Insurer payments for medications dependent on efficacy

In another example of how payers are pushing for better value, STAT reported that Harvard Pilgrim and two pharmaceutical companies have agreed that total payments for certain medications should depend on the efficacy of the medications. Harvard Pilgrim, an insurer, will expect discounts or rebates if medications do not outperform competitive options. In theory, both sides could be happy: Harvard Pilgrim would be paying for results, not just volume, while pharmaceutical companies might get reimbursed more if their products really perform better than alternatives.

Getting an accurate measure of drug effectiveness is likely going to be difficult. I would guess that Harvard Pilgrim will be primarily reviewing claims data, which has its limitations. For one, if a drug causes certain side effects, it may be difficult to recognize them. Nevertheless, this is an encouraging step towards measuring and paying for effectiveness within the realm of medicine.