cap and pay for response schemes using a simulation study. METHODS: Overall and progression-free survival data were simulated for a population of 10,000 patients receiving either a new treatment of best supportive care. Trials samples were repeatedly taken from the population data. For each trial prices were set at the maximum acceptable price assuming a cost-effectiveness threshold of £20,000. Base case prices were estimated assuming no “risk share” scheme; assuming a price cap scheme where the maximum cost was capped for individual patients; and a pay for response scheme where the drug was only reimbursed for patients who had not progressed by a given timepoint. The loss to payers - incurred if price paid based on the trial was greater than the price at which the drug was cost-effective was cost-effective across the population - and loss to providers – incurred if the revenue in the populations was less than that estimated based on the trial - was estimated for each simulated trial. The expected losses were then estimated over all the simulated trials RESULTS: The price cap scheme increased the expected loss for payers and decreased the expected loss for providers compared to the base case. The pay for response scheme reduced the expected loss to payers and increased the expected loss for providers. The pay for response scheme was sensitive to the choice of evalution timepoint. CONCLUSIONS: It may be possible to design either price cap or pay for response schemes that increase expected returns for both parties when risk preferences are considered. Relative risk preferences of both parties should be explicitly considered when designing such schemes