Pay-for-Performance Model Being Applied To Drug Makers In Europe, U.S.

Will this increase sales and allow some drugs in to the market place, and how will this be monitored? Jury might be out on this one for a while as it appears it might be a bit complicated to fully map out a program as such...how would it be determined that the drug was ineffective and heart attacks for a simple example were not brought about by some other condition or a new condition and perhaps not related? Just one question that came to mind here...BD

Prescription drug makers are creating pay-for-performance contracts with European state-run health care systems in an effort to "overcome" the systems' "increasing stinginess about paying for new drugs," the Wall Street Journal reports.

Cigna and Aetna are pursuing pay-for-performance programs with drug makers. Thom Stambaugh, chief pharmacy officer for Cigna, said the company has been asking cholesterol drug manufacturers to reimburse the insurer if a patient taking the drugs correctly still has a heart attack. No drug maker has agreed to such a proposal

According to the Journal, a rapid increase in drug prices over the past decade has increased the demand on drug companies to be held accountable for the claims they make. In Europe, some government-run health systems have established strict criteria for including drugs on their formularies, including reviews of cost effectiveness. If a health system decides not to pay for a treatment, the drug can effectively be locked out of the market. The Journal reports, "That frugality has led to flat or declining sales in Europe for many drug companies." Drug companies are offering such pay-for-performance deals rather than lowering drug prices "in part because they are fearful of setting precedents that would cause insurance payers worldwide to demand price cuts," according to the Journal