Meet the Pharma Companies That Only Charge Insurers for Meds That Work

It prevents the price tag from creating a barrier to treatment

Pricey pills create a barrier to help
Pricey pills create a barrier to help. (Getty)
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Biotech firms like Bluebird Bio are trying to soften the blow of ridiculously high drug prices by allowing insurers to only cover their products if they actually work to help improve a patient’s life.

The Boston-based firm is currently working on developing a cure for the blood disorder thalassemia, and announced in January that it would divvy up the shocking sticker price of $2.1 million for its upcoming drug into five installment payments — the first of which is covered by a patient’s insurance, which can then decide if it’s working and should still be covered.

This method is known as a value-based agreement, The Atlantic reported, and it’s quite different from traditional methods of healthcare in America. The thought process comes from the moral dilemma presented by extremely expensive or experimental drugs. If not covered by insurance, these treatments tend to be exclusively available to the rich, leaving less fortunate patients without access to their potentially life-changing benefits (medications that can help people regain the ability to walk or see, for example).

Another company breaking from the pack of traditional payment methods is the Philadelphia-based Spark Therapeutics, which offered a partial refund last year if its gene therapy for blindness — priced at $850,000 per patient — stopped improving a patient’s vision.

“It’s a way to prevent the price tag from being a barrier,” says Michael Sherman, the chief medical officer of the Massachusetts-based insurer Harvard Pilgrim Health Care, who’s negotiated more than 15 such contracts over the past three years.

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