Current Events P4P Pharmaceuticals

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With increasing pressure on the price of health care services, a number of firms are seeking innovative pricing strategies.  Stat reports:

Stryker, a medical device company, developed its SurgiCount system to accurately track these sponges. This March, it announced it is backing the product with a $5 million guarantee. If the system is used as designed and a surgeon leaves a sponge behind, Stryker will pay up to $5 million in legal costs associated with rectifying the problem. The company will also reimburse the hospital the difference in price between what it paid for SurgiCount and what it would have paid for generic sponges.

It’s not only device makers but pharmaceutical firms as well.

Cigna has announced signing contracts for two new cholesterol-lowering drugs that would reduce the price paid if real-world outcomes don’t match the results of clinical trials. Cigna will be given access to patients’ cholesterol levels and be able to tell how well the new drugs are working.

Is pay-for-performance becoming a reality in the life sciences industry?   There are a number of clear barriers, but innovative pricing arrangements are gaining a foothold.

1 Comment

  1. I believe this might be a bad deal for CIGNA and others that employ a similar strategy. The issue is not whether these drugs significantly lower cholesterol. The issue is whether they reduce mortality and major cardiac events in a cost-effective manner. At list prices, they don’t. They should be focusing on limiting the use of these agents to a very select group of patients, not opening it up to wider use. They may be doing that as well, I just haven’t seen that part of their policy.

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