Novartis, Roche Find "Outcome-based" Drug Pricing An Elusive Dream

Novartis, Roche find "outcome-based" drug pricing an elusive dream
Novartis and Roche CEOs find the United States is not ready for outcomes-based pricing, whether based on health outcomes or reducing total medical costs. Among the major obstacles are varying electronic medical record platforms and their inability to track patient adherence or a drug's impact on health outcomes. Further, many physicians are apprehensive towards such arrangements given the increased administrative burden likely required of them in order for the model to be successful. Linking reimbursement to outcomes is an attractive concept for various healthcare stakeholders as it improves quality while reducing costs. Pharmaceutical manufacturers are particularly interested in such arrangements, however, as they could potentially yield greater revenue as performance goals are met. The key issue is that performance based pricing is necessary for efficient development of cost-reducing innovations in health care. Why? Because without such pricing innovators cannot be rewarded for the cost reductions they generate.