Pharma Rx Costs Tied To Outcomes

Given our opinion that the PBM industry would be moving to more outcome based pricing, the articles today about Merck and Cigna‘s deal on pricing based on outcomes is very timely.  I “tweeted” about it early in the AM, but I have got the article sent to me by a lot of people.  So, here are a few of the things being said:

WSJ Blog

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.)

Cigna PR

“Merck should be recognized as the first major pharmaceutical company to offer increased discounts on its oral anti-diabetic products, supporting CIGNA’s efforts to reduce A1C levels for individuals with diabetes, regardless of what medication they may be taking,” said Eric Elliott, president of CIGNA Pharmacy Management. “Improving people’s health comes first for both CIGNA and Merck. We hope this agreement will become a model in the industry.”

So…it seems like an aligned deal.  Merck and Cigna want adherence.  Employers want lower costs and better outcomes.

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