- In recent years, spending on prescription drugs contributes substantially to the continuous growth in health expenditure in most Western countries. This increase in spending is influenced by both a rise in the use of existing drugs and by the adoption of new and expensive drugs. Risk-sharing agreements between pharmaceutical companies and health insurers have emerged as insurers began to deny reimbursement of expensive innovative treatments with unfavorable cost-effectiveness ratios. This occurred in cases where the expected budgetary impact was too high or when the long-term effectiveness was questionable. Risk sharing agreements serve the interests of both the insurers and the drug manufacturers. Pharmaceutical companies' interests are to dispel the uncertainties encountered by the health insurers white deciding on drug reimbursement. The insurers are interested in these agreements in order to reduce the budgetary risk while allowing their patients access to innovative drugs. Currently, only a few risk sharing agreements have been implemented, and the scientific literature on such schemes is still sparse. Since the health insurers' interest is to develop mechanisms that will contain health costs, without affecting the insured, it appears that this trend will continue to emerge. It is also likely that the adoption of similar mechanisms in the Israeli National List of Health Services updating process, would improve the accuracy of early estimates of the budgetary impact, and the actual use of the new technologies would be close to early estimates. This article reviews the principles of risk-sharing schemes and issues involved in the actual implementation of such agreements.