Full or partial refund for non-responders In 2007, after NICE determined that Janssen-Cilag's myeloma drug Velcade (bortezomib) didn't meet cost-effectiveness criteria,
the company proposed a risk-sharing arrangement. The deal permits certain patients with progressive multiple myeloma to use
Velcade. After four cycles of therapy, response to treatment is measured using serum-M protein. If the protein is reduced
by at least 50 percent, NHS continues to fund treatment. If not, therapy is stopped, and Jannsen-Cilag refunds the cost of
the drug already administered.
Initial discounts with outcomes tracking In Italy, Bayer-Schering and Pfizer entered into an agreement that offered the country's health service a 50 percent discount
for their oncology drugs Nexavar and Sutent for the first two and three months of use, respectively. At the end of this initial
period, treatment continues only for patients who respond, and the discount ends. This initial discount program, with clinical
outcomes tracking, ensures drug use in the appropriate patient population where an effective pre-treatment biomarker is not
available. At the same time, programs such as this limit payers' financial burden during the treatment phase, when responders
are still being identified.
Capitation or initial discounts with outcomes tracking GSK's breast cancer therapy Tykerb, another NICE reject, didn't lend itself to a biomarker-based approach like Velcade. Given
the difficulty of linking the individual patient's response to the price of the drug, GSK instead proposed a "cost-cap" program,
offering to charge NHS a fixed annual price for Tykerb no matter how many patients use it. Despite being flexible in their
subsequent pricing structure by offering to bear the cost of Tykerb for the first 12 weeks of treatment—with NHS then only
paying for patients who continue to receive clinical benefit—Tykerb is still not recommended by NICE for routine use by women
with advanced breast cancer.
A COMPLEX TOOL: Risk-sharing agreements are one of the most difficult forms of contract for both manufacturer and payer.
There are many reasons why outcomes-based risk sharing has been slower to develop in the United States—not least among them
the fact that there is no single central health system to negotiate with. Until recently, most risk-sharing deals took the
form of money back guarantees used to gain first mover advantage and build market share. Examples include Proscar (Merck-Frost)
in 1994, Clozaril (Sandoz) in 1995, Zocor (Merck) in 1998, and Diovan (Novartis) and Cialis (Lilly/ICOS), both in 2004. Key
differences between these arrangements and those in Europe include that these were used for highly competitive therapeutic
classes, they were primarily targeted toward patients (e.g., copay refunds), and there was extensive experience with regard
to clinical efficacy of the products.
But there are signs that the US market is moving toward more sophisticated risk-sharing agreements. The past few months have
seen the announcement of several agreements that adapt the technique to the needs of a system dominated by private-sector
In April, Procter & Gamble and Sanofi-Aventis announced the launch of a pilot program with Health Alliance, a small Midwestern
insurer, covering the anti-osteoporosis drug Actonel. Under the arrangement, the manufacturers promise to reimburse Health
Alliance's average treatment costs for certain bone fractures suffered by women in the plan who have been taking Actonel correctly
for at least six months.
Just weeks later, Merck and the insurance company Cigna announced an innovative deal covering Merck's diabetes drugs Januvia
and Janumet. Where most performance-based arrangements pay the drug company more for a more effective drug, this deal took
the opposite approach, calculated to drive patient adherence and volume. Cigna will review A1C lab values for its patients
who take any oral anti-diabetic drugs, not just Merck's. If the A1C values improve over the course of a year, Cigna gets a
bigger discount on Januvia and Janumet. If claims data show that patients who have been prescribed Januvia or Janumet are
taking the drugs as prescribed, the discount increases. The deal suggests the shape that performance-based risk sharing may
take in this country—providing financial incentives to payers to treat patients better and focus on results.