P4P for drugs

So-called “risk-sharing” pricing schemes are being discussed to justify high drug prices:

Johnson & Johnson has proposed that Britain’s national health service pay for the cancer drug Velcade, but only for people who benefit from the medicine, which can cost $48,000 a patient. The company would refund any money spent on patients whose tumors do not shrink sufficiently after a trial treatment.

The groundbreaking proposal, along with less radical pricing experiments in this country and overseas, may signal the pharmaceutical industry’s willingness to edge toward a new pay-for-performance paradigm “” in which a drug’s price would be based on how well it worked, and might be adjusted up or down as new evidence came in.

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