News Headlines Article

Medicare To Experiment With Tying Drug Costs to Effectiveness
National Public Radio

Aetna and Cigna inked deals last month with drug maker Novartis that offer the insurers rebates tied to how well a pricey new heart failure drug works to cut hospitalizations and deaths. If the $4,500-a-year drug meets targets, the rebate goes down. Doesn’t work so well? The insurers get a bigger payment.

In another approach, pharmacy benefit firm Express Scripts this year began paying drug makers a special negotiated rate for some cancer drugs. The goal is to reward the use of medicines that are most effective for certain cancers.

Dubbed “value-based pricing,” these are the kind of private-sector efforts the Obama administration hopes to borrow to rein in drug prices for Medicare.