Agencies Send Mixed Signals on New, Innovative Drug Payment Arrangements


The approval of a breakthrough cancer drug along with the government’s announcement of a payment arrangement based on actual patient results may be a sign of more to come.

However, a pharmaceutical industry group representative told me that current laws and regulations may impede moves to more flexible ways of paying for drugs.

The Food and Drug Administration recently approved Novartis AG’s Kymriah for treating certain pediatric and young adult leukemia patients. The drug has a list price of $475,000. At the same time, the federal government said the drugmaker will get paid only if patients respond to the treatment, while indicating it’s open to additional alternative payment arrangements for life-saving drugs.

The approval of the drug and the outcomes-based payment arrangement come as government payers such as Medicaid consider ways to cover innovative but costly treatments.

However, Holly Campbell, deputy vice president of public affairs at Pharmaceutical Research and Manufacturers of America (PhRMA), told me certain regulations are holding back innovative payment arrangements.

She said to spur more “value-based arrangements, policy makers need to modify outdated laws and regulations that may limit the ability of private companies to negotiate innovative and flexible ways to pay for medicines that could lower out-of-pocket costs and enable patients to access the right treatments the first time.”

Read my full article here.

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