Healthy Skepticism Library item: 15512

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Goldstein J.
Pay for Performance for Prescription Drugs (Or Maybe Not)
The Wall Street Journal Blog 2009 Apr 23
http://blogs.wsj.com/health/2009/04/23/pay-for-performance-for-prescription-drugs-or-maybe-not/

Full text:

Everybody’s been talking about paying doctors based on the quality of care they deliver, not the volume of procedures they perform (easier said than done, of course).

Now Merck and Cigna have announced what they’re calling a “performance-based contract” for Merck’s diabetes drug Januvia. But the deal is actually the reverse the pay-for-performance ideal: Merck will get paid less per pill, not more, if the drug works well.

Under the deal, Cigna will get a discount on the drug if patients’ blood sugar falls. Cigna will get additional discounts if patients faithfully take the drug when they’re supposed to. (These two variables often go together – taking the drug faithfully helps keep blood sugar down.)

So what this really sounds like is something closer to a volume discount. Patients who adhere to their drug regimen rather than sometimes skipping pills wind up buying more drugs. And when patients buy more drugs, Cigna gets a bigger discount. (The deal also applies to Merck’s Janumet, a pill that combines Januvia with the generic diabetes drug metformin.)

As this morning’s New York Times notes, there have been a few other recent, relevant deals. Sanofi-Aventis and Procter & Gamble, which co-market the osteoporosis drug Actonel, last week agreed to pay for treatment of some bone fractures in patients who take the drug.

And back in 2007, Johnson & Johnson made a deal in the U.K. that guaranteed rebates on its cancer drug Velcade when patients didn’t show enough improvement.