Drugmakers have held out plenty of different carrots to induce the U.K.'s cost-effectiveness watchdog to accept expensive meds for use on the National Health Service. Companies have offered paybacks if their products don't work. They've agreed to foot the bill for prolonged treatment, if it proves necessary. They've discounted treatments umpteen different ways.
The latest offer--from GlaxoSmithKline ($GSK) for its new cancer drug Votrient--has to be one of a kind. The company will discount the price of Votrient by 12.5 percent, to make it competitive price-wise with its direct rival, Pfizer's ($PFE) Sutent. So far, so common. But here's the kicker: it's agreeing to pay a guaranteed rebate if an ongoing clinical trial shows that its direct rival, Pfizer's Sutent, works better.
When the head-to-head trial results are released in mid-2012, paybacks may come due. "If we fail to confirm that they are comparable in efficacy--which we do not expect--then we provide a rebate back to the NHS as a result," GSK's head of British operations, Simon Jose, told Reuters.
Reuters points out that this arrangement may be a clue to the sorts of deals the U.K.'s new value-based pricing approach. "We are moving in the direction where price is driven by value and value is driven by evidence," Jose told the news service, "and therefore we can start to construct different sorts of arrangements where we can balance this off."
- read the Reuters news