So here’s a nice antidote to all those stories about greedy pharma execs soaking patients for ultra-expensive treatments.
There’s a new approach to contrpay-acting between insurance companies and pharmaceutical companies making the rounds called “Pay for Performance.”
It works pretty much the way it’s advertised: Unlike traditional contracts, where insurance pays a set amount to a pharma company to cover their drug, Pay for Performance contracts pay out money based on how well the drug performs.
If that sounds a little revolutionary, it kind of is; and the insurers and benefits managers who negotiate drug prices across the country have their work cut out for them to get pharma on board. So when a major insurance company comes to a Pay for Performance agreement for one of the priciest drugs on the market, it’s a big deal.
And a big deal is exactly what Harvard Pilgrim Health Care has cut with Amgen.
Harvard Pilgrim, a regional plan that covers over a million people in New England, has agreed to offer coverage for Amgen’s cholesterol drug Repatha. Unlike mass-marketed cholesterol-lowering drugs like Crestor or Lipitor, Repatha is designed for a smaller group of patients who are either at higher risk for heart attacks or strokes, can’t tolerate statins, or suffer from the far more aggressive familial hypercholesterolemia (FH).
As one of only two options in a new class of drugs—called PCSK9 inhibitors—Repatha weighs in at a hefty $14,100 for a year’s supply. As part of the agreement to cover the drug, Harvard Pilgrim negotiated both a discount and possible rebates if Repatha doesn’t perform as expected.
While Harvard Pilgrim and Amgen offer very different takes on whether the cost of Repatha makes it worthwhile, executives with both companies are onboard with the “value-based” pricing approach.
If successful, this unique deal could provide a roadmap for other insurance and pharma companies locking horns over expensive drugs designed for small populations. And for those small populations—like people living with FH—it could provide some assurance that someone is looking out for both their physical and financial health.
