In a pay-for-performance model, pharmaceutical companies are increasingly offering to refund for medication that doesn’t produce desired medical results.
Pharmaceutical companies are increasingly proposing a “satisfaction guaranteed or your money back” scenario. Johnson and Johnson has recently offered a money-back guarantee for its cancer drug, Velcade®, in the case where it may not live up to its promise to cure. Britain’s national health service would pay for the medicine, which costs approximately $48 000 per patient, but only if the drug treatment shrinks tumors sufficiently, as it is designed to do. If there is no noticeable improvement in a patient’s condition, the pharmaceutical company proposes to refund the money spent on treatment.
Other examples of this new trend are GlaxoSmithKline, a company which has agreements with two European governments, as well as four makers of multiple sclerosis drugs who have agreed to lower their prices if their product does not meet expectations.
In a medical system where pharmaceutical companies already hold enormous influence, this innovation might make manufacturers more responsible for the way in which their product is used. Such a model seems workable only in countries, such as Britain, where the government covers the majority of medical costs. However, American medical insurance companies are already testing the waters. They are carrying out experiments in having pharmaceutical companies foot the bill in drug studies which show that the medication is not producing its intended impact and to pay for the medical expenses in cases where patients continue to suffer despite treatment.
This move towards a pay-for-performance model by the pharmaceutical industry has huge repercussions for health-care systems around the world. Can such a model really work? Is it feasible to measure the performance of a drug the same way a consumer can measure a car’s performance? How do you measure health exactly, especially in dollars and cents? And exactly how much must a tumor shrink for a medication to be considered cost-effective? These are all questions, doctors, policy makers and medical business people are asking.
This article was published Wednesday, July 18, 2007.
