7 February 2017 - Value-based pricing is ‘buzzword of the day:’ Allergan CEO.

President Donald Trump says drug prices are astronomical and something needs to be done. Pharmaceutical giants have an answer that doesn’t involve lowering list prices: refunding some of the money to insurers if a drug doesn’t work as expected.

The concept of pay-for-performance isn’t new in the industry. But the number of such agreements between drugmakers and insurers has grown in the past year as Big Pharma seeks to defuse criticism over the soaring prices of some brand drugs, which can cost $10,000 a month or more for cancer treatments.

“The new government in the U.S. with Trump talks about getting more value for less,” said Lars Fruergaard Jorgensen, chief executive officer of Novo Nordisk A/S, the world’s biggest maker of diabetes medicines. “Outcomes-based contracting could be one of the elements.”

Read Bloomberg article