Monday, April 28, 2008

Pharma: Pricing for Results and Effectiveness:

Interesting new pricing model for drugs are mentioned in this article.

The general idea being that some really expensive drugs are only being charged for if they deliver the desired result.
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Another regulatory boost may come from cost-benefit analysis that considers the long-term benefits, and not just the high price tags, of innovative new drugs. Britain's National Institute for Health and Clinical Excellence (NICE) has approved Herceptin, a targeted cancer drug, despite an annual cost per patient of nearly $50,000 because, in the words of Sir Michael Rawlins, NICE's chairman, “it provides long-term value”. NICE has also agreed to buy a cancer treatment made by Johnson & Johnson that has little effect on a third of patients, on the condition that it pay only when the drug works. And with an expensive Alzheimer's drug, the agency ruled that it would not pay for patients with the mildest form of dementia to take it—a ruling that was challenged in a London court this week.
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