Insurers warm to deals linking drug cost, efficacy

Business 101 says you should always get what you pay for. But according a new article in the Wall Street Journal, health insurers are trying to flip the equation, paying for what they—or, more precisely, their patients—get.

Cigna Corp. has reached value-based agreements with Praluent and Repatha, the only drug manufacturers who produce PCSK9 inhibitors to lower cholesterol. If the new medications do not help patients as much as expected, Cigna will receive extra price discounts from the drugmakers.

Such deals are a part of an industry trend toward emphasizing quality over quantity, but the impact on costs may be limited. For one, tracking and measuring patients’ health are difficult prospects.

“There is a general increase in interest in exploring these kinds of contracts, but a fair amount of caution as well, largely because the administrative aspects tend to be quite daunting in the short term,” said Steven Pearson, president of the Institute for Clinical and Economic Review.

For the full report, visit the WSJ link below: