Money-Back Guarantees: Where Private Payers Might Not Wait for CMS To Lead.
Year: 2007
Type: article
Abstract: When Robert Seidman was chief pharmacy officer at Wellpoint, he sometimes presented drug manufacturers with a proposition. If they wanted Wellpoint to cover a brand-name medication at a relatively high cost compared to a generic therapy, shouldn’t they be willing to guarantee that it worked?
But manufacturers had their own blunt questions: Could Wellpoint guarantee that all of their patients were taking the drug correctly and that all of their doctors were prescribing it properly?
“Neither side was sophisticated enough at that time nor willing to abandon standard rebate contracting terms to take that leap,” says Seidman today. “The dialogue on guaranteeing the value of billions of dollars in drug expenditures is long overdue and essential to protecting healthcare affordability and value.”
That gap, though, might just be coming to a close.
A few weeks ago, payers in the United States leapt to attention when the United Kingdom’s health watchdog, the National Institute for Health and Clinical Excellence, fielded an offer from Johnson & Johnson it couldn’t refuse. Faced with British regulators’ refusal to cover the costly cancer drug bortezomib (Velcade), J&J agreed to provide it with a money-back offer — if patients have either no response or only a minimal response to the drug, the drug giant would return the money that had been paid for it.
“We know from talking with payers, which we do all the time in our research, that they are very aware of that decision; I’ve already heard that there are some discussions with payers in the United States ready to do something similar,” says Jonothan Tierce, practice leader for health economics and outcomes research for IMS Health in Falls Church, Va.
“We are very interested to see how this plays out,” echoes Steve Miller, MD, chief medical officer for the giant pharmacy benefit manager Express Scripts. “What we and others are doing is deciding whether this is going to have a relevant place for benefit design in 2009. This is a very interesting concept, and we also believe that it completely aligns with the direction we’re developing with individualized health care.”
Some observers of the U.S. drug scene say it would be a lot easier —and be adopted much faster — if the Centers for Medicare and Medicaid Services would step in and strike one of the first of these deals. But the federal government, they add, is unlikely to be the first mover. This is an area where private payers may push through an innovation that regulators will adopt only later.
Source: PubMed Central
Author: John Carroll
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W285386308